MNI China Press Digest, May 21: Special CGBs, Rate Cut, Wuhan

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

on Thursday:

     Special Chinese Government Bonds (CGBs) should be used largely for

investment in specific projects with certain income which would also help drive

the post-epidemic recovery, the 21st Century Business Herald reported. Citing

Feng Qiaobin, deputy director of macroeconomic research at the Development

Research Centre of the State Council, the Herald's report said that because CGBs

are not included in the deficit, they are required to link to corresponding

assets. An increase in the deficit-to-GDP ratio should be used to increase

payment transfers to local governments, subsidize consumption and stabilise

employment, Feng said. 

     The People's Bank of China could accelerate the pace of interest rate cuts

in June beginning with a 10 to 20 bps cut to the medium-term lending facility,

the Economic Information Daily reported. Citing Wang Qing, chief analyst at the

credit-rating agency Dongfang Jincheng, the Daily's report also said the Loan

Prime Rate, which was kept unchanged this month, may be driven down by up to 20

bps after any MLF rate cut. Any cut to the 5-year LPR, which links to mortgage

rates, would be less than 10 bps as the government aims to crack down on housing

speculation, Wang said. 

     Wuhan city, the epicentre of the coronavirus epidemic, will ensure the

completion of CNY45.4 billion in transportation investment in 2020, the Economic

Information Daily reported citing Wuhan's Municipal Transportation Bureau. This

compares to CNY80.6 billion of investment in transportation in 2019, the

newspaper said. 

--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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