MNI China Press Digest Dec 8: Rate Cut, Pro-Growth, US Rivalry

The following lists highlights from Chinese press reports on Wednesday:

• The PBOC made a 25-bps cut to relending to support SMEs and the rural sector, another loosening after a 50bps RRR cut on Monday, so further policy rate cut may be less likely in the short term, the China Securities Journal reported citing analysts. The RRR cut is expected to drive down the Loan Prime Rate without affecting the medium-term lending facility rate, which will help conserve policy room, the newspaper said citing Wang Qing, an analyst with Golden Credit Rating. MNI noted that LPR will be released on Dec. 20.
• China will emphasize growth next year, keep monetary and fiscal policies stable with a looser leaning, while focusing on expanding domestic demand and promoting consumption, the Economic Information Daily said in an editorial. China may keep its deficit ratio around this year’s 3.2% as well as maintain the scale of new local government special bonds around 2021’s CNY3.65 trillion, the newspaper said. The top priority will be stimulating spending and investment with more consumption vouchers and measures to encourage car and home appliance sales expected, the newspaper said. The slow real estate sector may improve as construction of affordable housing accelerates, forming the focus of real estate investment next year, the newspaper said.
• The world needs to be on guard for the U.S. exporting its economic crisis as it is forced to speed up the tapering by uncontrolled inflation and appearing unable to help boost its economic growth, the state-run Global Times said in a commentary. China’s decision to cut reserve requirement ratios on Monday ahead of the anticipated tapering by the Federal Reserve highlights its ample room for economic stability in rivalry with the U.S., the newspaper said. China’s liquidity release may be a preparation to hedge the potential capital gap and manage the anticipated shock by future U.S. monetary tightening, the Global Times said.