MNI China Press Digest, Dec 24: Reserve Ratio, Bonds Default

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

on Thursday:

     China is considering cutting the deposit reserve ratio with the aim of

lowering real interest rates and financing costs for companies, according to

Chinese Premier Li Keqiang. Xinhua News Agency reports comments from Li, who

said China will step up support for small and medium banks which directly

service small and medium enterprises (SME), in the hope that the banks will

increase lending to SMEs.

     China needs to perfect its bond default mechanisms and promote market

clearing, according to Liu Guoqiang, the Deputy Governor of the People's Bank of

China. China Securities Journal reports comments from Liu, who said China should

optimize its financing structures and increase the proportion of direct

financing, including bonds.

     Sixty-eight Chinese companies defaulted on 176 bonds in 2019 totalling a

record of RMB101 billion, according to the 21st Century Business Herald. Citing

Zhang Xu, an analyst with Everbright Securities, the Herald's report says that

since the central bank seized Baoshang Bank this summer, the market has been

concerned by bonds issued by financing platforms operated by local governments.

The issuance of 369 bonds has been postponed this year, the newspaper said.

--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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