China Press Digest: Friday, August 4

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

Friday, August 4:

     Shanghai and Beijing are leading the way in changes to spending patterns

with these becoming for "development and enjoyment" rather than for "living,"

the 21st Century Business Herald reported Friday. Consumption has contributed

63.4% of China's economic growth in the first half. According to the newspaper,

the top 10 cities in terms of consumption are Shanghai, Beijing, Guangzhou,

Chongqing, Chengdu, Wuhan, Tianjin, Shenzhen, Nanjing and Hangzhou. The

development of the internet and mobile communications has resulted in different

methods of consumption in Shanghai and Beijing -- creating new business models

and opportunities. Guangzhou maintains its strength as a commercial and trade

capital, the newspaper said. Middle and west China, where Chengdu and Wuhan are

located, enjoy less pressure compared with Beijing, Shanghai, Guangzhou and

Shenzhen and with strong purchasing power, they are also the main battlefield

for consumption upgrades. (21st Century Business Herald)

     The exchange rates of significant world currencies appear to be returning

to levels seen earlier and will enter an "adjustment and stabilizing period,"

the Economic Information Daily, a newspaper under the Xinhua News Agency said in

a Friday front-page commentary. The foreign-exchange market has digested the

effects of black-swan events such as Brexit and Donald Trump's victory in the

U.S. election. The U.S. dollar has fallen 10% compared with its high point over

the past 12 months. The sterling and euro have strengthened and the trend of the

yuan is balanced, it said. The dollar's depreciation can be regarded as a "self

examination" by the foreign-exchange market and a correction of an

overestimation of the spillover effects of the U.S. Federal Reserve's

interest-rate rise and Trump's fiscal reforms. Since the start of this year

China's foreign-exchange market has been smooth, the yuan exchange rate is

balanced and the economy remained resilient with potential. Strong fundamentals

will continue to support a stable yuan in the international currency system.

(Economic Information Daily)

     Steadily reducing banks' reliance on local-government bond sales is

important, the Securities Times said Friday in a front-page commentary. Since

July China has been experimenting with allowing individual investors to purchase

local-government bonds directly -- this can disperse risks for the banking

system. However, the main buyers of these bonds are still commercial banks --

which means the capital source is still banks. A better system to meet the

capital needs of local governments is important to China's future economic

growth and stability, the newspaper said. It also recommended increasing

transparency of local-government financing and making full use of market forces.

(The Securities Times)

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

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