MNI China Press Digest Oct 16: CPI, Loans, SAFE

Highlights from Chinese press reports on Thursday:

• Higher prices for home appliances, mobile phones and gold offset the wider year-on-year decline of food in September, helping lift China’s CPI to -0.3% year-on-year from -0.4% in August, according to Feng Lin, executive director at China Golden Credit Rating. Wen Bin, chief economist at China Minsheng Bank, noted CPI fell 0.1% year-on-year in the first nine months, as an excess supply of pork and eggs kept food prices subdued. However, Wen said policies to boost domestic demand and stimulate consumption will rebalance market supply and demand, leading to a modest full-year CPI increase of around 0.1% year-on-year (Source: Securities Daily).
• Yuan-denominated loans increased by CNY1.29 trillion in September, driven by a new CNY500 billion policy-based financial tool, improved corporate business sentiment, resilient exports, the gradual implementation of fiscal interest subsidy and property stabilisation measures, and persistently low lending rates, a chief economist told Securities Daily. In September, the weighted average interest rate for newly issued corporate and personal housing loans (in both domestic and foreign currencies) both stood at about 3.1%, roughly 40 and 25 basis points lower than a year earlier. Analysts noted the M1–M2 spread has narrowed markedly since January, signalling stronger business activity and a recovery in household investment and consumption demand.
• China’s State Administration of Foreign Exchange (SAFE) will further advance the high-level opening of the FX market, ensure its stable operation and continue to expand its breadth to enhance the quality and efficiency of financial services for the real economy, the head of the Balance of Payments Department said in an interview posted on the administration’s official WeChat account. Looking ahead, the equilibrium of the balance of payments will stay stable, while the Yuan exchange rate mechanism will keep improving and macroprudential management of the FX market will become more effective, making China better positioned to address external risks and challenges, the official said. (Source: SAFE WeChat Account)