Free Trial

MNI China Press Digest, Oct. 8: Yuan, Fiscal Policy, Slowing

     BEIJING (MNI) - The following lists highlights from the Chinese press for
     The yuan exchange rate will rebound once its rate formation system is
stabilised, and thus current fluctuations can be ignored, said Liu Shijin, a
member of the Monetary Policy Committee at the PBOC, in his article published on
Economic Daily. Fluctuations of the yuan should not be exaggerated, as two-way
fluctuations are more obvious and expectations for the depreciation of the yuan
have weakened, Liu said. China's strong fundamentals are capable of keeping the
yuan stable and at a reasonable and balanced level, Liu noted. The key is to
continue to let the market play a bigger role in FX and to enhance flexibility
of the yuan, while knowing fluctuations are normal, he said.
     China will further expand domestic demand and adjust its economic structure
by implementing a more active fiscal policy, China's Finance Minister Liu Kun
said, according to the People's Daily. China will cut tax for companies, use
fiscal revenue to support important infrastructure projects, facilitate
consumption, and improve people's livelihoods, Liu said. The Ministry of Finance
has decided to aid companies facing problems during the trade war with the U.S.
The Chinese government will support these companies by allowing affected
employees in certain companies to transfer to other jobs or to receive training,
Liu said. The fiscal policy should be flexible and adapt to actual situations in
order to better serve the real economy, Liu said.
     The growth in Chinese tourism travel revenue during the Mid-autumn Festival
holiday and the National Day holiday has slowed to a ten-year low, WallStreet CN
reported, citing Citic Securities. Some 726 million Chinese individuals
travelled domestically during the two holidays, a 9.4% y/y growth, compared with
growths of 12.0% in 2017 and 12.8% in 2016, according to the analysts, citing
data from the Ministry of Cultural and Tourism. Revenue of domestic travel grew
9.0% y/y to CNY599.08 billion, lower than the 14.0% and 14.4% gains in 2017 and
2016 respectively, the analysts said. While official overseas travel data were
not offered, outbound tourism of Shanghai and Beijing customs -- which comprises
half of China's outbound travel -- dropped, the analysts said. The drops were
due to a bottlenecking of tourism facilities, as well as the fact that the
Mid-autumn Festival and National Day holidays this year were separated by a
six-day gap. It possibly also reflects slowing consumption during an economic
slowdown, Citic Securities said.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86-10-8532-5998; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.