China Press Digest: Tuesday, August 22

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

Aug. 22:

     Total trust loans expanded in the first half of the year to their largest

volume in seven years as transactions using multiple funding channels rebounded

and a large amount of capital from insurance was invested in non-standard

assets, the China Securities Journal reported Tuesday. According to data from

the People's Bank of China, trust loans increased by CNY1.31 trillion in the

first half of this year, more than four times the CNY279.2 billion in the same

period last year, the report said. Banks' wealth management funds are the

biggest source of capital for trust loans, while real estate companies are the

main borrowers of trust loans, the report said. But the rising momentum of trust

loans will not continue because authorities are increasingly focused on such

activities and will further tighten regulations, the report argued. (China

Securities Journal)

     Crude steel output reached its highest level in years in July as mills

increased production because of rising prices, the Securities Daily reported

Tuesday. Statistics from the China Iron and Steel Association, an industrial

organization, showed that output grew 10.27% to 6.89 million tons, the highest

in recent years. Steel prices continue to rise with the reduction of production

overcapacity. But as environmental regulations are tightened, some regions will

take measures to limit output, so the rapid growth will not last long, the

report argued. (Securities Daily)

     A sudden surge in commodities prices, including for coal and nonferrous

metals, is being driven by speculation and unrealistic expectations of price

increases, the Economic Information Daily reported Tuesday, citing analysts.

Economic fundamentals do not support a rapid rise in commodity prices,

particularly given the current balance of supply and demand. The so-called "new

cycle" of commodities ignores the actual level of commodities prices and runs

counter regulatory policies, the report noted. The China Securities Regulatory

Commission has said it will enhance regulation and curb speculation. (Economic

Information Daily)

     China will accelerate the restructuring of state-owned enterprises (SOEs),

starting with those run by the central government, the People's Daily said in a

front-page commentary on Tuesday. The number of SOEs run by the central

government has fallen to 99 this year from 117 in 2012 because of the reform

campaign. The country will push forward with SOE restructuring in sectors

including coal power, steel and heavy equipment manufacturing, particularly

their overseas assets. The move will strengthen the coordination of the SOEs and

enhance the integration of resources, the commentary added. (People's Daily)

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@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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