MNI China Press Digest May 29: Yuan, Housing, Consumption

Highlights from Chinese press reports on Wednesday:

• China’s foreign exchange policy should carry out decisive intervention to break the negative spiral when the yuan shows a unilateral trend and make the fluctuations show a convergence characteristic, Yicai.com reported citing Ding Zhijie, director of the Foreign Exchange Research Center of the State Administration of Foreign Exchange. The yuan has fluctuated in the range of 7.1-7.3 against the U.S. dollar recently, with the central parity rate deviating from the prediction model to send signals of stability, said Yicai, adding that the market expects the yuan will maintain range fluctuations in future.
• Guangzhou and Shenzhen become the latest first-tier cities in China to lower the minimum down-payment ratio and interest-rate floor for housing mortgages on Tuesday following Shanghai’s relaxation, Cls.cn reported. Beijing, the only tier-one city left, is expected to follow by cutting the down-payment for first-time buyers to 20%, similarly to Shanghai and Shenzhen, the financial publisher said citing an unnamed industry insider. While Guangzhou and other cities will likely adopt the nationwide lower limit of 15% down-payment, said Yan Yuejin, director at the E-house China Research and Development Institution.
• Beijing and Shanghai are seeing more restaurant openings and closures, with diners launching low-cost group deals, according to 21st Century Business Herald. From January to April, Beijing's eat-out revenue was CNY42.2 billion, down 2.3% y/y, while Shanghai’s hotel and dining consumption reached CNY49 billion, down 2.5% y/y. In contrast, second-tier city dining revenue grew above 15% y/y. David An, founder of an equipment firm, said he was mainly reclaiming assets from mid-to-high-end restaurants located outside Beijing's third ring road, with an average spending of over CNY500 per customer. In Q1 2024, KFC's per customer transactions nationwide were CNY42, with Pizza Hut at CNY90, both in decline, the Herald noted.