China Press Digest: Monday, October 16

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

Monday, October 16:

     China's gross domestic product (GDP) is likely to reach 7% in the second

half of the year, driven by the rapid growth of consumption by family units,

People's Bank of China Governor Zhou Xiaochuan said at an international banking

seminar in Washington on Sunday, according to the PBOC website. China's

debt-to-GDP ratio has risen rapidly under the fiscal and monetary policies

enacted to tackle the headwinds from the 2008 financial crisis and that effort

was worthy. Recently, China has reduced the ratio, though the drop is not huge,

Zhou said, adding that China needs to continue to reduce its leverage ratio. He

also stressed much of China's debt is due to borrowing by local government

financing vehicles. In response to questions on whether China would increase its

leadership in the reform of the international monetary system, Zhou said China

has contributed to global economic management in recent years but the country

currently wants to remain focused on tackling domestic problems, including

furthering its economic development and reforming its financial regulations.

     Risks in the Chinese banking sector have been curbed with stricter

regulation, the Financial News, a newspaper published by the People's Bank of

China, said in a report Monday. The asset quality of the sector has remained

stable, with the bad loan ratio dropping 0.04 percentage point compared with the

beginning of the year, the newspaper said. The China Banking Regulatory

Commission is paying great attention to the illegal flow of consumer loans to

the property sector and will continue to strengthen related regulation. The

CBRC's efforts to control risks and reduce illegal activities in the banking

sector have focused on curbing negotiable certificates of deposit, wealth

management products, and banks' off-balance sheet businesses, the newspaper

noted. The CBRC said it would continue to strengthen such supervision.

(Financial News)

     China would start a new round of "opening to the world," as indicated by

the government's declarations that it would expand imports, the 21st Century

Business Herald reported Monday. China is making efforts to adjust its import

structure to encourage imports of advanced technological equipment and key

components of products, stabilize resources imports, and, to some extent,

increase imports of consumption products, the newspaper said citing Bai Ming,

deputy head of the International Market Research Department at the Ministry of

Commerce. Heretofore, China's imports have been mainly bulk commodities such as

iron ore, crude oil and coal, which expose Chinese growth to a excessive

reliance on the international market, the newspaper noted. To increase

consumption product imports, China is working to speed up the signing of

agreements to inspect and quarantine fruit imports and to facilitate the car

imports. (21st Century Business Herald)

     Hong Kong Secretary for Development Michel Wong Wai-lun said in an

interview with Hong Kong Metro Radio that the government has already identified

210 patches of land on which around 310,000 housing units could be built in the

next six to seven years, according to the Hong Kong government website. Some 70%

of the 310,000 units would be public housing to be developed by public

institutions and non-profit developers to provide cheaper housing for low-income

citizens, Wong said. According to a post by the radio channel, he also stressed

the government effort to identify more land for residential use would not stop

because any pause could adversely affect housing supply in coming years.

--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

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