MNI China Press Digest June 29: GDP, Travel Restriction, Banks

The following lists highlights from Chinese press reports on Wednesday:

• The Chinese economy may grow around 4.8% in 2022, and could reach 5%-5.5% if supported by strong policies such as the issuance of special treasury bonds in H2, Yicai.com reported citing a report by Zhixin Investment Research Institute. If issuing CNY1.5 trillion special treasury bonds, the infrastructure investment growth in 2022 could increase by 24.8%, otherwise the figure may rise by 13.7%, the report said. The central bank is expected to cut the reserve requirement ratio in H2 to ease banks’ pressure on capital costs, the report said.
• China reduced the length of mandatory quarantine for inbound travelers to seven days plus three more days of health monitoring at home, from the previous 14 days quarantine plus seven days home monitoring, the 21st Century Business Herald reported citing the latest Covid-19 prevention and control policy guidelines released on Tuesday. The relaxation is made to accommodate the shortened incubation period for the Omicron variant, mostly 2-4 days, the newspaper said citing Lu Hongzhou, president of Shenzhen Third People's Hospital. The new guidelines have added requirements to "control the epidemic to the smallest scope in the shortest time, with the lowest cost”, emphasizing targeted measures, the newspaper said.
• Many banks in China including China Construction Bank, and China Merchants Bank see time deposit interest rates inverted and yields on large-denomination certificates of deposit continue to decline, Yicai.com reported. Banks are facing pressure on the net interest margin brought about by lower loan interest rates, coupled with sufficient liquidity and the lack of effective credit demand, their motivation to absorb deposits, especially medium- and long-term high-cost deposits, has been greatly weakened, the newspaper said citing analysts. Such pressure may ease in H2 as banks further balance the cost of their asset side and liability side, with recovering credit demand, the newspaper said citing analysts.