China Press Digest: Friday, August 11

     BEIJING (MNI) - The following are highlights from the China press Friday,

Aug. 11:

     The green bond market continued to grow in the first half of this year due

to government policy support and the active participation of issuers, the

Financial News, a journal run by the People's Bank of China, reported Friday.

For the first six months this year, the issuance of green bonds totaled CNY77.67

billion, accounting for 23% of the global green bond issuance, the report noted.

Domestic issuance reached CNY67.79 billion, increasing 28% year-on-year. City

commercial banks have been the most active issuers, accounting for 33% of the

total 24 issuers. The next step in the development of this market is a further

improvement in information transparency, the report added. (Financial News)

     Reform of the yuan exchange rate needs to push ahead at a stable pace given

that any change in policy will bring challenges, the Shanghai Securities News

reported Friday, quoting Guan Tao, former head of the balance of payments

division at the State Administration of Foreign Exchange (SAFE) and now a

research fellow with the 40Forum think tank. The final goal of reform is to

achieve a free floating exchange rate, but in the process, there will be some

regression according to the changes of market, Guan said. The appreciation of

the yuan exchange rate is a strong push-back to the yuan depreciation

expectations, Guan argued. Strict controls on overseas direct investments and a

further opening up to foreign direct investment are the main reasons for the

increase in foreign exchange reserves in the first half of the year, Guan said.

(Shanghai Securities News)

     Chinese securities firms' asset management businesses shrank by CNY673.97

billion in the second quarter this year, the first fall in three years, due to

tighter regulation, the Securities Times reported Friday. "Channel

transactions", in which securities companies invest mainly in non-standard

assets for other entities, decreased by CNY619.38 billion, the report noted.

Securities companies have started to turn to asset-backed securities (ABS), the

report said, adding over CNY1 trillion of ABS investments have been recorded in

the first half of this year. (Securities Times)

     The consumption and exports will continue to support the stable growth of

the economy, but investment growth will slow, the Shanghai Securities News

reported Friday, quoting Zou Yunhan, an official at the National Information

Center run by the National Development and Reform Commission, China's top

economic planning agency. The re-stocking cycle is ending and new drivers for

economic growth have not formed yet, Zou noted. Overcapacity and weak private

investment are still problems, while the side effects from the deleveraging

campaign need to be watched closely, Zou warned. The central bank needs to

maintain a prudent and neutral monetary policy and inject liquidity when

regulations are tightened to prevent sharp volatility in financial markets, Zou

added. (Shanghai Securities News)

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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