China Press Digest: Thursday, September 28

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

Thursday, September  28:

     As the week-long National Day holiday approaches, liquidity seems to be

tightening, with treasury bond repurchase rates rising rapidly, the 21st Century

Business Herald reported Thursday. Analysts told the newspaper the rise in

yields was partly due to seasonal factors. Banks face the PBOC's

Macro-Prudential Assessment at the end of September, so they have dressed up

their books by reducing their financing to non-bank institutions, which has

caused repurchase costs to edge up. Additionally, given the recent slowdown seen

in China's economic data as well as the imposition of stricter government

controls on the property sector, the market is more optimistic about the bond

market outlook, increasing the demand from non-bank financial institutions for

financing as they boost their bond investments add leverage, analysts told the

newspaper. (21st Century Business Herald)

     Local government debt issuance this year reached CNY3.53 trillion as of

September 27, the China Securities Journal reported Thursday. According to a

report by China International Capital Corporation, around CNY4.88 trillion in

local government debt is expected to be issued this year, so CNY1.3 trillion

remains to be issued the rest of the year, or around CNY450 billion on average

every month, according to the newspaper. As a large amount of local government

debt swaps have been issued in the past three years and only CNY1 trillion to

CNY1.5 trillion such swaps are left for 2018, debt pressure on local governments

will be reduced. (China Securities Journal)

     China's net revenue from goods and service trade stood at $17.1 billion in

August, resulted from revenue of $206.5 billion and spending of $189.4 billion,

the Safe Administration of Foreign Exchange announced Wednesday. For goods trade

alone, revenues were $188.7 billion while expenses were $147 billion, leading to

a surplus of $41.7 billion. Service trade reported a net revenue deficit of

$24.6 billion, on revenues of $17.8 billion and expenses of $42.4 billion.

     China's banking sector reported net foreign liabilities of $179.1 billion

as of the end of June, with total liabilities to overseas institutions of

$1.1485 trillion, offset by total outbound investment in financial assets of

$969.4 billion, the State Administration of Foreign Exchange said Wednesday.

Some 49%, or $478.6 billion, of Chinese banks' outbound investment in financial

assets was allocated to foreign banks, and the other 51%, or $490.8 billion, was

invested in foreign non-bank institutions.

     Under the Chinese government's campaign to encourage innovation and

entrepreneurship, financial technology (FinTech) has became an important sector

regulators want to encourage and improve, the Economic Information Daily

reported Thursday. A number of policies, from both the central and local

governments, aimed at supporting FinTech have been issued in the past 30 days,

the newspaper noted. Among other things, The policies allow FinTech companies to

use alternative collateral, such as intellectual property, to back financing.

(Economic Information Daily)

     U.S. Secretary of State Rex Tillerson will visit China on Saturday at the

request of Chinese Foreign Minister Wang Yi, according to the Ministry of

Foreign Affairs website. Tillerson and Wang will discuss Sino-U.S. relations,

U.S. President Donald Trump's visit to China later this year, and major

international and regional issues, the ministry said.

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

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

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