July 29, 2024 01:20 GMT
MNI China Press Digest July 29: RRR, Profits, SME Innovation
BEIJING (MNI)
MNI picks keys stories from today's China press
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Highlights from Chinese press reports on Monday:
- The People’s Bank of China will likely cut the reserve requirement ratio (RRR) by 25-50 basis points in H2 to meet demand for CNY4.7 trillion of maturing medium-term lending facilities over the next five months, Securities Daily reported citing analysts. Additionally, government bond issuance will reach CNY1.81 trillion during August and September, according to Galaxy Securities' calculations. Officials need to cut the RRR to fill the base money gap and improve commercial-bank liquidity, the newspaper said, citing analysts.
- China’s industrial profits are expected to maintain growth in H2, supported by equipment renewals and consumer goods trade-ins, strong special treasury bond issuance and financial support for manufacturing, according to Zhou Maohua, macro researcher at Everbright Bank. Chinese firms’ industrial profits increased 3.6% in June y/y, 2.9 percentage points faster than May, recent government data showed. However, firms faced downside risks including extreme weather, an unbalanced economic recovery and uncertainty over external demand, Zhou added. (Source: 21st Century Business Herald
- The National Financing Guarantee Fund has increased the risk-sharing ratio for loans to innovative SMEs to 40% from 20%, according to a government announcement. The measure will allow banks and local governments to increase financial support and resources towards SME investment in technological innovation, the announcement said. Authorities can unlock the potential of SMEs to drive competition and innovation in the economy by increasing the risk-sharing ratio, said Song Xiangqing, vice president at the China Society of Business Economics.
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