MNI China Press Digest, March 18: Infrastructure, Home, Fiscal

     BEIJING (MNI) - The following lists highlights from Chinese press reports

on Wednesday:

     Local governments should accelerate work on 11,000 key construction

projects by offering support in labour, raw materials, funding and virus

prevention equipment, according to a statement issued by the State Council

executive. The statement, posted on the government website, said local

authorities should accelerate the issuance and use of infrastructure-backed

special bonds and prepare for more than 4,000 initial key projects planned this

year while increasing the pipeline of follow-up projects. Green channels for

major project approval should be established and construction of approved

projects should begin as soon as possible, the statement said. 

     China's banking sector has not changed its hawkish stance toward the real

estate sector even though some local banks and administrations have lowered down

payment ratios and interest rates on home loans, according to Securities Times.

Citing Xiao Yuanqi, the spokesman for the China Banking and Insurance Regulatory

Commission, the newspaper reported that those adjustments are still in line with

the general regulations of the central government. Xiao said bank profits in

China will increase at the same rate as last year despite the negative impact of

the epidemic. The non-performing loans (NPL) ratio increased 5 bps in February

and will continue to rise over the following months, but this will be

controllable as the system has CNY6 trillion in provisions covering NPL's of

CNY3 trillion, Xiao said. 

     It is not appropriate for China to excessively expand the issuance of local

government special bonds to boost infrastructure investment as this could

crowd-out private investment, according to a report in the 21st Century Business

Herald. Citing Liu Shangxi, the director of the Chinese Academy of Fiscal

Sciences, the Herald's report said tax and fee cuts in 2020 can be borne by the

central government through expanding the deficit to ease the fiscal burdens of

local government. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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