MNI China Press Digest October 20: Growth, Q4 Credit, PBOC

The following lists highlights from Chinese press reports on Thursday:

• China should be able to stabilise the economy and return to a growth rate of around 5% if Covid outbreaks are controlled, China Newsweek reported citing Liu Yuanchun, president of Shanghai University of Finance and Economics. China’s current inflation is not high and the growth rate of some central and western regions can still reach 6-7%, Liu was cited as saying. The domestic demand-led growth model will show its strength as policies to promote consumption and investment kick in. Liu said to expand domestic demand, it was essential to reform the income distribution system and stimulate the vitality of the private economy and state-owned economy, as well as foreign enterprises in China.
• China's commercial banks are ramping up credit supply in Q4 in response to top policymakers' calls to increase support for the real economy, Yicai.com reported citing industry sources. Banks have lowered the borrowing threshold in key areas, reduced corporate loan rates and improved the efficiency of application reviews. Manufacturing, SMEs, technology-based enterprises, and green development are expected to have received increased credit support, Yicai said. There could be a significant increase in October credit growth and aggregate finance may remain above CNY2 trillion, with the growth rate to accelerate to as much as 10.8% from September’s 10.6%, the newspaper said citing Wang Yifeng, chief banking analyst with Everbright Securities.
• The People’s Bank of China still has room to lower financing costs in the real economy and quicken the use of structural tools to help promote the steady growth of total credit, China Securities Journal reported citing analysts. The average interest rate of corporate loans was 4.05% at the end of August, the lowest rate on record. Both medium and long-term corporate loans, as well as total credit, are about to increase, the newspaper said citing Zhang Xu, chief fixed income analyst at Everbright Securities. Guiding down the 5-year Loan Prime Rate, which many lenders base mortgage rates on, is the key to a recovery in medium and long-term borrowing by residents, the newspaper said citing analysts.