MNI China Press Digest April 26:Yuan, Carbon Subsidy, SME Loan

The following lists highlights from Chinese press reports on Monday:

• The Chinese yuan is likely to trade at around 6.4-6.5 against the U.S. dollar this year, the Economic Information Daily reported citing a report by the Chinese Academy of Social Sciences. China's GDP may reach about 8% growth and policymakers should maintain policy continuity as well as prudently defuse financial risks including establishing "sustainable" model of debt growth, the newspaper said citing the Academy. Inflationary pressure will be moderate in 2021 and the macro leverage ratio may rise, the newspaper said.
• China should consider subsidizing industries and provinces exposed to greater financial risks while pursuing carbon peak and neutrality goals, said Xu Zhong, deputy director of the National Association of Financial Market Institutional Investors and a former research head at the PBOC. In the long run, an auction mechanism should be established to facilitate the trading of carbon allowances and auction proceeds can subsidize risky areas to prevent systemic risks, Xu said in a blog post published by the China Finance 40 Forum. Green policy measures should be included in the monetary policy framework, as they may cause price hikes of some commodities and impact the potential growth rate, said Xu.
• China's five major banks should increase lending to SMEs by more than 30% this year, according to a website statement released on Sunday by the China Banking and Insurance Regulatory Commission. Banks should ensure these micro loans match the rate of growth of other loans and that lending rates be stable at 2020 levels, the regulator said. Large banks should strive to achieve a higher number of new SME clients than last year and include the proportion of "first-lenders" in their internal performance indicators, the regulator said.