MNI China Press Digest May 5: Pro-growth, Higher CPI, Housing

The following lists highlights from Chinese press reports on Friday:

• China should increase policy intensity to stabilise economic growth, such as new re-lending tools, consumption stimulus, and subsidies for low- and middle-income groups affected by the pandemic, Yicai.com reported citing analysts. China can issue special treasury bonds, which can help to fund infrastructure projects as well as subsidise lower-income groups and smaller businesses with rent, labor costs and interest payments, the newspaper said citing Luo Zhiheng, chief economist of Yuekai Securities. The Politburo meeting in end-April called for new incremental policy tools as well as the accelerated implementation of pro-growth policies announced earlier, the newspaper said.
• China’s consumer price index will rebound above 2% with sharp price hikes in fruit, vegetables and eggs as logistics are constrained amid Covid lockdowns, the Economic Information Daily reported citing analysts. Domestic fuel costs have followed the declines in international oil prices as the Russia-Ukraine conflict has been basically priced in the market, the newspaper said. CPI will rise moderately in the following months as costs for goods remains high due to low upstream inventory and the tension in the supply chain, the newspaper cited analysts as saying. CPI rose 1.5% y/y in March.
• Smaller cities in China will accelerate policies to stimulate housing demand, including removal of home purchase limits, easier loan rules and lower down payment ratios for second homes, the Securities Times reported citing Ding Zuyu, head of Shanghai E-House Real Estate Research Institute. Key big cities may moderately unbundle control policies but it is hard to give up their home purchase limits, the newspaper cited Ding as saying. Several second-tier cities including Wuxi and Xuzhou, have relaxed real estate market policies during the May Day holiday following a Politburo meeting in end-April that set the tone, the newspaper said.