MNI China Press Digest, Dec 28: Deficit, Sino-U.S., Liquidity

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

Friday:

     China should not raise its deficit to more than 3% of its GDP next year,

the National Business Daily reported today citing Feng Qiaobin, a professor at

the Chinese Academy of Governance. Other proactive fiscal policy, including

increasing budget expenditure, issuing more debt and reducing taxes, are also

effective, Feng was cited saying. Keeping the rate below 3% can send a signal to

local governments, reminding them to control the investment and financing

expansion, and especially to strictly control the increase of debt, the Daily

said citing Feng.

     China is more at ease dealing with the trade war waged by the U.S.; it has

decided to focus on deepening reform and opening up, instead of "being all-in to

fight against the U.S." the Global Times said in an editorial on Thursday.

Though the trade war and the U.S. attacks on Huawei and ZTE have raised China's

concern about the external pressure, no external force can bring China down and

those who try will pay a heavy price, the newspaper warned.

     The additional liquidity released by the PBOC has basically kicked into the

real economy while money and credit have grown steadily for the second half,

said Financial News, a newspaper run by the central bank today. The rate on

bonds has dropped significantly, while the lending rate has steadily declined,

which also shows that the liquidity is taking effect, the newspaper said.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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