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China Press Digest: Thursday, Nov. 2

     BEIJING (MNI) - The following are highlights from the China press for
Thursday, Nov. 2
     Reform of the regulatory system is the top priority for deepening financial
reform, so coordination of financial regulation needs to be enhanced, the
Financial News, a journal run by the People's Bank of China, said in the front
page commentary on Thursday. Problems in the financial sector, including debt
defaults, non-performing asset risks, property bubbles as well as local
government debt risks, have been caused in part by insufficient and
uncoordinated regulation, the commentary argued. Regulators need to crack down
further on financial problems and clean up the market environment, the
commentary said. (Financial News)
     Asset-backed securitization (ABS) has become a focus for banks since
interbank transactions have shrunk due to stricter regulation, Caixin reported
Thursday. Non-performing asset-backed securities are preferred by medium and
small banks to help them meet the capital adequacy ratio (CAR) requirement for
their macro-prudential assessment (MPA) by the People's Bank of China, the
report said. Banks can reuse their inventory of assets via ABS issues and also
invest in various assets in the market, the report noted. (Caixin)
     Property companies are expected to suffer more serious funding difficulties
in the fourth quarter as regulators continue to curb their funding channels, the
Economic Information Daily reported Thursday. As banks loans to the property
sector have been restricted, the companies have turned to entrusted capital,
which has higher costs, the report said. Considering regulation will tighten
further, banks have used up most of their credit quotas and property sales have
been sluggish, property companies face a "cold winter" for the rest of this
year, the report warned. (Economic Information Daily)
     Chinese authorities are mulling measures involving tax policy, financial
support and pricing systems to tighten regulation of public-private partnership
projects (PPP), the Shanghai Securities News reported Thursday. Since 2014, PPPs
have expanded rapidly to a volume of over CNY1 trillion, but the expansion
includes invisible risks, particularly when PPPs are used as vehicles for local
government borrowing, the report warned. These unqualified projects will be
stricken from the approved PPP list compiled by the Ministry of Finance, the
report said, citing officials of the Ministry. (Shanghai Securities News)
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
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