China Press Digest: Thursday, September 14

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

Thursday, Sept. 14:

     China plans to sell $2 billion in bonds in September -- its first sale of

U.S.-dollar sovereign bonds in more than a decade, The Wall Street Journal

reported Thursday. After being absent from the international bond market since

2004 the sale is a move by the China government to improve its standing with

international investors and draw interest to its bond market after the

government's tightening of capital outflows hurt credibility. The WSJ said most

buyers were expected to be domestic China investors and institutions and, if the

sale was successful, it would signal investors were confident in China's

economic growth and creditworthiness. (The Wall Street Journal)

     U.S. President Donald Trump has rejected a U.S. chipmaker's deal with a

China government-backed company because of national security concerns, The Wall

Street Journal reported Thursday. Lattice, a chip company whose products are

used by the American government, was in discussions with Canyon Bridge as part

of China's repeated attempts to invest in the semiconductor industry. The deal's

failure signals continuing conflicts in the U.S.-China battle over chip

technology and foreign direct investment, the newspaper said. The Wall Street

Journal quoted the Global Times, a China government mouthpiece, saying a

rejection of the deal by Trump "may further intensify the tensions surrounding

Sino-U.S. trade relations" and China may take retaliatory measures against U.S.

businesses in China. (The Wall Street Journal)

     The China National Development and Reform Commission and the Ministry of

Commerce are jointly compiling a list of companies with previous irrational and

aggressive investment behavior, the China Daily reported Tuesday quoting an

unidentified commission senior official. It aims to ensure the authenticity of

China companies' outbound direct investment. The list will be published as early

as next month, according to the official. As another government measure to curb

irrational and aggressive investment by China companies overseas the list won't

necessarily automatically ban all named companies from investing abroad but will

impose more state supervision and inspection of their activities, the commission

official said. (China Daily)

     The People's Bank of China is unlikely to reduce the required reserve ratio

based on current conditions even though there have been calls for a RRR cut, the

China Securities Journal reported Thursday. The latest RRR-cut discussions were

sparked by recent yuan appreciation -- which reflects long-term concerns over a

relatively low excess RRR and tight liquidity. But many experts don't think the

exchange rate is the only factor affecting monetary policy, the newspaper said.

Because the main goals of monetary policy are stabilizing economic growth,

preventing inflation and deleveraging, short-term yuan appreciation may not be

the reason for a RRR cut -- not to mention depreciation pressure on the yuan

hasn't been fully removed. Therefore, it isn't likely that the PBOC will drop

the RRR this year. Monetary policy will remain prudent and neutral, it said.

(China Securities Journal)

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

--MNI Singapore Bureau; +65 9023-5864; email: glen.perkinson@marketnews.com

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