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China Economy to Rebound in H2: Ex-PBOC Off'l

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The following lists highlights from Chinese press reports on Friday:

  • Some Chinese exporters are seeing orders for Covid prevention items doubling as new outbreaks of the Omicron items cause panic around the world, the Global Times said citing industry insiders. Most orders, including for facial masks, test kits and oxygen machines, so far come from Europe and Africa, where the variant was reported to the WHO on Nov. 24, it said. China is also fast-developing vaccines targeting the Omicron variant, the newspaper said citing Zheng Zhongwei, an official at the National Health Commission and head of vaccine development.
  • China must find ways to attract investment into consumer services to sustain its growth, as the property-finance-local government investment triangular model has come to an end, the 21st Century Business Herald said in an editorial citing comments by Yang Weimin, a high-ranked advisor and the deputy director of the economy of the Chinese People's Political Consultative Committee. Weak Q3 growth was partly due to the falling investment in properties, Yang was cited as saying. Housing prices have entered a slow-growth era as population slows, while the high home prices in some cities are unaffordable to middle-income earners, Yang was cited as saying. China should focus more on employment even as large-scale investments may be the preferred policy choice for short-term effect, said the newspaper.
  • More than 10 listed companies in China are in the process of selling their real estate divisions as the authorities maintain tight controls over housing investments, the China Securities Journal reported. Many of these companies are in the agriculture and steel industries, which carry low gross profit margins and previously relied on the high-leverage and high-turnover real estate business to gain margins. The share price of Beijing Shunxin, an agricultural company, rose to a daily limit on Tuesday after the company announced sales of its real estate subsidiary. The gross profit margin of the real estate industry may fall further as some developers will suffer losses on prolonged projects with land parcels acquired at a high premium rate in the past few years, the newspaper said citing insiders.