MNI China Press Digest, Dec 11: Growth, Liquidity, Inflation

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

on Wednesday:

     China's target to stabilize growth does not mean keeping GDP growth above

6%, according to an article in the Beijing News. The newspaper published an

article by Guan Tao, a former official at the State Administration of Foreign

Exchange, who said the Chinese government sees no need to overreact on policy

amid the current downturn, as long as employment is sustainable and incomes

continue to rise. Guan said China should stablise growth through reform, not

through short term policy stimulus.

     Weak demand for lending means the PBOC is unlikely to rapidly increase

liquidity to boost the M2 supply, according to an article in Securities Daily.

Citing analysis from the Bank of Communications, the Daily's report says any

monetary policy easing will be limited by the rising CPI. The PBOC may use

quantitative tools in December to fill in the liquidity gap due to the early

issuance of next year's local government special purpose bonds, the newspaper

said.

     China's CPI is likely to decrease in Q2 of next year largely due to the

stabilisation of pork prices, according to Shanghai Securities News. Citing Lian

Ping, Chief Economist with the Bank of Communications, the report says that

recent measures to control pork prices have had an impact and the upward price

pressure has decreased. This in turn would relieve upward pressure on CPI, Lian

said.

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,MI$$$$]