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The following lists highlights from Chinese press reports on Thursday:
- The Chinese yuan may remain strong by Dec. 31 but depreciate next year as foreign exchange settlements decrease orif the PBOC steps in to prevent one-way bets, the Shanghai Securities Journal reported citing analysts. The yuan may be pressured by the expected U.S. rate hikes, reduced capital inflow, slower growth of trade surplus and external uncertainties next year, the newspaper said citing Hang Seng China Chief Economist Wang Dan. The amount of dollar-to-yuan settlements by Chinese companies has started to decrease in October, weakening support for yuan, the newspaper said citing analysts from Industrial Securities.
- China may again set next year’s quota of local government special bonds above CNY3 trillion, though possibly less than this year’s CNY3.65 trillion so to boost investment in transportation, energy and other municipal and national major projects, Yicai.com reported citing analysts. These investment-boosting bonds will be used to counter downward pressure next year as real estate investment and exports are expected to slow. China may allow some of next year’s special bonds to be issued this year. However, high debt ratios of local governments and decreasing land sales revenue limit further expansions of these bonds, the newspaper said.
- Chinese real estate developers are selling more bonds as regulators ease the tightening of real estate financing, Yicai.com reported. The scale of real estate bond issuance reached CNY37.14 billion in November, a sharp increase of 186% from October, the newspaper said citing data by the China Index Research Institute. The average interest rate of bonds fell by 0.28 percentage point to 3.80% from the previous month. However, debt financing from overseas markets continues to slow with the issuance scale in November set an annual low of CNY1.01 billion. Issuers will have to raise interest rates as investors’ interests declined after some defaults in October, the newspaper said.