MNI China Press Digest, August 3: Forex, Domestic Market, Bond

The following lists highlights from Chinese press reports on Monday:

China's forex regulator said it will explore changes to the cross-border flow of private equity capital and push for the wider opening-up of the financial markets, according to a statement posted on the website of the State Administration of Foreign Exchange. SAFE will also enhance efforts to prevent financial risks, including the increased monitoring of capital flows and action against money laundering, the statement said. SAFE had prudently and steadily managed its forex reserves in H1 and ensured the country's forex reserves stayed above USD3 trillion.

China's economic priority in the second half of 2020 is to establish a developing model which emphasises domestic market advantages to deal with increasing uncertainties brought by the outbreak of COVID-19, the People's Daily reported citing Li Jiangtao, a faculty member of the Party School of the CPC central Committee. In an article on H2 priorities, the Daily's report said China should further enhance policies to draw foreign investments and provide financial supportsequally to foreign and domestic firms, the Daily reported citing Tu Xinquan, the head of the WTO Research Institute. China is still a preferred investment destination despite the short term operational difficulties created by the pandemic, Tu said.

China's local government authorities are expected to sell 1.6 trillion bonds in August and September after a drop in June and July, according to Shanghai Securities News. Citing an estimate by Ming Ming, deputy head of research department at Citic Securities, the report said the fall was due to the issuance of special China government bonds totalling CNY1 trillion and the PBOC had provided ample liquidity for banks to buy the bonds and ensure the stability of the bond market. Ming estimated that local government bond issuance in June would comprise 4.5% of full year issuance.