MNI China Press Digest Sep 4: PBOC, Fiscal Policy, Housing

Highlights from Chinese press reports on Monday:

• China will continue opening its financial industry while maintaining financial security and stability, according to Jin Zhongxia, director-general at the International Department of the People's Bank of China. Speaking at the China International Financial Annual Forum, Jin noted the global economy saw more than 3% of payments made using yuan during July and cross border traders used the the currency for 24% of goods trade between Jan-July. Overseas entities now hold offshore yuan assets totalling CNY9.8 trillion, and China has recently shown the largest improvement in the OECD's index of restrictions on foreign direct investment in the financial industry. (Source: Yicai)
• China should make use of existing fiscal and monetary policy to respond to economic difficulties, according to Guan Tao, former director at the State Administration of Foreign Exchange. Guan noted policymakers are not constrained by inflation which allows them space to intensify monetary and fiscal measures. Although the government did not meet market expectations to increase the deficit ratio and issue more special government bonds, the measures to accelerate local government special bonds issuance and improve tax policies had made a difference. In future, Guan expects further policy announcements on local government debt reduction plans, noting the central government has a low debt burden and therefore has room to deal with local fiscal risks. (Source: Yicai)
• The housing market in major cities will usher in an upward trend following the recent relaxation of mortgage lending rules by four tier-one cities. Home sales in Sept and Oct, the traditional peak season, will likely rise as first-home buyers enjoy preferential mortgage rates regardless of their previous credit records, which will restore market sentiment. Homeowners in Beijing are rushing to sell their first house, as authorities give replacing a new home the same treatment as a first home purchase and the down-payment ratio reduces to 40% from 80%. The transaction volume of second-hand houses in Beijing on Sept 2 was about 1,200 units, a rise of more than 100% compared to less than 600 units last Saturday, according to data by Centaline Property. (Source: Securities Times)