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China Press Digest: Friday, September 29

     BEIJING (MNI) - The following are highlights from the China press for
Friday, September 29:
     The Chinese bond market is entering a "slow bull" period, the Financial
News, a newspaper managed by the People's Bank of China, said Friday. As the
State Council meeting announced Wednesday, targeted cuts in banks' required
reserve ratios would boost financial institutions' support for micro-enterprises
and there is relatively high chance the PBOC will implement this policy within a
month, the newspaper said. The targeted reserve ratio cut could inject new
energy into the money and bond markets. But the report noted the signal of a
coming targeted RRR cut does not mean a change in the direction of China's
prudent and neutral monetary policy or the beginning of a "loose period" for
liquidity. As the third quarter is ending, many financial institutions are
positive about the bond market outlook in the fourth quarter, so the State
Council's announcement should further strengthens the market's optimism.
(Financial News)
     The yuan exchange rate will continue a "two-way" fluctuation in the future,
the China Securities Journal reported Friday. The weakening of the yuan in the
last several weeks has been due mainly to the rebound of the dollar index, the
People's Bank of China's new foreign exchange policy, and an increase in Chinese
companies' need to purchase foreign currencies. The yuan exchange rate against
the U.S. dollar will be driven by the two countries' economic fundamentals,
analysts were cited as saying. Given yuan depreciation expectations have
weakened, the Chinese currency could remain relatively strong for some time,
with its room to weaken limited, according to the newspaper. (China Securities
     The Ministry of Commerce announced the government will close all North
Korean firms operating in China within 120 days of September 11, the day the
United Nations Security Council adopted the latest round of sanctions against
Pyongyang, the South China Morning Post reported Thursday. In the notice, the
ministry said all joint ventures with North Korean companies in China as well as
joint ventures set up overseas by the two countries or the citizens of the two
countries would be closed, but companies not within the sanctions eligibility or
those approved by UNSC would be exempt, according to the newspaper.
     The Ministry of Commerce confirmed Thursday it's compiling a "blacklist" of
rules to prevent irrational overseas investment by Chinese companies, listing
punishments for breaking the rules. The ministry is working with related
government bodies on the scheme, and China is "determined" to stop irrational
outbound investment and strengthen examination of the authenticity of companies'
outbound investments, according to ministry spokesman Gao Feng.
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[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

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