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     BEIJING (MNI) - The following lists highlights from Chinese press reports
on Friday:
     Banks should not be encouraged to lower lending rates for small and
micro-sized enterprises below the benchmark interest rate according to Sina
Finance, citing Li Junfeng, director of the Financial Inclusion Department at
the China Banking and Insurance Regulatory Commission. Banks are recommended to
price their rates based on the principle of "guaranteeing the benefits" and
commercial sustainability, the newspaper said citing Li, who warned that lower
rates could lead to regulatory arbitrage. The breakeven interest rate should be
between 5% and 5.7% if the rate of non-performing loans is kept below 3%, Li
said.
     Housing prices in 23 out of 100 cities surveyed by the Shanghai E-House
Real Estate Research Institute have increased more than 20% y/y in the first
quarter, the Economic Information Daily reported. In some cities the growth of
mortgages and rises in house prices have occurred simultaneously, the Daily
said, while describing some areas of the market as "overheated". Regulations on
mortgages and land transactions could be further tightened in the second
quarter, the newspaper said citing Yan Yuejin, director of the E-House Real
Estate Research Institute.
     Current interest rates and inflation are at a low level and are beneficial
for raising funds to boost infrastructure, reported 21st Century Business Herald
citing Zhou Xiaochuan, a former governor of the PBOC. Commercial funds should
play a major role in infrastructure construction as their involvement can ensure
the sustainability of the projects and avoid moral hazard in government
investments, the newspaper said citing Zhou.
--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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