MNI China Press Digest Dec 17: RRR Cut, Loan Growth, Housing

The following lists highlights from Chinese press reports on Friday:

• The PBOC is expected to continue to release low-cost liquidity via RRR cuts and structural monetary tools in the first half of next year, taking the favorable window for marginal monetary easing before the Federal Reserve’s likely interest rate hike starting mid-2022, said the Securities Times in a commentary. The PBOC may take the opportunity to increase total credit growth with liquidity boost and lower lending interest rate, the newspaper said, noting that the benchmark Loan Prime Rate could be announced lower next Monday. Though the divergence of monetary policies between China and the U.S. was made due to changes in domestic economic situations respectively, the spillover effects brought about by the shift of the world’s two largest economies cannot be ignored, the newspaper added.
• China's banking system should further lower businesses' financing costs, strengthening the growth of credit and loans and optimizing the lending structure, PBOC Governor Yi Gang said at a meeting with banking financial institutions on Thursday, according to a statement on its website. The central bank will also step up the "cross-cycle adjustment" efforts and "comprehensively" plan for the economy's transition into next year amid the current slowdown, said Yi. The PBOC will strive to improve financial services for the real economy, Yi said.
• China should extend lower mortgage rates to single-home owners, including those who purchased their houses in the last 10 years, so to ease repayment pressure and help boost consumption, said the 21st Century Business Herald in an editorial. Developers should focus on developing long-term rental homes and promote affordable housing construction, so to meet the needs of increasing number of low-income earners and college graduates, the newspaper said. The real estate industry should abandon huge expansion with massive sales targets and turn to meet segmented demand, the newspaper said.