MNI China Press Digest Aug 1: Fiscal Pol, Mon Pol, Politburo

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

Wednesday:

     China's economy is slowing as indicated by a lower PMI growth m/m in July,

which signaled weaker domestic demand and greater external markets, China

Securities Journal reported. China should implement more active fiscal policy,

including issuing more government bonds to boost infrastructure investment in

the second half of the year, the newspaper said, citing Ming Ming, chief analyst

of Citic Securities. More active fiscal policy should optimize allocation of

resources and increase high-quality supply to adjust the structural imbalance

and vitalize the economy with the market's force, the newspaper said citing Liu

Shangxi, director of Chinese Academy of Fiscal Sciences.

     China's monetary policy should maintain a high degree of independence as

domestic demand has taken a dominant role, said Lian Ping, chief economist of

Communications Bank, in a commentary on China's Securities Journal. The PBOC

should be more forward-looking and adjust monetary policy to individual cases to

maintain overall stability, Lian added. More proactive fiscal policy should

undertake the goal of expanding domestic demand in the next step, Lian said,

according to the newspaper. One or two more targeted cuts to required reserve

ratio by the end of the year would be desirable to increase available funds for

banks, Lian noted, according to the newspaper.

     Stability is the main objective for China's economy in the second half,

Xinhua News Agency reported, citing c comments  by Wangjun, chief economist of

Zhongyuan Bank, on the Politburo meeting yesterday. China should strengthen the

coordination of macro policies to work mutually and accurately to echo the

Politburo's call for "more forward-looking and flexible policy," Xinhua said,

citing Zhang Yansheng, chief analyst of China Center for International Economic

Exchanges (CCIEE). The real economy demands both prudent and sufficient

liquidity and a more efficient transmission mechanism of funds to ensure

financing and prevent risks, Xinhua said, citing commentators including Zeng

Gang, a senior researcher at Chinese Academy of Social Science.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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