MNI China Press Digest Oct 21: Yuan, GDP, Liquidity

The following lists highlights from Chinese press reports on Wednesday:

The PBOC's countercyclical move to remove forex dealers' risk reserves has failed to tame the appreciation of the yuan as global capital picked up the pace of acquiring Chinese assets, the 21st Century Business Herald reported citing analysts. The bullishness has been driven by expectations of easing Sino-U.S. tensions and the rapid recovery of the Chinese economy, the newspaper said citing Zhao Yaoting, global market strategist at Invesco Asia Pacific. Many investors also noted the PBOC made no new measures to counter the yuan's rise, the newspaper said citing an unidentified hedge fund manager. Onshore yuan hovered around 6.6800 against the dollar yesterday after touching the highest this year of 6.6784, the Herald said.

China is "fully capable" of keeping its economy growing at 5% to 6% each year during 2021-2025 under the government's 14th Five Year Plan as the resilient economy and strong industrial structure overcomes the pandemic, the 21st Business Herald reported on Wednesday citing Peng Sen, the chairman of the China Society of Economic Reform and a former NDRC vice chairman. China will focus on reform of market elements such as land, labor and capital to ensure high quality of growth rather than focusing purely on the rate, Peng said.

The PBOC is likely to use open market operations while shunning RRR cuts to maintain liquidity and interest rates at a stable level, the Shanghai Securities News said citing Wen Bin, a researcher from China Minsheng Bank. The PBOC left LPRs unchanged for the sixth month as the strengthening economy forestalled looser policies, the newspaper reported citing comments by Wang Qin, the macro-analyst from Golden Credit Rating. Future fiscal expenditures will improve the liquidity and reduced structured deposits will help banks cut debt costs and push for a decrease in real loan interest rates, Wen said.