China Press Digest: Tuesday, September 19

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

Tuesday, Sept. 19:

     China's financial system can avoid "grey rhinos" because of the country's

high savings ratio, effective supply-side changes and the influence of the

government, the Economic Information Daily said Tuesday in a front-page

commentary. "Grey rhinos" are large probability risks with wide effects --

particularly debt and shadow-banking risks in China's financial system, the

commentary said. China should enhance the coordination of the real economy and

financial sector, strengthen financial regulations and shift the focus of these

according to situational changes, it said. Two new risks are emerging: the

regulation of local-government funding vehicles has slowed the growth of

infrastructure investment and production restrictions have increased upstream

prices, it said. (Economic Information Daily)

     It is time for China authorities to study and build yuan pricing mechanisms

and market rules for commodities trade, Pan Hongsheng, deputy secretary of the

monetary policy committee at the People's Bank of China, said Monday at a forum

at Hangzhou, the Shanghai Securities News reported Tuesday. Commercial banks

should provide effective financial products to deal with exchange-rate risks in

a bid to meet the needs of commodities trade priced in yuan, Pan said. China

will continue to encourage use of the yuan in cross-border trade and investment,

push the convertibility of the capital account at a proper pace and optimize the

yuan formation mechanism, Pan said. (Shanghai Securities News)

     China companies accelerated foreign-exchange sales to stop losses as the

yuan has appreciated at a fast pace in the past month and stricter

foreign-investment controls have reduced their need to hold U.S. dollars, the

21st Century Business Herald reported Tuesday. China companies have started

selling dollar assets because of concerns over U.S. stock market valuations and

as the Donald Trump administration continues to encounter delays in implementing

its economic policies, the report said. Forex sales have also been attributed to

underestimation of "counter-cyclical" factors on the yuan exchange rate, it

said. (21st Century Business Herald)

     The crackdown on Bitcoin is to prevent risks and maintain the security and

stability of China's financial system, the Financial News, a journal run by the

People's Bank of China, said Tuesday. Virtual currencies, including Bitcoin,

challenge the currency issuance rights of sovereign nations, it said.

Denationalizing the issuance of currency is impossible. Virtual currencies are

becoming tools for money laundering, drug trafficking, smuggling and illegal

fund-raising, the commentary said. China is studying its own sovereign digital

currency. (Financial News)

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

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