MNI China Press Digest Oct 20: Local Debt, GDP, Steel

Highlights from Chinese press reports on Friday:

• Local governments will likely issue over CNY1 trillion in bonds in Q4, as about CNY400 billion of the special bond quota remains, while authorities may continue to increase issuance of special refinancing bonds to swap out implicit debts. There are 17 provinces that have disclosed their refinancing plans totaling CNY726 billion as of Oct 13, with the scale exceeding market expectations reflecting great capital demand, according to Feng Lin, analyst at Golden Credit Rating. Wind Information shows up to CNY3.5 trillion infrastructure project-backed special bonds were issued as of Oct 19. (Source: Securities Daily)
• Authorities should cut interest rates to maintain the strong Q3 recovery momentum into Q4, according to Pang Ming, chief economist at Jones Lang LaSalle Greater China. Despite Q3 GDP growth exceeding expectations, authorities still need to address insufficient demand, Pang added. Additionally, the government should reduce financing costs for firms and households and maintain proactive fiscal policy through advancing special-bond issuance and post-investment funds to strengthen demand. Liu Yuanchun, president of Shanghai University of Finance and Economics, said officials had begun to see the property market stabilise, but the large scale of adjustment means investors need to take a long-term view on the sectors' recovery.
• China’s building industry has reduced its proportion of steel demand from 40% of total steel output to 30% in 2023, according to Wang Guoqing, head of the Lange Steel Research Center. Wang said as policymakers promote modern industrialisation, buyers are demanding more industrial grade steel and less construction. China’s proportional demand for high-value-added steel varieties will continue increasing, as the country focuses on boosting consumption in the automotive, consumer goods, cars and home appliances sectors, Wang added. The National Bureau of Statistics announced recently China's crude steel production in September 2023 was 82.11 million tons, down 5.6% y/y but year to date remained up 1.7%. (Source: 21st Century Herald)