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MNI China Press Digest June 1: High Debt, A Shares, Shanghai

MNI (Singapore)

MNI picks key stories from today's China press.

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The following lists highlights from Chinese press reports on Wednesday:

  • China should maintain rapid economic growth to absorb its growing debt, and avoid a quick rise in domestic interest rates to keep the current high level of debt sustainable and avoid systemic financial risks, wrote Zhang Ming, senior fellow of the Institute of Finance and Banking at the Chinese Academy of Social Sciences in a blog post. China’s macro leverage ratio, meaning overall debt-to-GDP ratio could be as high as 303.8% by end-2021 if local government implicit debts and debts raised by their financing vehicles are included, said Zhang. At present, local governments bear the highest default risk and their debt-to-GDP ratio is as high as 106.6%, said Zhang.
  • The A share market is expected to continue an upward trend into June, supported by intensive pro-growth policies, the resumption of work and production from Covid-19 lockdowns and ample liquidity, the China Securities Journal reported citing analysts. The A share market showed resilience in May even in the event of tumbling U.S. stocks overnight, with the Shanghai Composite Index rising 4.57% last month, the newspaper said. The net inflow of foreign capital to A shares was CNY16.87 billion in May, the largest monthly inflow this year, the Journal said.
  • Shanghai has eliminated anti-epidemic checkpoints at bridges, tunnels and other points from June 1, and removed roadblocks to restore normal production and daily life after a two-month Covid-19 lockdown, CCTV News reported. Shanghai added five local Covid-19 cases and ten infections with no symptoms on Tuesday, according to the Shanghai Municipal Health Commission.
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The following lists highlights from Chinese press reports on Wednesday:

  • China should maintain rapid economic growth to absorb its growing debt, and avoid a quick rise in domestic interest rates to keep the current high level of debt sustainable and avoid systemic financial risks, wrote Zhang Ming, senior fellow of the Institute of Finance and Banking at the Chinese Academy of Social Sciences in a blog post. China’s macro leverage ratio, meaning overall debt-to-GDP ratio could be as high as 303.8% by end-2021 if local government implicit debts and debts raised by their financing vehicles are included, said Zhang. At present, local governments bear the highest default risk and their debt-to-GDP ratio is as high as 106.6%, said Zhang.
  • The A share market is expected to continue an upward trend into June, supported by intensive pro-growth policies, the resumption of work and production from Covid-19 lockdowns and ample liquidity, the China Securities Journal reported citing analysts. The A share market showed resilience in May even in the event of tumbling U.S. stocks overnight, with the Shanghai Composite Index rising 4.57% last month, the newspaper said. The net inflow of foreign capital to A shares was CNY16.87 billion in May, the largest monthly inflow this year, the Journal said.
  • Shanghai has eliminated anti-epidemic checkpoints at bridges, tunnels and other points from June 1, and removed roadblocks to restore normal production and daily life after a two-month Covid-19 lockdown, CCTV News reported. Shanghai added five local Covid-19 cases and ten infections with no symptoms on Tuesday, according to the Shanghai Municipal Health Commission.