MNI China Press Digest, Aug 27: Infra Invest; Local Govt Bonds

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

Monday:

     Various Chinese provinces are expected to announce new infrastructure

investment lists, 21st Century Business Herald reported. The total investment of

the announced development projects of western provinces, including railway

construction and water diversion projects, will reach USD500 billion, noted the

Herald. Civil aviation and other projects into which the government encourages

private capital investment will see roughly another USD500 billion investment,

noted the paper. How local governments and private companies can speed up reform

and attract capital will be key for these infrastructure investment projects,

the paper commented.

     The Chinese government will adjust its monetary policies and OMO operations

to ensure local government bonds are issued successfully, China Securities

Journal reported. On Friday, the PBOC injected MLF into the market for the

purpose of coordinating monetary policy and fiscal policy. In the coming weeks,

the PBOC may further conduct OMO injections to provide enough liquidity for

banks which are majority entities to buy local government bonds, the newspaper

said. 

**COMMENTS: The increase of local government bond issuance aims to support

infrastructure investment, thus buoying economic growth. For this purpose, the

PBOC will need to adjust OMO actions and its monetary policy to balance

liquidity in the market while large amounts of local government bonds are

issued.

     China will require local governments to balance cash handouts with building

houses through shantytown renovation projects, which boosts property investment

growth, the official People's Daily reported. In the first half of 2018, China

finished rebuilding 3.63 million urban slums -- 62.5% of the target to rebuild

5.8 million urban slums this year, the newspaper said. The State Council plans

to advance the renewals of another 15 million houses from 2018 to 2020, the

report said. The country's property regulator requires local governments to give

cash, where the local property market has excess property inventory, and also

requires them to rebuild houses where the property market is already hot and

housing prices are rising, the newspaper said.

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

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

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