MNI China Press Digest, April 12: RRR Cut, Economy, Housing

     BEIJING (MNI) - The following lists highlights from China press reports on

Friday:

     The PBOC may consider lowering the reserve requirement ratio to fill the

liquidity gap, according to a report in the Securities Daily. The newspaper

cited Xu Hongcai, the deputy chief economist at government backed think tank the

China Center for International Economic Exchanges, who said the growth of M2 is

still lower than that of nominal GDP, while M1 growth has been lingering at a

low level of close to 1%. This indicates a liquidity gap and requires a RRR cut,

Xu said.

     The Chinese economy is expected to stabilize in Q2 as stimulus policies

start to take effect, the Economic Information Daily has reported. The newspaper

cited Sheng Songcheng, a former director of the Survey and Statistics Department

of the PBOC, who said he did not see a dramatic deceleration in levels of

investment, retail sales and exports this year. Sheng said trade tensions and

financial risks were expected to ease, and private enterprises would continue to

gain from policy support and structural economic reform.

     Local governments should make efforts to prevent the fluctuation of home

prices and crack down on housing speculators, while relaxing the "hukou"

household registration system, according to a commentary in the People's Daily

today. China aims to move rural residents to cities by offering them urban

"hukous", measures which are designed to boost the economy although some were

concerned this would concentrate the population and push up housing prices, the

newspaper said.

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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