MNI China Press Digest, Oct 9: Q3 GDP, FX Reserves, Liquidity

MNI (Beijing) - The following lists highlights from Chinese press reports on Friday:

China's GDP may accelerate to 7% in Q4 after a forecast of 6% in Q3, the China Securities Journal reported citing Lian Ping, the chief economist at Zhixin Investment. Exports continue to beat expectations as investment and consumption rebound quickly supported by government policies, Lian said. This strong momentum for exports will last into Q4. Lian's Q3 forecast of 6% is more upbeat than most, the newspaper said, citing 5.2% projected by the China Center for Economic Research. The statistics authority is set to publish the data on Oct. 19.

China's forex reserves should be stable this year despite a dip of 0.7% m/m to CNY3.14 billion in September, the Securities Daily reported citing Wang Chunying, a deputy director of the State Administration of Foreign Exchange. Wang attributed the drop to the rising dollar index, cross-border capital flows, and fluctuating asset prices. The yuan may widen its fluctuations under pressure from a potentially stronger dollar index, while counting on China's tighter monetary policies for support, the Daily citied the CIB macro-research team. China's higher rates of returns due to tighter liquidity will lead to wide fluctuations around 6.75 to the dollar, and the yuan shows no signs of either prolonged appreciation or depreciation, Li Chao, an economist from Zheshang Securities, told the Daily.

China may seek to further reduce borrowing costs by guiding loan rates lower, cutting service charges and implementing discounted credit policies, the Securities Daily reported citing the Caixin Research Institute. Policymakers may also increase funding support to manufacturing and small business while preventing the flow of funds to property and financial markets, the Daily reported citing Caixin. Liquidity in October may be under pressure given government bond supply and less fiscal expenditures, so the PBOC may increase OMO operations, renew MLFs in excess or even lower RRRs, the newspaper said citing analyst Ming Ming from CITIC Securities.

About 637 million Chinese undertook travel tourism during the eight-day National Day holiday in early October, or 79% of the same number a year ago on an adjusted basis, Xinhua News Agency said citing the Ministry of Culture and Tourism. Domestic tourism generated CNY466 billion in revenue during the so-called Golden Week holiday, a recovery of 69.9% y/y, Xinhua said. Travelers took longer journeys away from home as overseas tourism remains restricted, Xinhua said.