MNI China Press Digest Dec 3: Money Policy, AMC Injection

The following lists highlights from Chinese press reports on Thursday:

The PBOC should not tighten monetary policy until at least H2 next year given investment and consumption are still below expectations and companies face tight credit conditions after a string of bond defaults, said Sheng Songcheng, a former official with the central bank and now an advisor to the Shanghai government. If the PBOC quits easing, speculative international capital may accelerate the appreciation of the yuan and inflate import prices, said Sheng in a blog post.

China's five major state-owned banks are planning to inject capital into affiliated Asset Investment Companies (AIC) to satisfy regulatory needs to raise capital adequacy ratios from 2-3% to 5% this year, the Securities Times reported citing industry sources. According to the report the ratio will then increase to 6% in 2021 and 8% by 2022. The new regulatory standards will tighten banks' capital as AIC's main debt-for-equity business consumes capital, the newspaper said citing industry insiders. The current risk weight of 400% for non-public company equity and 250% for public company equity will not change, the Times report said.