China Press Digest: Tuesday, November 7

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

Tuesday, November 7:

     China needs to deepen reform of and further open its financial sector to

promote internationalization the yuan, China Banking Regulatory Commission chief

economist Ba Shusong wrote in a long article published Tuesday by the Financial

News, a newspaper supervised by the People's Bank of China. Restrictions on

securities investment and capital outflows should be reduced, he said, while a

new index measuring macro-economic fundamentals should be considered and

introduced into the pricing of the yuan central parity. He also proposed further

expanding the Chinese financial market's connections with overseas markets to

provide higher-quality risk pricing platforms and enhance the yuan's function as

an investment currency. New types of investment instruments should be introduced

for foreign investors, such as new commodity, stock and currency derivatives and

other risk management tools, he noted. Ba stressed the restrictions on foreign

investment entering China's financial market need to be reduced so that more

foreign competition can boost the efficiency of Chinese financial institutions.

     China should institute a property tax but the introduction should be

gradual so as not to cause too great a shock to the market, the Financial News,

a newspaper managed by the People's Bank of China, said in a commentary Tuesday.

The newspaper noted Chinese Finance Minister Xiao Jie's comments that the

government must analyze and interpret President Xi Jinping's 19th Communist

Party Congress Report that the creation and implementation of a property tax

should be advanced based on the principle of "create the law first, fully

authorize power to related regulators, and advance step by step." Xiao said

China should tax commercial and residential property units based on their value,

but at the same time reduce taxes on property construction and sales

transactions to create a modern property tax system. (Financial News)

     A further tightening of regulation to control financial risks is expected

ahead, Economic Information Daily, a newspaper under the official Xinhua News

Agency, reported Tuesday, citing unidentified experts. China would stick to its

"two-pillar macro-control framework of monetary policy and macro-prudential

policy," the experts told the newspaper, arguing financial regulators should

better coordinate their efforts to fill regulatory voids caused by new

cross-sector financial businesses. New regulations on the wealth management

sector and banks' wealth management businesses would soon be issued given the

People's Bank of China is leading relevant regulators to study and work towards

creating a standardized rule to manage the wealth management sector, the experts

said. (Economic Information Daily)

     A deepening of reform is needed so China can speed up the process of

transforming itself into an innovative economy, Ma Mingjie, the deputy head of

the innovation development research department at the Development Research

Center of the State Council, told the 21st Century Business Herald in a report

published Tuesday. The relationship between the government and the market needs

to be clear to create fair competition and let market forces perform their

decisive function. China also needs to further open up and participate in the

international innovation networks, introduce global technology and talent to

China and at the same time "go abroad" to improve innovation (21st Century

Business Herald)

--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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]