MNI China Press Digest Sept 28: Local Debt, Consumption, PBOC

Highlights from Chinese press reports on Thursday:

• Inner Mongolia plans to issue CNY66.32 billion of refinancing bonds to repay corporate accounts in arrears that the government guaranteed before 2018. This is the first time a local government has used refinancing bonds to pay off debt in arrears, compared to the previous use of repaying the principal of maturing local-government bonds as well as swapping out existing local implicit debts. This shows that the Politburo's “basket of plans” to address local government indebtedness includes, not only resolving off-balance borrowings via local-government financing vehicles, but also repaying arrears. (Source: Caixin)
• Services consumption will help support the economy next week during the week-long Mid-Autumn Festival and National Day holiday. A total of 217 million train tickets were sold from Sept 13-23, according to data by the China Railway, while the Civil Aviation Administration estimates over 21 million passengers will travel by plane during the break, with an average of over 17,000 flights a day. The popularity of long journeys to Xinjiang and Tibet has increased by over 300% y/y, while outbound tourism will also hit a new high to grow about 500% over the May Day holiday, according to data from online travel booking platforms. (Source: Securities Daily)
• Policymakers will correct unilateral and procyclical behaviour to keep the yuan stable and avoid overshooting, according to the People’s Bank of China. At its recent Q3 Monetary Policy Committee meeting, the central bank said it would strengthen government investment and policy incentives to stimulate private investment, and increase support for key areas like inclusive finance, green development, technological innovation, and infrastructure construction. On housing, the PBOC said it would facilitate an adjustment mechanism for new first-home loan interest rates, and promote the implementation of lowering existing first-home loan interest rates. Overall, authorities believe the domestic economy continues to recover but demand remains insufficient. (Source: PBOC Website)