MNI China Press Digest March 10: CPI, Regulation, Bank Risks

Highlights from Chinese press reports on Friday:

• February's 1.0% y/y increase in the Consumer Price Index should be the lowest result this year, as the economy recovers and prices of housing and services increase, according to the Securities Daily. The low figure was mainly due to the Spring Festival falling in January and depressed prices for pork. The paper said CPI is likely to rise to around 2% in coming months as consumer demand returns and pork prices stabilise, according to the paper. Despite the low increase, deflation is unlikely and the current price level will not hamper macro policy or the expansion of domestic demand and the promotion of consumption.
• Beijing’s plans to establish a new National Data Bureau to oversee regulation on data collection and sharing will lead to enhanced public services, more digitalisation, and speed up construction of smart cities, according to Xinhua. Quoting experts, the paper said digitalisation was significant to China's development and the new structure would help Beijing develop a competitive advantage. The reforms, announced during this weeks National People's Congress, will see the new body integrate functions of various departments, which will help coordinate the development of the digital economy, according to the paper.
• Small and medium sized banks in China are facing pressure to ensure asset quality and control risks, according to a financial expert interviewed by Shanghai Securities News on the sidelines of the National People’s Congress. To improve the situation, the delegate said market-based approaches to clearing and asset restructuring should be allowed. The disposal of non-performing assets should be accelerated, and banks should focus on actual market demand and serve the real economy.