MNI China Press Digest Sept 11: Idle Funds, CPI, UK

Highlights from Chinese press reports on Thursday:

• Several provinces have published 2024 local budget execution reports flagging issues with idle capital, Yicai reported. The Hubei audit found that 14 funds, amounting to CNY2.8 billion, had remained unused for extended periods due to incomplete preliminary procedures and other factors. Luo Zhiheng, chief economist at Yuekai Securities, said the blurred boundary between government and market creates the core challenge for government investment funds. Policymakers expect these funds to fulfill policy objectives while also generating market returns, but this contradiction causes fundraising difficulties and imposes excessive regulatory constraints.
• China’s non-food and core-Consumer Price Index (CPI) are expected to maintain upward momentum, supported by a low comparison base, according to Wu Chaoming, chief economist at Caitong Securities. These factors will underpin overall CPI stability, Wu said, adding that from September through December, the likelihood of CPI rising on a month-by-month basis is set to increase. In August, core CPI excluding food and energy climbed 0.9% year-on-year, 0.1 percentage points higher than in July. The CPI in August was unchanged from the previous month and declined 0.4% year-on-year.
• China firmly supports British enterprises in enhancing their confidence to invest in China, further expanding their presence in the Chinese market, and sharing the opportunities presented by China’s vast economy, Vice Premier He Lifeng told UK Secretary of State for Business and Trade Peter Kyle during a meeting at the Great Hall of the People. Kyle affirmed that the UK attaches great importance to its economic and trade ties with China and expressed the its readiness to strengthen communication and coordination with China in order to further deepen bilateral trade and investment relations.