MNI China Press Digest June 17:Fiscal, Manufacturing, Property

Highlights from Chinese press reports on Tuesday:

• Authorities will introduce additional fiscal policies in H2 including further support for the consumer goods trade-in scheme, Shanghai Securities News reported, citing expectations from Wang Qing, analyst at Golden Credit Rating, who added the PBOC had room for further interest rate cuts. Retail sales grew by 6.4% y/y in May, the highest since 2024, boosted by the trade-in scheme and early launch of the 618 online shopping festival, analysts said. The government needs to further improve consumers’ spending capacity and willingness, as well as the supply of high-quality goods, the analysts added.
• China’s manufacturing fixed‑asset investment could grow around 8% y/y in 2025, down from 9.2% last year, given the declining trend of exports, weak profits and overcapacity pressure in some industries, said Wu Chaoming, chief economist at Caixin Financial Holdings, noting stronger new quality productive forces and domestic demand will limit the slowdown. Analysts expect authorities to continue cutting interest rates and introduce new incremental fiscal measures in H2, Yicai said. Authorities need to lower interest rates on residential mortgage loans and increase efforts to promote the real-estate market, the analyst added.
• China’s established housing market remains in the process of deep adjustment, after prices in first-tier cities fell by 0.7% month-on-month in May, a decrease of 0.5 percentage points from the previous month, according to Yan Yuejin, deputy director at Shanghai E-House Real Estate Research Institute. Zhang Bo, director at 58 Anjuke Research Institute, said that although prices have adjusted to some extent in May, the general trend of "stopping the decline" remains the focus. Wang Qing, analyst at Golden Credit Rating, said the foundation for the real-estate market needs further consolidation, after real-estate investment fell 10.7% between January and May, widening 0.4 percentage points from the first four months of the year.