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MNI China Press Digest Nov 5: Local Debt, House Prices, Loans

MNI picks key stories from today's China press
Central Bank NewsPolicy NewsPBOCHomepageAPACChinaEM Policy NewsChinaEM Central Bank NewsPeoples Bank of ChinaGlobalStoryRegion
MNI (BEIJING)

Highlights from Chinese press reports on Tuesday:

  • China is likely to issue new local government bonds to swap out local debt rather than special treasury bonds, according to Mingming, chief economist at CITIC Securities. According to Xinhua, a state media outlet, China’s Standing Committee of the 14th National People's Congress had recently deliberated on the State Council's proposal to increase the local government debt limit to replace the implicit debt, Ming noted. Wen Laicheng, a professor at the Central University of Finance and Economics, said using local government bonds could reduce debt costs and risks whilst avoiding the moral hazard of centrally backed special treasury bonds. (Source: 21st Century Herald)
  • House prices are expected to stabilise in Q4 after October saw the release of suppressed home buying demand going back three years, China Business Journal has reported. However, property prices have little chance of increasing in the short term despite market declines significantly narrowing, the newspaper said, citing the E-house China Research and Development Institution. New home sale contracts signed online grew by 0.9% y/y last month nationwide, up 12.5 percentage points from September and marking the first increase in 15 consecutive months, Housing Ministry data showed. The second-hand housing market also saw a 8.9% year-on-year increase, achieving year-on-year growth for seven consecutive months.
  • China’s new yuan loans could fall in October from September due to seasonal factors, but recent policy stimulus measures, especially for the housing market, would enhance banking credit supply capacity, Securities Daily reported, citing analysts. New yuan loans and aggregate finance are expected to be around CNY600 billion and CNY1.5 trillion in October, compared to September’s CNY1.59 trillion and CNY3.76 trillion, said Liang Si, a researcher at the Bank of China Research Institute, noting policy effects would have a time lag. The People’s Bank of China is set to release its monthly financial data next week.
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MNI (BEIJING)

Highlights from Chinese press reports on Tuesday:

  • China is likely to issue new local government bonds to swap out local debt rather than special treasury bonds, according to Mingming, chief economist at CITIC Securities. According to Xinhua, a state media outlet, China’s Standing Committee of the 14th National People's Congress had recently deliberated on the State Council's proposal to increase the local government debt limit to replace the implicit debt, Ming noted. Wen Laicheng, a professor at the Central University of Finance and Economics, said using local government bonds could reduce debt costs and risks whilst avoiding the moral hazard of centrally backed special treasury bonds. (Source: 21st Century Herald)
  • House prices are expected to stabilise in Q4 after October saw the release of suppressed home buying demand going back three years, China Business Journal has reported. However, property prices have little chance of increasing in the short term despite market declines significantly narrowing, the newspaper said, citing the E-house China Research and Development Institution. New home sale contracts signed online grew by 0.9% y/y last month nationwide, up 12.5 percentage points from September and marking the first increase in 15 consecutive months, Housing Ministry data showed. The second-hand housing market also saw a 8.9% year-on-year increase, achieving year-on-year growth for seven consecutive months.
  • China’s new yuan loans could fall in October from September due to seasonal factors, but recent policy stimulus measures, especially for the housing market, would enhance banking credit supply capacity, Securities Daily reported, citing analysts. New yuan loans and aggregate finance are expected to be around CNY600 billion and CNY1.5 trillion in October, compared to September’s CNY1.59 trillion and CNY3.76 trillion, said Liang Si, a researcher at the Bank of China Research Institute, noting policy effects would have a time lag. The People’s Bank of China is set to release its monthly financial data next week.