JGBS AUCTION: 2Y Supply - Test For Policy-Sensitive Debt

The outstanding balance of property loans declined by 4.9% year-on-year to CNY50.74 trillion at the end of Q2, decreasing by CNY1.23 trillion in H1, Securities Daily reported citing data by the People’s Bank of China. The outstanding balance of personal housing loans reduced by CNY716.3 billion in H1 to CNY36.29 trillion by end-Q2, falling 3.8%. For developers, the figure declined by CNY540.2 billion to CNY12.65 trillion, falling 8.5%.

China should boost fiscal support for economic powerhouses in H2, as the combined GDP of the top 10 provinces accounted for 61.4% of the national total, wrote Lian Ping, director of the China Chief Economist Forum in an article published on Yicai.com. Authorities should allow these provinces to take the lead in piloting initiatives such as market-based allocation of factors of production, cross-border data flow, and green finance innovation, leveraging fiscal subsidies and rewards to promote reforms. Authorities could also provide additional awards for central-government-led projects that managed to leverage private investment, said Lian. Meanwhile, targeted monetary-policy tools to support private enterprises and technology innovations should be expanded with additional quota in H2, said Lian, also suggesting a 50bp reserve requirement ratio cut prior to a 10bp policy interest rate cut in Q3.

The total number of electric vehicle charging infrastructure reached over 23 million by end-June, an increase of 43.2% year-on-year, Securities Daily reported citing data by the National Energy Administration. More than 180,000 high-power chargers have been installed nationwide, shortening the charging wait time and clearing a key obstacle for boosting EV consumption, the newspaper said. In H1, the production and sales of new energy vehicles both exceeded 7.4 million units, rising 6.7% and 7.3% y/y, the Daily said citing data by China Association of Automobile Manufacturers.