MNI China Press Digest Nov 18: RRR Cut, Inflation, Property

The following lists highlights from Chinese press reports on Friday:

• The People’s Bank of China is less likely to cut reserve requirement ratios or interest rates by the end of the year, as it watches for signs of rising inflation as flagged in its Q3 Monetary Policy Report, Securities Daily reported citing Wang Qing, chief analyst of Golden Credit Rating. The PBOC also left out its previous comments about “giving full play to the dual roles of aggregate and structural monetary policy tools” in the Q3 report. Li Chao, chief economist at Zheshang Securities believes this signals a marginal tightening of liquidity. He said PBOC would give more attention to financial stability, which includes avoiding funds circulating within the financial sector without entering the real economy, and stabilising exchange rate and balance of payments, the newspaper said.
• China needs to be vigilant and avoid high inflation as M2 growth has been relatively high over the past two years and pressure from imported inflation remains, said 21st Century Business Herald in an editorial. The People’s Bank of China said in its Q3 Monetary Policy report that it will monitor the potential for rising inflation, which is possible amid changing global conditions. The Ukraine conflict has disturbed global energy supply and developed economies face persistent high inflation. Though domestic prices have been tamed by weak demand as the Chinese economy continues to recover, China should learn from the U.S. experience where exploding demand demand and excess cheap liquidity provided a hotbed for high inflation, the newspaper said.
• Property developers are accelerating the delivery of unfinished housing projects, though they still remain cautious about kicking off new projects amid sluggish demand, Caixin reported. The decline in completed projects had been narrowing rapidly on a year-on-year basis. On a month-on-month perspective, the completed areas increased by 41.5% in October, showing signs of stabilization, Caixin said. The delivery of completed homes will continue to accelerate following recent measures to help ease developers’ financing pressures, the newspaper said.