China Press Digest: Monday, December 4

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

Monday, December 4:

     China strongly objects to the U.S. stance taken in a submission to the

World Trade Organization that opposing designating China as a "market economy,"

an unidentified Ministry of Commerce official said Saturday, according to The

People's Daily, the Chinese Communist Party's main mouthpiece. The U.S.

submitted the document to express its opinion about China's WTO complaint

against the European Union still using the "surrogate country approach," rather

than a market economy approach, against China when considering whether China's

products are being sold at below fair prices ("dumped") in EU countries.

Designating China a market economy would limit the U.S. or EU's ability to apply

anti-dumping rules. The MOFCOM official said the case is not related to China's

"market economy" status, nor does the WTO have criteria defining what a

non-market economy is. China already filed another compliant against the U.S.

regarding its argument, the official said. China urges the EU and the U.S. to

obey their obligations and stop using the "surrogate country approach" in

applying trade rules, the newspaper said. (People's Daily)

     The volume of Chinese companies' overseas investments have grown rapidly,

but achieving high-quality overseas investments is key to their future

development, The People's Daily, the official newspaper of the Communist Party,

reported Monday. Some Chinese companies' outbound investments have been

undertaken only for the sake of "going abroad" and expanding into global markets

without thinking about how to achieve a bigger role and greater influence

internationally, the newspaper said. Chinese companies need to learn local

cultures and be able to adapt to changes in foreign countries in which they

invest, the newspaper stressed. Liu Ying, researcher at Chongyang Institute for

Financial Studies at Renmin University in Beijing, was cited as saying

introducing advanced technology, products, services and marketing networks in

China is important to support Chinese companies' investments abroad. Zhi Yulin,

assistant manager of China North Industries Group Corporation, said the yuan's

internationalization should be sped up to provide better support for Chinese

companies' outbound investments and trade. (People's Daily)

     People's Bank of China Deputy Governor Pan Gongsheng said Saturday that the

Chinese government's new regulation issued Friday prohibiting the establishment

of new finance companies which provide payday loans was aimed to clamping down

on illegal practices in the sector, the Financial News, a newspaper managed by

the PBOC, reported Monday. Payday loan companies have been criticized for their

high interest rates, their abusive practices in collecting unpaid loans, as well

as the risks they pose to the financial sector. The new regulation wins time to

solve the underlying problems in the sector, Pan said, referring to the overhaul

of the regulatory framework for new payday loans firms and moves to tighten

regulation on existing payday loan companies. Regulators will create rules to

assess market entry qualifications for payday loan companies and are considering

amending existing regulations for the payday loan companies that were created

around a decade ago, Pan added. (Financial News)

     The State Administration of Foreign Exchange revealed on Friday 20 cases of

illegal foreign exchange transactions, naming the banks, companies and

individuals that are being punished, the Economic Information Daily, a newspaper

under the official Xinhua News Agency, reported Monday. The newspaper said SAFE,

for the first time, made public details of the illegal foreign exchange activity

of non-bank financial institutions. The illegal cases include evasion of foreign

exchange rules - illegally transferring and selling foreign currencies and

foreign currency assets instead of selling through the government - and

illegally transferring Qualified Domestic Institutional Investor (QDII)

investment quotas by non-bank financial institutions, with the fines totalling

CNY59 million, the newspaper reported. (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$$$]