MNI China Press Digest Feb 10: Economy, Bonds, Tax
Feb-10 01:22By: Lewis Porylo
Peoples Bank of China+ 2
- Yicai’s China Chief Economists Confidence Index fell to 50.2 in February, slipping from 50.32 the prior month but staying above the 50 boom-bust line for seven straight months. Economists expected the yuan’s central parity rate against the US dollar to hold steady in February, averaging 6.9 by month-end and 6.8 by year-end. They projected that China would set its 2026 GDP growth target at about 5%, its fiscal deficit ratio target at around 4%, and its CPI target at roughly 2%. Cai Wei of KPMG said that the Ministry of Finance has signaled it will increase—not cut—overall fiscal spending intensity in 2026. With households, businesses and local governments still cautious and financing capacity constrained, he said the central government will take the lead in expanding its balance sheet, maintaining necessary deficits and debt issuance to boost domestic demand and stabilise investment.
- China’s 10-year government bond yield broke below the 1.8% threshold on Feb 9, falling to a low of 1.793% for the first time since November 2025, Yicai reported. Analysts said the bond market has entered a phase of sustained recovery amid heightened volatility across other asset classes. “The market is primarily pricing in expectations of post-holiday rate cuts,” a senior bond market researcher told Yicai. Ming Ming, chief economist at CITIC Securities, said the recent rebound was driven by diminishing return opportunities in equities and commodities, alongside accommodative signals from the central bank that have lifted expectations for broader monetary easing. Liu Yu, chief fixed-income analyst at Huaxi Securities, said inflation concerns could pose the main headwinds to further declines in bond yields.
- China will extend its tax incentive policy for returned cross-border e-commerce export goods for an additional two years, the State Taxation Administration announced. Under the policy, cross-border e-commerce goods that are returned to China in their original condition within six months of export due to unsold inventory or customer returns will be exempt from import duties, import-stage value-added tax and consumption tax. The extension will lower the cost of export returns for cross-border e-commerce businesses and support the growth of new forms of foreign trade, Yicai reported. Preliminary data from customs authorities showed that China’s cross-border e-commerce imports and exports reached CNY2.75 trillion in 2025, up 69.7% from 2020.
