September 12, 2023 01:33 GMT
MNI China Press Digest Sep 12: Yuan, House Market, Gov Debt
Highlights from Chinese press reports on Tuesday:
- The People’s Bank of China will likely introduce new and forceful measures to shore up the yuan after it flagged a desire to take action when necessary on Monday, 21st Century Business Herald reported Tuesday citing traders. More wholesale investors have started to reduce CNY short positions and shifted focus to the possibility that the improved Chinese economy would attract overseas capital to enter the A-share market after the PBOC’s monetary supply data in Aug delivered positive signs. However, traders are betting a weaker yuan may not eventuate should the U.S. dollar index remain above 105. The traders note more Asian countries - besides China and Japan - may enhance their currency support if further U.S. Federal Reserve rate hikes boost USD.
- China will take effective action to prevent and defuse local government debt risks while balancing economic growth and high-quality development, according to Li Hongzhong, member of the Political Bureau at the CPC Central Committee. Speaking at a special government debt management review meeting, Li said local governments can raise debt to promote Chinese-style modernisation, but ensure relevant systems were in place to strengthen government debt supervision in accordance with the law. (Source: Yicai)
- House transaction volume in tier-one cities rebounded after Chinese authorities eased restrictions, according to the China Business Network Tuesday. More than 2,800 second-hand houses were sold in Beijing last weekend, twice the average weekend transaction volume in August, analysts said. They predicted the property market would further recover in Q4 and cities would continue to reduce tax, house-buying fees and relax relevant restrictions on mortgages. But local governments still need to set proper down-payment ratios and mortgage interest rates accordingly to prevent rapid price rises in hot cities, the report said.