MNI China Press Digest Dec 30:Growth, Asset Shortage, Spending

The following lists highlights from Chinese press reports on Thursday:

• China should seize the current favourable opportunity to increase counter-cyclical policies before any U.S. rate hike, by accelerating the initiative-taking fiscal policy and titling prudent monetary policy to loosening, the Economic Information Daily reported citing Sheng Songcheng, a former PBOC official. China should take multiple measures to cope with short-term downward pressures, as any long-term structural reforms will be impossible without economic stability, said Sheng, combating ideas about monetary tightening to help prevent real estate and local government debt risks. Investment will be the main driver to boost growth next year as it takes time for consumption and service industries to recover while exports could weaken, Sheng said.
• Commercial banks in China are finding it hard to meet the requirement of boosting lending to SMEs, due to a lack of safe assets as SMEs’ anti-risk capabilities are weak amid the economic downturn, the 21st Century Business Herald reported citing credit managers. China’s top banking regulator asked the big five state-owned banks to achieve an annual growth of 30% in new inclusive loans, while inclusive loans increased by 24.6% y/y as of October, 9.7 percentage points higher than the average growth of other loans, the newspaper said. Such “asset shortage” even affects the financial market with the rate of 10-year China Government Bond approaching a new low and the discounting rate of bank bills once falling to close to zero, the newspaper said.
• China will promote consumption to underpin the economy, as well as stabilise trade and foreign investment, Shanghai Securities News reported following a Ministry of Commerce meeting outlining work for next year. Efforts should promote the upgrade of urban and rural consumption and meet people’s demands for mid-to-high-end products and services, the newspaper said citing Chen Lifen, research fellow at the Development Research Center of the State Council. It is necessary to strengthen cross-cycle policies to stabilise imports and exports, and attract more foreign investment and expand opening markets, the meeting said.