MNI China Press Digest March 3: LNG Shock, NPC, Unified Market

Highlights from Chinese press reports on Tuesday:

• The current Middle East conflict poses an overall controllable LNG supply shock to China in the short term, industry insiders told Yicai. Wang Yafei, an analyst at Jinlianchuang, said March and April mark the transition from peak to off-peak domestic gas consumption, with urban gas demand steadily declining with ample domestic output and strong supplies of Russian pipeline gas keeping market fundamentals relatively loose, Wang said. As a result, a shutdown of the Strait of Hormuz would mainly affect China’s domestic market through sentiment in the short term, he added. Companies can also offset potential supply disruptions by adjusting inventories and increasing substitution with coal, renewable power generation and pipeline gas from Central Asia, Wang said. In mid-February, the Ministry of Finance rolled out tax incentives for approved cross-border gas pipeline projects and LNG receiving, storage and transport facilities, Yicai noted. The measures are expected to help companies hedge cost pressures during periods of elevated international gas prices, Yicai said.
• Delegates to the National People’s Congress this week are expected to focus on expanding domestic demand and boosting consumption, the 21st Century Business Herald reported. Domestic demand has become a stable anchor for economic growth, contributing more than 67% to growth last year, the Herald noted. However, Wang Changlin, deputy director of the National Development and Reform Commission, said at a recent press conference that insufficient demand remained a prominent issue in China’s economic development, while supply was also not fully adequate. Zhou Mi, a researcher associated with the Ministry of Commerce, said expanding domestic demand will require higher household incomes and better income distribution, diversifying and upgrading the quality of supply, and promoting coordinated growth in goods and services consumption. Future strategies need to integrate new technologies, such as artificial intelligence, with consumption scenarios to drive more sustainable domestic demand growth, Zhou added.
• China’s State Taxation Administration said recent tax data showed progress in building a unified national market in 2025, Securities Daily reported. Nationwide interprovincial trade sales rose 4.5% year on year, outpacing overall national sales revenue growth. Interprovincial trade accounted for 41% of total sales, up 0.8 percentage points from a year earlier, with 26 provinces recording year-on-year growth. Tax authorities will step up efforts to improve tax and fee service convenience, sharpen supervision and standardise enforcement to better support construction of the unified national market, the administration said.