MNI POLICY: China Sees Current Account Surplus Despite Virus

By Archie Zhang

     BEIJING (MNI) - China's current account is likely to register a surplus as

the phase-one trade deal boosted trade and inflows foreign investment rose, Xuan

Changneng, the deputy administrator of State Administration of Foreign Exchange

(SAFE), said at a briefing on Saturday.

     China will keep a basic balance in international payments despite the

coronavirus epidemic, the impact of which is short-term and limited, Xuan said.

     Here are other major points from a joint press conference by several

ministries:

     - China won't see a large-scale inflation, even as interrupted businesses

affect supplies, according to Fan Yifei, a deputy governor of the People's Bank

of China. The prudent monetary policy hasn't been changed, added Fan.

     - China is prepared to allow non-performing loans (NPLs) to increase as the

epidemic damages the economy, though the country has a bigger room to adjust NPL

ratio targets given overall NPL ratio is relatively low, Fan said.

     - The China Banking and Insurance Regulatory Commission (CBIRC) will

encourage banks to boost lending and extend lower-cost credits to small

businesses, according to Vice Chairman Liang Tao. Loan assets and bond issuances

of policy financial institutions will rise as they step up credit supports to

important investment projects, he said.

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

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