MNI China Press Digest June 12: Pension, Yuan, PPI

Highlights from Chinese press reports on Friday:

• China’s decision to add savings treasury bonds to the range of eligible personal pension investment products will channel more long-term capital into the bond market and support its high-quality development, said Dong Ximiao, deputy director of the Shanghai Finance and Development Laboratory. Authorities should lower the overall tax burden on personal pension products and consider raising investment limits to expand participation further, Dong said. He suggested increasing the current annual contribution cap to CNY36,000 from CNY12,000 to attract more investors to open and fund accounts.
• A Bank of China white paper found growing acceptance of the yuan in cross-border transactions, with more than 60% of surveyed Chinese companies noting their trading partners were either "relatively accepting" or "fully accepting" of yuan-denominated settlement. More than 30% of overseas companies surveyed held yuan revenues as deposits, the highest proportion in nearly five years. Nearly 70% of overseas commercial banks surveyed said their yuan-related business was growing at least as fast as their overall business, while more than 90% planned to expand cross-border yuan products and services.
• China's producer price inflation accelerated in May despite falling oil prices, largely because of a lagged transmission effect from earlier energy cost increases, said Li Xifeng, an analyst at China Chengxin International Credit Rating. While prices for upstream oil extraction and refining fell or remained flat month-on-month, downstream industries continued to post strong gains. Prices for chemicals, chemical fibers, rubber and plastics, and textiles rose 2.0%, 1.5%, 1.5%, and 0.7%, respectively, from April. Based on weighted estimates, those four downstream sectors contributed about 0.22 percentage points to monthly PPI growth, accounting for roughly 40% of the overall increase, Li said.