China Press Digest: Friday, Oct. 13

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

Friday, Oct. 13:

     The tighter bias in the People's Bank of China's monetary policy will last

for a few years and the deleveraging process for state-owned companies will need

another three to five years, Li Yang, a senior researcher with the Chinese

Academy of Social Science and advisor to top leaders, told the China Securities

Journal in an interview published Friday. Risk controls will focus on

deleveraging, particularly among SOEs, through managing non-performing assets,

reducing excess inventories and eliminating zombie companies, Li said. It will

be a challenge to deal with the downward pressure deleveraging will put on

economic stability. The local government debt risk has been accumulating since

2015, Li noted, adding that as of the end of 2016, combined central and local

government debt was equal to 22.7% to 28% of GDP. China needs to enhance

comprehensive reforms to reduce local governments' intention to increase debt,

Li suggested.(China Securities Journal)

     The issuance of enterprise bonds have supported infrastructure projects and

key strategic sectors effectively, the Securities Daily reported Friday, citing

an official with National Development and Reform Commission (NDRC). In the past

five years, the NDRC approved issuance of 2,206 enterprise bonds totaling

CNY3.26 trillion. Since the minimum credit rating requirement for enterprise

bonds is high, issuers are mainly state-owned enterprises, local government

funding vehicles and big companies, the report noted, so the public service

sector benefits from issuance of the bonds. The NDRC will further strengthen

regulation of fund-raising via bond issuance and strictly ban local governments

from providing guarantees and fiscal subsidies to relevant enterprises.

(Securities Daily)

     Vehicles sales in China continued to rise in September, with the

performance of the commercial vehicle sector leading the gain, the China

Association of Automobile Manufacturers (CAAM) said on its website late

Thursday. On a month-on-month basis, total vehicle sales, comprising both

passenger cars and commercial vehicles, jumped 23.9% to 2.71 million units,

compared with a growth rate of 10.89% in August, according to CAAM. On a

year-over-year basis, total vehicle sales rose 5.7%, compared with 5.27% growth

in August. In the first nine months of the year, sales increased 4.5%

year-on-year to 20.23 million units, compared with 4.25% growth in the

January-August period.

     The mortgage interest rate for first home purchases rose to 5.22% on

average in September, the ninth straight increase, but the size of the rise was

smaller than previous increases, the Economic Information Daily reported Friday,

citing analysts. The mortgage rate is likely approaching its peak since the

current rate is now 1.06 times the benchmark rate, the report said. The time

that banks are taking to approve mortgage loans has increased because banks are

being more cautious about extending loans due of their limited credit quotas.

This problem is expected to worsen in the fourth quarter and early  next year as

banks strictly control the increase in their mortgage lending, the report

warned. (Economic Information Daily)

--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

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