China Press Digest: Wednesday, September 13

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

Wednesday, Sept. 13:

     The U.S. House Foreign Affairs Committee is considering unilateral

sanctions against large China banks involved with North Korea, the South China

Morning Post reported Wednesday. Large China banks such as China Merchants Bank

and Agricultural Bank of China were named by committee chairman Ed Royce as

possible targets. He encouraged China banks and companies to make a choice

between doing businesses with the U.S. or North Korea. The newspaper quoted U.S.

Treasury Secretary Steve Mnuchin saying Tuesday the U.S. may impose more

sanctions on China if it doesn't follow through on new sanctions on North Korea.

(South China Morning Post)

     There has been CNY3.35 trillion in local-government debt issued this year

as of Tuesday, the China Securities Journal reported Wednesday. The effect of

local-government-debt issuance on market supply and liquidity will weaken in the

coming months, it said with about CNY1.5 trillion expected to be issued in the

second half of the year -- or about CNY430 billion every month. Therefore,

pressure to issue local-government debt will be relatively controllable. This

pressure will reduce in 2018 because the local-government-debt swap quota is

CNY1 trillion-CNY1.5 trillion. (China Securities Journal)

     As foreign-exchange demand balances the yuan may see two-way fluctuations

and the currency may also appreciate, the China Securities Journal reported

Wednesday. The yuan ended 11 consecutive days of rise Tuesday. The PBOC's

decision to remove risk provisions for currency-forward contracts reduces

companies' costs for purchasing foreign exchange and is beneficial for liquidity

stability in offshore yuan, the newspaper said quoting analysts. China

regulators may worry a stronger yuan may curb export growth because of the

yuan's rapid strengthening over the past two weeks and the PBOC's new policy, to

some degree, signals it isn't hoping for one-way strengthening of the yuan. The

yuan may fall in the short term and two-way fluctuations are likely and its

outlook depends largely on the dollar index, the report said. (China Securities

Journal)

     China's first real-estate investment trust products for individual

investors may soon be available after a long wait, the Economic Information

Daily said in a front-page report Wednesday. The China Securities Regulatory

Commission is speeding up studies and regulations and rules, the newspaper said.

REITS offered by companies with rental-housing assets are expected to be

encouraged as China tries to bolster the rental market. This will be a new era

for REITS in China. Until now it was mainly financial institutions only that had

had access to REITS. (Economic Information Daily)

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

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