CHINA PRESS: Steel, Solar Energy Sector To Cut Overcapacity

Interbank market liquidity will remain loose in June following the PBOC’s reserve requirement ratio cut and increased medium-term lending facility rollover in May, Economic Information Daily reported, citing analysts’ expectations. However, liquidity could fluctuate given increased fiscal spending at the end of the month, said Ming Ming, chief economist at CITIC Securities. Analysts should track the intensity of central bank’s liquidity support closely as recent deposit rate cuts may further exacerbate the migration towards wealth management products, Ming added.

China’s manufacturing PMI of 49.5 in May, up 0.5 percentage points m/m, shows the intensified proactive macroeconomic policies have begun to take effect, according to Zhang Liqun, a special analyst at the China Federation of Logistics and Purchasing. However, Wen Tao, an analyst at the China Logistics Information Center, said future trends still need observing as foreign trade remains uncertain. Multiple measures are needed to expand domestic demand and boost economic momentum, Wen added.

The U.S. has successively introduced discriminatory measures against China since the Geneva talks, gravely undermining the hard-won trade consensus reached by both sides, a Ministry of Commerce spokesperson said. The U.S. has issued export control guidelines for AI chips, halted the sale of chip design software and announced the revocation of Chinese students’ visas, the ministry noted. Beijing firmly rejects it has violated the consensus and will take strong measures to defend its legitimate rights if the U.S. insists on going its own way, the ministry added.