MNI Press Digest Feb 18: Liquidity, Spending, Inflation

The following lists highlights from Chinese press reports on Thursday:

• The PBOC may drain net liquidity after the New Year holiday with a small reduction in MLFs and reverse repos, the Shanghai Securities News reported citing Yan Se, chief economist of Founder Securities. The government faces less pressure on bond financing early this year compared to the previous years, so the central bank needs no large liquidity injection at this time, the newspaper said citing Shao Xiang, macro analyst of Soochow Securities. There will be CNY200 billion MLFs and CNY280 billion of reverse repos maturing on Thursday, the newspaper said.
• Retail and dining sales in the week-long Chinese New Year rose 4.9% over the comparable period in 2019 to CNY821 billion, 28.7% more than last year, the Ministry of Commerce said on its website late Wednesday. Sales of jewellery and clothing more than doubled while communication and home electronics also registered double-digit growth, according to the Ministry. Restaurant sales in large cities surged as many residents avoided returning to rural ancestral homes and celebrated the holidays locally.
• China's CPI may turn positive after March, the PBOC-run newspaper Financial News reported citing Wang Qing, an analyst with Golden Credit Rating. China is likely to face more moderate inflation in 2021 than other nations given its more stable monetary policy, slow wage growth and steady price expectations, the newspaper said citing Shen Jianguang, chief economist of JD Digits. In the long run, inflation and increasing asset prices due to higher importing costs may be a concern, Shen added. China's CPI fell 0.3% y/y in January after gaining 0.2% in the previous month.