China Press Digest: Wednesday, Oct. 11

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

Wednesday, Oct. 11:

     Foreign investment in the Chinese financial market is warming up as yuan

depreciation expectations have faded, the 21st Century Business Herald reported

Wednesday. Net investment flowing into mainland China from Hong Kong through the

Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect

totaled CNY7.68 billion on Monday, a record. The announcement of a targeted

reserve requirement ratio cut by the People's Bank of China and a jump in the

official manufacturing PMI also boosted foreign investor interest. As of the end

of August, foreign investors had put a total of CNY857.36 billion into the

Chinese bond market, a CNY15.9-billion increase from the end of July, as the

yuan rose 2% against the dollar in August. (21st Century Business Herald)

     Reform related to the mixed ownership of state-owned enterprises has

reached a critical stage and is expected to make a breakthrough in the fourth

quarter this year, the China Securities Journal reported Wednesday. The previous

two rounds of SOE reform made progress in sectors including electric power,

petroleum, railways and military manufacturing, and a new round is being

prepared. Some provinces have set up special funds to support the new SOE

reform, which could attract trillions of yuan in private capital, the newspaper

said. The funds should also attract foreign capital, the report suggested.

(China Securities Journal)

     China's real estate industry is becoming more concentrated because of

strict government controls, the Financial News, a journal run the People's Bank

of China, reported Wednesday. In the first week of October, property market

sales volume in 33 main cities dropped 63% from a year earlier, the report said.

However, the performance of leading companies was unexpectedly good and they are

still expanding despite tight liquidity and heavy restrictions, the newspaper

noted. The sales volume for big real estate companies saw a large increase in

the first three quarters of the year due to low inventories, it added.

(Financial News) 

     Production and prices of coal and steel in China have risen to record highs

as China's campaign to eliminate excess production capacity has continued, the

Economic Information Daily reported Wednesday. According to the National

Development and Reform Commission, China is cutting 50 million tons of

overcapacity in the steel industry and banning the production of low-quality

steel, which is the main reason for the robust performance of the steel market,

the newspaper said. As of the end of July, the coal industry had cut as much as

128 million tons of overcapacity, and supply and demand in the coal market had

essentially reached a balance, the newspaper said. (Economic Information 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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