MNI China Press Digest April 2: Services, Cash Pooling, Bonds

Highlights from Chinese press reports on Wednesday:

• China’s services trade grew 9.9% y/y to CNY1.3 trillion in the first two months, with exports and imports growing 13% and 7.8%, according to data from the Ministry of Commerce. The services trade deficit was CNY210 billion, a decrease of CNY8.5 billion from the same period last year. Travel services increased 29%, with exports and imports rising 142.6% and 21.1%. (Source: Securities Daily)
• China will promote a pilot cash-pooling service nationwide for multinational companies to integrate domestic and foreign currency management, according to a draft statement released by the People’s Bank of China. The initiative, currently open for public feedback, further facilitates the transfer and use of funds, and reduces corporate costs. The pilot programme launched in Beijing and Shenzhen in 2021 before expanding to eight other regions in 2022. (Source: China Securities Journal)
• China issued a record CNY2.85 trillion of local government bonds in Q1, up 80% y/y, of which new bonds reached CNY1.25 trillion, an increase of about 48% y/y, while refinancing bonds amounted to approximately CNY1.6 trillion, up 119% y/y, Yicai reported, citing China Bond Information Network data. Hu Hengsong, secretary-general at the China Urban Investment 50 Forum, said the issuance of new special bonds this year was fast given some 15th Five-Year Plan projects have been launched ahead of schedule. Wen Laicheng, a professor at the Central University of Finance and Economics, noted local governments relied on issuing bonds to raise funds needed to stabilise investment and the economy after fiscal revenue growth proved sluggish.