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MNI China Press Digest May 6: Rate Cut, Infrastructure, Covid

MNI (Singapore)

The following lists highlights from Chinese press reports on Friday:

The People’s Bank of China is still likely to cut medium-term lending facility rates by 10 bps in Q2, and lower the deposit reserve ratio by 0.5 bps to promote credit expansion, particularly if the pace of Fed rate hikes slows, the Economic Information Daily reported citing analysts. The intensity of aggregate monetary policy will be close to the level of H1 2020, while targeted tools will play a bigger role, the newspaper said. The central bank is also expected to increase the re-lending quota for transportation and logistics, agriculture and manufacturing and small businesses, the newspaper said citing Cheng Shi, chief economist of ICBC International.

China is likely to boost infrastructure investment, which is expected to grow as much as 10% for the year, following a call by top policymakers for an all-in effort, the China Securities Journal reported citing analysts. Tech-based infrastructure, likely to grow 11.54% y/y to total CNY1.74 trillion in 2022 will be a main driver for economic growth, adding 0.16-0.53 percentage points, the newspaper said citing analysts from China Industrial Secs. To maintain a relatively high infrastructure investment growth rate, medium and long-term financing needs to be expanded, the newspaper said, citing analysts. Infrastructure investment grew 8.5% in Q1.

China will adhere to the dynamic zero-Covid efforts and fight any attempts to distort, question or dismiss the policy, Xinhua News Agency reported, citing a meeting of the Standing Committee of the Political Bureau chaired by President Xi Jinping on Thursday. China will accelerate the pace of control work to deal with sporadic outbreaks, aiming to identify infected persons in a timely manner by increasing coordination on testing, epidemiological investigation, quarantine and community management, the meeting said. Epidemic control is in a critical period and there is no room for relaxation. China will win the anti-Covid war in Shanghai, the meeting said.

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