MNI China Press Digest April 12: Rates, Commodities, Vaccine

The following lists highlights from Chinese press reports on Monday:

• The PBOC's policy rates may not change if the CPI doesn't rise significantly, given that policy rates are partly pegged to inflation, China Securities Daily reported citing Guan Tao, the chief economist of Bank of China International and a former forex regulatory official. Policy rates are also tied to employment, which is still weaker now than in 2018-2019, Guan said. Liquidity will be tightly balanced in Q2, and Q1 GDP to be released on Friday will likely show double-digit yearly growth but weak monthly growth, the newspaper said citing market participants.
• China will strengthen the regulation of the market of raw materials to ease cost pressures on companies, said Premier Li Keqiang at a forum with economists and entrepreneurs reported by the Xinhua News Agency. China's March PPI rose 4.4% y/y and 1.6% m/m, MNI noted. China will continue stepping up financial support to SMEs and the real economy, Li said. The government will strive to achieve sufficient employment and increase residents' incomes, he said.
• China needs to speed up vaccination efforts and ensure levels close to those of the U.S. and Europe by winter, the Global Times commented. The "selfish" rapid U.S. domestic vaccination program may boost U.S. global control and allow it to introduce a "vaccine passport" program that serve its own interest, the newspaper said. China may also need to ease its hard stance against new infections when vaccination is complete as the rigid measures that helped prevent the spread of the virus also weakened the adaptability of the population, it said.
• China should beware of potential risks from rising bad debts and defaults in the second half of 2021, the Securities Times said citing Huang Yiping, a former PBOC monetary policy advisor. While bank lending last year helped protect the economy and provided a lifeline to SMEs, it is questionable whether all the loans will be repaid, Huang said. He also said the advantages China has enjoyed over other economies since last year may shrink and even have a "lethal" impact, citing U.S. expansion policies affecting investors' sentiment. However, Huang was "very optimistic" that China's performance will be good this year, the Times reported.