MNI China Press Digest, Dec 19:Special Bond, RMB

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

on Thursday:

     Local Government Special Purpose Bonds will be issued in the first half of

January, reports 21st Century Business Herald citing anonymous sources. The

Herald also quotes Hua Changchun, Chief Economist with Guotai Junan Securities,

who says the People's Bank of China needs to lower the deposit-reserve ratio to

hedge the impact of the issuance on liquidity.

     The psychological threshold of the exchange rate at 7 yuan to the US dollar

has been removed this year, China Securities Journal said in a commentary. The

market had regarded "USD1 to RMB7" as a symbolic threshold, according to the

Journal, but the facts showed that capital outflows had not been triggered after

the RMB fell below that rate. The RMB "crisis theory" and the "out-of-control

theory" have been proved false in 2019, the Journal added.

     China's annual CPI gain is expected to be within the target range of around

3% as hog production gradually recovers, according to the National Development

and Reform Commission. Securities Daily cited comments from the Commission,

reporting that the number of live pigs was growing 2% m/m for the first time

since November 2018. CPI may rise above trend next year, the Commission said,

boosted by increased demand during the Chinese New Year Period. China's CPI grew

by 4.5% y/y in November, higher than October's 3.8%.

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

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

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