China Press Digest: Friday, August 25

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

Friday, August 25:

     China and Saudi Arabia will create a joint US$20 billion fund to invest in

infrastructure, energy, mining and materials, the South China Morning Post

reported Friday, citing Saudi Energy Minister Khalid Al-Falih. Al-Falih said the

two countries plan to sign 11 deals worth about US$20 billion this week. Saudi

Arabia is considering contributing some parts of the fund in yuan, Mohammed

Al-Tuwaijri, the country's vice-minister of economy and planning said. The fund

would come as Saudi is trying to regain its spot as the biggest oil supplier to

China, its biggest trading partner, after Russia took over the top spot last

year. Analysts said Saudi is eager to cooperate with China due to China's

surging economic influence and the U.S. soft power failure in some countries.

Both China and Saudi are also hoping to get more economic influence in the

world, according to the newspaper. (South China Morning Post)

     Most of the 59 property developers listed as A shares which have already

released their first half-year results stressed they would invest in expanding

China's rental housing market followed government prompting to expand rental

housing supply, the Shanghai Securities Journal said in a front-page report

Friday. The development of the rental housing market and active participation of

listed property companies will further curtail the rise of housing prices and

help the property market to reach a balanced and healthy development status, the

newspaper quoted experts as saying. Currently, larger property companies tend to

have higher profit growth due to stronger sales, the newspaper noted. "Larger

sales scale means lower financing costs and higher efficiency in land

acquisition," the newspaper said. (Shanghai Securities Journal)

     Ministry of Commerce spokesman Gao Feng said Thursday one of the ministry's

next most important tasks will be improving checks of the authenticity of

outbound investments, according to China Securities Journal Friday. The ministry

will create a "negative list" of prohibited investment sectors to guide Chinese

companies' outbound investment and will conduct random inspections of their

overseas investments. (China Securities Journal)

     China's financial risks are more complicated than ever, Yu Xuejun, chairman

of the supervisory board for key state-owned financial institutions under the

China Banking Regulatory Commission, said Thursday at the 2017 China Banking

Development Forum, the China Securities Journal reported Friday. Yu said China's

credit continues to surge, financial institution's balance sheets are expanding

rapidly and their business structures are undergoing major changes. He also

noted financial regulators are lagging behind financial innovation and rapid

changes in financial institutions, adding it's becoming more difficult to manage

and regulate China's macro-economy. (China Securities Journal)

     A report by the Chinese Academy of Social Sciences on the Chinese

government's balance sheet shows China's total assets can fully cover its total

liabilities and still have room for flexibility, the Economic Information Daily,

a newspaper under the Xinhua News Agency, said in a front-page report Friday.

From 2010 to 2015, the ratio of Chinese government's net asset to GDP was above

80% on average, with a fluctuation range of CNY40 trillion to CNY60 trillion,

the newspaper said, citing the CASS report which was released on Thursday. Chen

Hanwen, an accounting professor at the University of International Business and

Economics, said the data show China has the capability to manage financial risks

and refute speculation that China's economy is at risk of collapse. The CASS

report, however, cautions about the risk of accumulated debt. (Economic

Information Daily)

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

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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]