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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