MNI China Press Digest July 10: CPI, E-commerce, Stimulus

Highlights from Chinese press reports on Thursday:

• China’s consumer price index could turn negative in July due to base effects, after June’s rebound to 0.1%, ending four consecutive months of decline, Yicai.com reported, citing Wang Qing, analyst at Golden Credit Rating, who predicted a CPI print of -0.2% next month. Exporters’ redirection of sales to the domestic market risks downward pressure, while the consumer goods trade-in scheme will continue to provide support, he noted. Authorities see the promotion of prices as an important policy goal in the second half of the year, which opens space for additional fiscal stimulus to boost consumption, as well as an interest rate cut, he said.
• China’s demand for e-commerce logistics may slightly decline in the short-term as mid-year promotional activities come to an end, industry analysts told Securities Daily. China's E-commerce Logistics Index reached 111.8 points in June, rising for four consecutive months, with the total business volume sub-index at 130.8 points, up 0.6 points from May. An analyst from the China Logistics Information Centre said consumer enthusiasm for online shopping surged in June given the combined promotion of government subsidies and the June 18 promotional event.
• Authorities will likely introduce reserve policies in a timely manner in accordance with situational changes, having kept room for additional special treasury and policy-based financial instruments, as well as the potential for more local government special bonds to buy up unsold homes and vacant land, Shanghai Securities News reported, citing analysts. The government retains over CNY7 trillion of its fiscal quota unused for the second half of the year, including CNY4.03 trillion from the budget deficit, CNY2.24 trillion from local special bonds, and CNY745 billion from ultra-long-term special treasuries, the newspaper said, citing Wen Bin, chief economist of China Minsheng Bank.