China Press Digest: Friday, September 8

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

Friday, Sept. 8:

     The People's Bank of China is likely to rely on its medium-term lending

facilities (MLFs) to deal with liquidity volatility this year, so the

possibility for a requirement reserve ratio cut will be slim, the Securities

Daily said in a commentary Friday. Since the second quarter, the PBOC has

conducted MLF operations at least once a month, the newspaper said, noting that

outstanding MLFs increased by CNY881.7 billion in the first eight months of this

year. The PBOC might carry out another MLF operation this month because of

increased capital demand before the National Day holiday the first week of

October, the newspaper argued. (Securities Daily)

     New liability for Chinese joint-stock banks sharply decreased in the first

half of the year because of strict regulation of interbank activity, the 21st

Century Business Herald reported Friday. The newly added liability of eight

joint-stock banks whose stocks trade as A-shares stood at CNY281.3 billion,

compared with the CNY5.5 trillion in the same period last year, while new

interbank liability dropped by CNY1.1 trillion. Many banks have started to turn

to deposits but have had trouble competing for those against the big state-owned

banks. With the People's Bank of China focused on tight balance, money market

rates will rise further, putting pressure on banks' liability costs, the

newspaper argued. (21st Century Business Herald)

     China is planning to encourage foreign investors to participate in the

mixed ownership of state-owned enterprises as it overhauls the ownership system,

the Economic Information Daily reported Friday. The authorities are considering

policies to simplify processes and relax restrictions on introducing foreign

capital, the newspaper said, citing unidentified people with knowledge of the

plans. Some local governments are also considering how to optimize changes to

the SOE system and bolster the vitality of those businesses. (Economic

Information Daily)

     The Chinese property market maintained good momentum in the first six

months of this year, according to the half-year reports of listed real estate

companies, the 21st Century Business Herald reported Friday. The result was an

increase in inventories for the companies, with the volume reaching a total of

CNY3.92 trillion, rising 10% compared with the same period last year. The

companies are making efforts to destock and predict that house prices will fall,

the newspaper noted. (21st Century Business Herald)

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

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

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