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The following lists highlights from Chinese press reports on Tuesday:
- China faces structural inflation risks given that rising commodity prices fueled gains in the PPI in March by 1.6% m/m and 4.4% y/y, the China Business News reported. Corporate profits may be cut by the widening gap between the CPI and PPI, costs for downstream industrial companies will gain and SMEs will be hurt, the newspaper said citing Zheng Houcheng, Director of the Yingda Securities Research Institute. However, monetary policy is not likely to tighten soon given weak consumption and investment, CBN said.
- China's investment in new IT infrastructure, such as 5G, data centers, and cloud computing, will reach CNY1.78 trillion in 2021 and CNY10.53 trillion over the next 5 years, reported the Economic Daily citing data from the China Academy of Information and Communications Technology. The government may finance this investment through loans backed by user rights and government procurement contracts which guarantee future incomes, while companies should tap into REITs and asset-backed securities, the Daily said citing Fan Meng, an advisor with the China Center for Information Industry Development. China's top three telecom carriers plan to invest CNY184.7 billion in 5G this year, up 2.44% from 2020, the Daily said.
- The risk of a full-scale war in the Taiwan Straits due to minor incidents is increasing as the situation deteriorates, the Communist Party-run Global Times said in a commentary. The newspaper was writing in response to a warning by U.S. Secretary of State Antony Blinken that China should not try to change the status quo by force. The People's Liberation Army is prepared to send warplanes to fly across the island of Taiwan to declare sovereignty in case of further hostile behavior by the authorities of Taiwan's Democratic Progressive Party, said the tabloid owned by People's Daily. If the Taiwan military dares to fire the first shot at the PLA under any circumstance, that shot will be the beginning of reunification, it said.