China Needs Proactive Policies To Stabilize Market: Newspaper

China should urgently introduce policies to stabilize market expectations and increase control over cross-border capital flow, the Securities Times said in a front-page editorial. The spread between 10-year China and U.S. treasury yields have rapidly narrowed to 31 bps, below the 40-bps "comfort zone," as the market expects more rate hikes by the Federal Reserve to control inflation, pressuring the yuan and causing capital outflow, the newspaper said. China should nonetheless stick to its own policies and introduce a loosening monetary environment to promote economic growth, it said. Foreign holdings of Chinese stocks and bonds are limited and not enough to impact the overall market, it said.