MNI China Press Digest, Aug 20: LPR, Growth, Employment

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

on Tuesday:

     The new LPR reference rate for bank loans released by the PBOC today would

not impact on the interest rate spreads of commercial banks in the short term,

China Securities Journal reported. Citing economists, the Journal reported that

the move would, however, impact on the spread level in the long run and lead to

a gradual increase in banks' risk appetite. This would benefit the real economy

as these banks served small companies. Meanwhile, mortgage interest rates are

unlikely to go down and there would still be some upside in the short term amid

tightening housing regulations, the newspaper added.

     Economic conditions in China could deteriorate in the second half of 2019

unless policy measures are taken to stabilize the downward trend in the growth

rate, Beijing News reported. Citing Yu Yongding, former member of the central

bank's monetary policy committee, the report said the best approach was to

increase the fiscal deficit rate from the current 2.8%, while the 3% ceiling was

not necessarily appropriate.

     China should increase policy support to stabilize business and employment

with a particular focus on labour intensive industries, according to Chinese

Premier Li Keqiang. Li was speaking in a meeting on labour market stability on

Monday and his comments, reported by the China Securities Journal, also urged

the effective implementation of tax and fee cuts to offer release to private and

small companies.

--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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