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The following lists highlights from Chinese press reports on Wednesday:

China's regulatory priorities in H2 are to prevent and resolve financial risks and push for the openness of the finance industry, the 21st Century Business Herald reported citing recent meetings of several ministries and commissions. Banking and securities regulators aim to optimise financial governance systems, including actions on banking risks, illegitimate property loans, off-site financing and bond defaults, the Herald said. China should "stay before the curve" and proactively deal with risks from shadow banking and bad loans, since bad loans have been on a slight rebound and are likely to increase further in the upcoming quarters, the newspaper said citing analyst Ming Ming of Citic Securities. The abrupt increase in leverage ratios are also of concern and China is taking action such as equity finance and encouraging the public offering of infrastructure programs, the Herald said citing Wu Yaping, a director from the Investment Research Institute of NDRC.

China's second-half recovery is critically dependent on boosting consumption through the orderly resumption of work and production and clearing obstacles to spending, according to a report in the official newspaper the People's Daily. Citing Zhang Zhanbin, a professor from the Party School of the Central Committee of the CPC, the Daily's report said reduced taxes and easier funding options should be extended to the manufacturing industry, while also prioritising investment in essential infrastructure projects. The government should also remove barriers to attracting investment from private capital, which has accounted for more than half of total investment in recent years but declined in the first half of 2020, Zhang said.

China's retail sales may have registered positive growth in July with an estimated gain of 2% y/y from -1.8% for June, the Shanghai Securities News reported citing Tang Weijian, the chief analyst with Bank of Communications. The upbeat consumption figure is partly due to auto sales, which are reported to have increased 5% y/y in July, up from -6.2% in June, according to Zhu Jianfang, the chief economist with Citic Securities.

Some Chinese advisors and officials have raised concerns after banking regulators stepped up pressure to force regional lenders to merge, fearing a negative impact on governance and capital quality, the China Securities Journal reported. There have been eight mergers of regional banks since May, the newspaper said. Forced consolidation without business consideration may create bigger banks that will make it harder for local customers such as farmers to obtain financing, the journal said citing Wang Xin, the head of the research department of the PBOC.


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