China Press Digest: Thursday, October 26

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

Thursday, October 26:

     China's Heilongjiang Province has become the first province to announce it

has lowered its target for coal production capacity cuts this year, the

Securities Daily reported Thursday. The target has been adjusted because the

supply of coal was insufficient to meet electricity demand necessary for stable

economic growth, given decreasing coal production in recent years. The

province's adjusted goal is to cut coal capacity by 0.76 million tons and close

five mines. The new goal is well below the previous goal to cut 2.92 million

tons by closing four mines, the newspaper said. (Securities Daily)

     The liquidity condition in the financial markets at the end of October is

expected to remain neutral, the China Securities Journal reported Thursday. The

People's Bank of China did not inject liquidity into the market via its open

market operations on Wednesday after six straight trading days of net injection.

With the central bank's support, money supply and demand in the interbank market

has been stable. Liquidity at end of this month will be mainly affected by tax

payments, but when the tax money reaches the treasury, its negative impact on

liquidity will be reduced significantly. Experts said that the tax payment

effect could lead to the central bank to inject less liquidity, and that the

tight but balanced status that the government has been stressing will be little

changed. (China Securities Journal)

     Reforms of Chinese state-owned enterprises (SOEs), especially those run by

local governments, are expected to speed up, the Economic Information Daily, a

financial newspaper under the official Xinhua News Agency, reported Thursday.

Trading of stocks of 32 local SOEs has been suspended as they prepare for

significant reorganization of their assets. Experts said that with the 19th

Party Congress's emphasis on the need to deepen SOE reforms and develop mixed

government-private ownership in the economy, the overhauls of local SOEs would

accelerate in 2018. Transforming the SOE system to mixed government-private

ownership has become a key factor in the reforms -- as of the end of 2016,

nearly 70 percent of the central government's SOEs and their subsidiaries were

owned jointly by the government and private sector firms, the newspaper said.

(Economic Information Daily)

     China has made significant progress so far this year in limiting local

government debt, the Securities Times reported Thursday. Issuance of local

government bonds fell 24.3% in September compared with August, to CNY356

billion. In the first three quarters of the year, issuance was fell to CNY3.53

trillion, down 30.5% compared to the same period last year, the newspaper said.

The success was because of tighter regulation by the Ministry of Finance, the

newspaper argued. Also helping was a big decrease in outstanding debt because of

debt swaps, and the increased cost of bond issuance. (Securities Times)

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

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

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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