MNI China Press Digest June 6: Tourism, New Loans, Cash Flows

The following lists highlights from Chinese press reports on Monday:

• Domestic tourism accelerated in China during the three-day Dragon Boat Festival last week though still down on year, with Shanghai and Beijing returning to Top 10 traveling destinations as Covid-19 curbs ease, the China Securities Journal reported. Revenue from domestic tourism was CNY25.82 billion during the holiday, falling 12.2% y/y and recovering to 65.6% of the pre-pandemic level, the newspaper said citing data by the Ministry of Culture and Tourism. A total of 79.61 million trips were made across the country, a decrease of 10.7% y/y and 86.7% of the same period in 2019, the newspaper said.
• New yuan loans likely rebounded sharply in May to as much as around CNY1.5 trillion from April’s over four-year low of CNY645.4 billion, as top regulators repeatedly called for credit growth to support the economy, the Securities Daily reported citing analysts. Bill financing and short-term corporate loans may still be the main support, while medium and long-term corporate loans are expected to improve slightly, the newspaper said citing Tan Yiming, chief fixed-income analyst at Minsheng Securities. Personal loans may remain sluggish amid weakened incomes and low appetite for spending on home purchases, Tan was cited as saying.
• China should plan and introduce more extraordinary incremental policies to help small businesses and people affected by the epidemic to improve their cash flow, wrote Guan Tao, chief economist at BOC Securities in a blog post. Currently, the market is reluctant to borrow, and banks are afraid to lend due to weaker cash flows at companies and for individuals entering the third year of Covid-19 outbreaks, said Guan. If the private sector continues to add leverage, it could erode their financial health and will take a long time for companies and individuals to repair their balance sheets in the future, which will drag down the pace of economic recovery, said Guan.