MNI China Press Digest June 14: NDRC, MLF Cut, Market Reforms

Highlights from Chinese press reports on Friday:

• China will expand support for 200 vocational colleges and allow financial and industrial firms the right to invest in the sector, according to the National Development and Reform Commission. Speaking at a recent press conference, NDRC Director Liu Ming said the Government planned to strengthen the integration between education and industry by boosting funding and financing channels for vocational schools. Education policymakers will prioritise vocational training needed in advanced manufacturing, new energy, new materials, biotechnology, artificial-intelligence sectors and focus on areas with labor shortages, such as nursing, healthcare, childcare, and housekeeping.
• Authorities will likely cut the Medium Loan Facility (MLF) this month following the drop in the open market bidding rate by 10bp from 2% to 1.9% on Tuesday, according to analysts interviewed by China Securities Daily. Dong Qi, a macro analyst at Guotai Junan said the PBOC rate cuts would boost business confidence and lower risks from bad local government debt. Lu Ting, chief economist at Nomura China, said policymakers have historically lowered the MLF interest rate after reducing the open market rate. However, authorities should take wider support-based measures in addition to rate cuts in H2, Lu said.
• Authorities in Beijing should take measures to deepen reform and open up in addition to cutting interest rates this month to secure the recovery, according to an editorial from Yicai. The paper said policymakers' moves to cut interest rates this week risk causing higher debts if deeper market reforms are not taken. China should unleash a second round of sustainable economic growth by increasing market access to the private sector, breaking up monopolies, improving the rule of law and constructing a national unified market, Yicai said.