China Press Digest: Thursday, August 10

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

Aug. 10:

     State-owned enterprises will accelerate deleveraging by reducing debt

ratios and controlling investments, the China Securities Journal reported

Thursday. Guidelines for debt-to-equity swaps, restructuring and debt-risk

prevention are expected to be issued this year, it said quoting officials with

knowledge of the matter. High risks associated with outbound investment are also

being addressed. Some SOEs have speculated in the financial sector jeopardizing

the security of state-owned assets. Authorities should establish rules to curb

this, the report said. (China Securities Journal)

     Low inflation is likely to continue in the long term considering both

consumer- and producer-price indexes will fall in the second half of this year,

the Securities Times said Thursday. The contribution of consumption to economic

growth is increasing owing to high prices but the rise of consumption is slow,

the commentary said. The "new economy" is highly influenced by price factors but

the quality of economic growth is lagging, it said. (Securities Times)

     Companies are buying wealth-management products issued by banks at a faster

pace as yields rise owing to tighter liquidity, the 21st Century Business Herald

reported Thursday. To date this year 826 companies have bought a total of

CNY742.98 billion in WMPs. Factors such as excess capital resulting from

overcapacity are contributing to the growth in WMP purchases. If this momentum

continues more capital will head for the financial sector and make it difficult

to find funding for the real economy, the report said. (21st Century Business

Herald)

     Outbound investments by real-estate companies has fallen 82% year over year

to date this year as regulators started tightening supervision late last year,

the China Securities Journal reported Thursday. Outbound nonfinancial direct

investment fell 45.8% to $48.19 billion in the first half, according to Ministry

of Commerce data. Investment in hotels, entertainment and sports fell, too,

while small investments in manufacturing, business services and medicine

increased, the report said. (China Securities Journal)

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

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