MNI China Press Digest Nov 11: Credit, RRR Cut, Zero-Covid

The following lists highlights from Chinese press reports on Friday:

• The sharp falls in China’s October credit and aggregate finance data indicate weak financing demand and that counter-cyclical policies need to be strengthened to promote credit expansion in infrastructure, manufacturing and real estate, Yicai.com reported citing analysts. Aggregate Finance grew CNY907.9 billion in October, CNY709.7 billion yuan less than the same period last year, mainly dragged down by sluggish new yuan loans and government bond financing, Yicai said. The credit easing process has slowed down amid repeated disruptions of production and consumption by Covid outbreaks, while slowing inflation should open up policy space for stabilising growth, the newspaper said analysts.
• The People’s Bank of China may consider a small reserve requirement ratio cut by the end of this year when a large amount of medium-term lending facility matures and drains liquidity, China Securities Journal reported citing analysts. There are CNY1 trillion and CNY500 billion of MLFs maturing in November and December, respectively, the newspaper said. Analysts believe the inflation peak has passed and CPI will continue to be within the price control target of 3% in Q4, which provides monetary easing space, the newspaper said. With overseas interest rate hikes slowing, it is expected the PBOC would launch RRR and interest rate cuts accordingly to expand credit and lower financing costs, the newspaper said citing analysts.
• China should focus on fighting the epidemic in key areas by taking more resolute and decisive measures to quickly curb any spread and restore order as soon as possible, while also using more precise controls, Xinhua News Agency reported, citing the meeting of the Politburo Standing Committee on Thursday. China faces a severe situation as the outbreak could expand in winter and spring, making it necessary to unswervingly implement the general policy of dynamic “zero-Covid”, the meeting said.