MNI China Press Digest Nov 30: Investment, Real Estate, Yuan

The following lists highlights from Chinese press reports on Wednesday:

• China is accelerating the start of new infrastructure projects, with the growth in infrastructure investment expected to reach about 12% this year, Yicai.com reported citing Wang Qing, chief macro analyst with Golden Credit Rating. He estimates it could lift annual GDP by 1.2 percentage points. Project-backed new special bonds issued by local governments have risen to a record high above CNY4 trillion yuan this year, and over 60% of them have been invested in infrastructure projects, the newspaper said. The government also introduced policy bank-backed financial instrument totaling CNY739.9 billion, and all these funds have been allocated to projects. The National Development and Reform Commission urged all these projects to be started by the end of November, the newspaper said.
• China’s move to lift a ban on equity refinancing for listed real estate firms will help ease developers’ cash flow pressures without increasing their debt burden, with high-quality leading private developers and state-owned developers capable of mergers and acquisitions likely to be the main beneficiaries, 21st Century Business Herald reported citing Chen Mengjie, analyst of Yuekai Securities. Private developers that received bank credit prior to the ban being lifted may continue to benefit, while those who have defaulted on debt may not be able to take advantage of the policy. The recent easing of real estate financing has boosted confidence in the industry, but a long-term recovery depends on a rebound in home sales, the newspaper said citing Chen.
• China needs to ensure a strong domestic economy, improve financial supervision, and reform institutional opening-up to promote the long-term international use of the yuan, reports Shanghai Securities News citing Guan Tao, a former senior State Administration of Foreign Exchange official. The yuan is increasing its standing as a major international currency due to its market-oriented exchange rate and recent resilient performance, the paper said. The use of the yuan in global foreign exchange reserves is set to surpass sterling and the yen due to relaxed restrictions on outbound investment in the yuan bond market, the report noted, citing Michael Spencer, chief economist at Deutsche Bank Asia Pacific.