MNI China Press Digest April 26: Monetary Policy; ABS; Tax Cut

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

Thursday:

     In the new international and domestic environment, China's financial

policies will continue to focus on strong regulation and risk prevention, and

economic policies will set high standards for the new economy and replace old

growth engines with new ones, the Economic Information Daily said. Increasing

domestic demands mentioned in the recent Politburo meeting will not stimulate

infrastructure investment and property investment as they did in the past, the

report said. Infrastructure investment will grow steadily as a counter-cyclical

stabiliser, and will not see its growth fall sharply, the report also noted.

     China Securities Regulatory Commission and the Ministry of Housing and

Urban-Rural Development published on Wednesday the first document supporting

house-leasing asset-backed securities (ABS) since the promotion of leasing

market development was first proposed, Shanghai Securities News reported. The

government will encourage house-leasing companies to issue ABS backed by leasing

properties, and will experiment on issuing real-estate investment trusts, the

report said. However, leasing properties as underlying assets will not generate

acceptable yields for ABS unless the government also lowers land prices and

taxes as it raises rent, noted the report, citing Ouyang Jie, the senior vice

president at Future Land, a Shanghai-based property developer.

     Seven new tax-cutting measures to support new businesses, innovation, and

the development of micro-sized and small companies were announced during the

executive meetings of the State Council on Wednesday, held by Premier Li

Keqiang, reported China Securities Journal. These seven measures will save more

than CNY60 billion for companies this year, the report said. The meeting also

emphasised that regulators will include inclusive finance in bank tests to

ensure that companies see their funding costs fall, and the government will try

to significantly cut the funding costs of micro-sized and small companies before

the end of third quarter, the report said.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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