MNI China Press Digest Dec 17: Yuan, SOE Defaults, Australia

The following lists highlights from Chinese press reports on Thursday:

The yuan may be on a continuing phase of appreciation against the dollar given China's strong exports and monetary policies, the China Securities Journal reported citing analysts. The yuan continues to derive support from the stronger economy while the dollar index has weakened since Dec. 9, the Journal said. The PBOC's recent MLF operations and peripheral adjustments may slow but not reverse the overall rising trend, the report said.

The number of defaults on SOE-issued bonds may rise as the government encourages market-based solutions for troubled companies, the Securities Daily reported citing Li Chang, an analyst from S&P Global Ratings. The widening spreads on new bonds issued by SOEs could raise the financing costs for weaker SOEs, who could potentially default amid a period of tightening monetary policy, Li said.

Australia should treat its WTO complaint on China's barley tariffs as a real trade dispute rather than politicizing the issue and planning a counterattack on China through the iron ore trade, the Global Times said in an editorial. Australia has been destroying its relations with China to show its loyalty and commitment to its alliance with the U.S., but China is confident it can disregard relations with Australia and win the barley dispute at the WTO, the newspaper said.