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MNI China Press Digest October 12: Credit, PSL, Zero-Covid

MNI (Singapore)
MNI (Singapore)

The following lists highlights from Chinese press reports on Wednesday:

  • Credit expansion in infrastructure, manufacturing and real estate is expected to provide ongoing strong support for growth in credit and total social financing in Q4, the Securities Times reported after new loans and aggregate finance rebounded more than expected in September. Continued pro-growth efforts are required and the central bank could consider guiding the benchmark Loan Prime Rate down further and cutting the reserve requirement ratio, the newspaper said. Policies aimed at encouraging manufacturers to upgrade their equipment helped drive a near CNY1.35 trillion increase in medium and long-term loans, accounting for a significant portion of total new loans of CNY2.47 trillion, the newspaper said citing Minsheng Bank chief economist Wen Bin. Growth in household sector borrowing indicated a recovery in consumer confidence, Wen added.
  • The People’s Bank of China’s recent relaunch of its pledged supplementary lending program may provide funds to ensure the delivery of unfinished housing projects, Caixin reported. The market had expected the return of PSL as policymakers had announced CNY1.6 trillion of policy bank-backed financial instruments to boost infrastructure and ensure housing project delivery but without specifying the funding source, said Caixin. The previous use of PSL funding to deliver underground pipeline and water conservancy projects suggests it may be used to help fund infrastructure construction, Caixin said citing CITIC Securities analysts who expect larger scale use of PSL. The PBOC issued a net CNY108.2 billion of PSL to three state-owned policy banks in September, after pausing it for two and a half years.
  • China insists on maintaining its dynamic “zero-Covid” policy as it is the most effective way to manage the epidemic and avoid the potentially high costs associated with uncontrolled outbreaks, said the Party-run People’s Daily in a commentary. Vaccination rates in China are not yet at a sufficient level to protect against severe illness and death as only 86.26% of the population above 60 years old have received booster shots, and there are a considerable number of children and adults not suitable for vaccination, the newspaper said. Some countries choose to "coexist with the virus" as they are unable to bear the cost and failed to keep it controlled in the early stage, but China is capable of preventing any outbreak, the newspaper said.
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