MNI China Press Digest Dec 18: Arrears, Fiscal, Property

Highlights from Chinese press reports on Tuesday:

• The government must focus on clearing arrears to improve the business environment, said Xiao Weiming, deputy secretary-general at the National Development and Reform Commission, at the China Economic Annual Conference. Zhang Yuzhuo, director at the State-owned Assets Supervision and Administration Commission, called for better use of policies such as newly issued local government special bonds and urged state-owned enterprises to take the lead in dismantling the “chain of debts”. Authorities need to strengthen government credibility and raise the cost of default and dishonesty for government departments and state-owned enterprises, he added. Li Jin, chief Researcher at the China Enterprise Research Institute, said state-owned enterprises' payments represent the most powerful “key” to break the deadlock. When signing contracts with private enterprises, especially small and medium-sized ones, they should establish faster payment channels for small deposits and proactively negotiate early settlement of long-outstanding balances. (Source: Yicai)
• Following the Central Economic Work Conference, experts interviewed by Yicai said they expect the fiscal deficit ratio to remain around 4% in 2026. They also project that newly added government debt will exceed CNY12 trillion, reaching between CNY13 trillion and CNY16 trillion, while national general public budget expenditure will surpass CNY30 trillion, growing at roughly the same pace as the economy. The more proactive fiscal policy next year will retain sufficient strength but will avoid a “flood-style” stimulus, an expert said. A relevant official from the Central Financial and Economic Affairs Commission Office stressed that policymakers will calibrate the intensity of fiscal measures to leave room to address future risks and to safeguard fiscal sustainability. Next year, the central government is expected to accelerate the clean up of local subsidies that violate the unified national market framework, thereby reducing related expenditures. These steps will further free up fiscal resources to better support people’s livelihoods and the construction of major projects, an expert noted.
• Property management companies are rebuilding their businesses through professional and differentiated services, shifting from simply “watching homes” to actively operating assets, Yicai reports. Poly Property now combines property services with cultural tourism to create new profit streams. Vanke Services has moved into smart property management, deploying technology systems to help owners cut costs and boost rental income. Country Garden Services has concentrated on core property services while stepping up efforts in older residential communities to tackle long-standing bottlenecks. Peng Yu, deputy research director at China Index Academy, said future opportunities lie in deep exploration of vertical segments. To succeed, property companies must further deepen and refine their services and rebuild durable commercial moats through professional, differentiated value creation, Peng added.