MNI China Press Digest July 2: Liquidity, Fiscal, Competition

Highlights from Chinese press reports on Wednesday:

• Interbank market liquidity is expected to remain loose in July, given a reduction in maturing certificates of deposit and a likely acceleration in fiscal spending, Yicai.com reported, citing analysts. Maturing certificates of deposit will decline to CNY2.8 trillion and help ease bank liabilities. However, banks may face pressure given over CNY2 trillion in maturing reverse repos at the start of July and the arrival of peak tax payment season, the newspaper noted.
• China issued CNY2.16 trillion of local special bonds in the first half of the year, up 44% y/y and roughly half of the CNY4.4 trillion total planned this year, reflecting the government's proactive fiscal policy stance, Securities Daily reported. Ming Ming, chief economist at CITIC Securities, said authorities usually issue most of the annual quota by the end of September, which could mean CNY2 trillion issued during Q3.
• China’s recent revision of the Anti Unfair Competition Law reflects clear policy guidance for combatting 'involuted' competition, according to Liu Xu, researcher at the National Institute for Strategic Studies at Tsinghua University. Experts interviewed by Yicai noted the law prohibits platform operators from forcing merchants to sell below cost and prohibits large enterprises from defaulting on payments to small and medium-sized enterprises. Zhong Gang, director of Competition Law Research Institute at East China University, said the newly added provisions allow the government to directly regulate platform operators.