MNI China Press Digest July 8: Q2 GDP, FX Reserves, Housing

Highlights from Chinese press reports on Monday:

• China’s economy will grow 5.1% in Q2, according to chief economists' expectations, with industrial added value increasing more than retail sales, Securities Daily reports. In H2, policymakers should prioritise boosting consumption, stabilising housing prices and reducing inventory, said Zhang Jun, chief economist of China Galaxy Securities. Mingming from CITIC Securities, said expanding effective investment under large-scale equipment renewal schemes should be the focus, while Dong Zhongyun from AVIC Securities, said domestic demand will be supported by additional government bond issuance later this year.
• China’s foreign exchange reserves stood at USD3.2224 trillion at the end of June, down 0.3% m/m, but marking seven consecutive months above USD3.2 trillion, Beijing Business Today reported citing State Administration of Foreign Exchange data. FX reserves are expected to remain high as exports maintain medium-to-high growth, while developed economies gradually shift to cutting rates which will restrict U.S. dollar upside strength, the newspaper said citing analysts.
• Tier-one property market transactions increased in June as Q2 stimulus policies took effect, Securities Times reported. New home sales per square meter rose 21%, 66%, 48% and 38% m/m in Beijing, Shanghai, Guangzhou and Shenzhen, hitting a yearly high point, while second-hand markets rose to 15, 36, 14 and 40 month highs respectively. However, higher transaction volumes were based on lower home prices, and the stimulus sustainability remains in doubt especially during the July and August off-season, the newspaper said citing analysts.