MNI China Press Digest March 25: MLF, Premier, Budget

Highlights from Chinese press reports on Tuesday:

• The People’s Bank of China will issue one-year medium-term lending facility (MLF) loans via a bidding system, a move signalling the MLF’s further downgrading as a policy guide, Securities Daily reported, following a PBOC statement. The central bank will offer CNY450 billion in MLF loans on Tuesday, using a fixed-quantity multiple-price bidding method, which will net inject CNY63 billion after offsetting CNY387 billion of maturing funds. The new method reduces MLF funding costs and eases pressure on banks’ net interest margin, the daily said, citing analysts’ expectations.
• Premier Li Qiang signed a State Council Order emphasising that provincial, regional and municipal governments are responsible for ensuring the payment of funds to small and medium-sized enterprises within their administrative regions, 21st Century Business Herald reports. The order clarifies an SME payment term of a maximum 60 days when selling to government agencies, public institutions and large enterprises. Authorities will increase penalties for violations involving illegal acts of retaliation and abuse of power. The order comes into force on June 1.
• China’s national general public budget revenue reached CNY4.3 trillion during January and February, down 1.6% y/y, while expenditure totalled CNY4.5 trillion, a y/y increase of 3.4%, according to Ministry of Finance data. Debt interest payment expenditure hit CNY156 billion, a y/y increase of 19.7%, while the science and technology outlay amounted to CNY112 billion, a 10.6% y/y increase. Spending on urban and rural communities was CNY342.7 billion, down 6.6% y/y.