MNI China Press Digest Nov 21: PBOC, Housing Relaxation, Covid

The following lists highlights from Chinese press reports on Monday:

• The People’s Bank of China is expected to further promote credit expansion with structural tools and increase the quota of policy bank-backed financial instruments to boost investment, China Securities Journal reported citing analysts. The PBOC may launch re-lending program to support the consumption of new energy vehicles, or provide discounts on the interest rate of re-lending program for technological innovation, the newspaper said citing Zhong Zhengsheng, chief economist of Ping An Securities. Another key focus of monetary policy is to help accelerate investment with supporting finance. As of October, a total CNY740 billion of policy bank-backed financial instruments were issued and there could be additional quotas announced, the newspaper said citing Ming Ming, chief economist at CITIC Securities.
• More tier-two cities are likely to relax restrictions for home purchases and loans following Xi’an efforts to boost demand for second-hand housing, according to the China Business Journal. Xi'an, which has seen transactions fall 28% this year, will allow people working in the city without formal localised status, known as "non-Hukou residents", to pay six months of income tax - rather than two years currently - before being allowed to purchase a second-hand property. Those deemed "required talents" will not need to pay any income tax before buying. This move follows the 16 point support package announced last week by the central authorities designed to increase liquidity in the stressed property sector, with many analysts saying reviving buy-side demand was key to a recovery.
• China should rectify excessive Covid controls, while avoiding the relaxation of Covid prevention in the name of refining control measures, said Xinhua News Agency in a commentary. It is necessary to correct simple practices such as expanding the scope of control areas and people under observation, and prevent unscientific practices like testing two or three times a day, Xinhua said. Local governments should focus on fighting the epidemic in key areas, take more resolute and decisive measures to curb the spread of the epidemic as soon as possible, instead of taking a wait-and-see attitude, Xinhua said. The epidemic has not gone away, and prevention cannot be relaxed, Xinhua added.