MNI China Press Digest, Dec 6: Yuan, Monetary Policy, Housing

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

on Friday:

     The Chinese yuan is expected to trade in the range of 7.00 to 7.10 against

the U.S. dollar in December as it is supported by countercyclical policies to

meet domestic growth targets, the China Securities Journal reports citing HY

Investment. The Journal says the yuan is likely to gradually appreciate next

year, given improved market sentiment and economic fundamentals, and with the

interest rate spread between China and the U.S. 10-year government bonds may

remain high in the short-term as both countries are cautious about monetary

easing, the newspaper said citing Ping An Securities.

     The PBOC should balance monetary policy targets of stable growth,

structural reforms and risk prevention so as to avoid economic fluctuations,

according to an article in the China Securities Journal. Guan Tao, a former

official at the State Administration of Foreign Exchange, wrote that the PBOC

should also increase countercyclical adjustments and resolve the risks in the

reform process instead of adopting zero interest rates or quantitative easing.

     Market sentiment in China has exaggerated the difficulty of financing for

real estate developers, Securities Daily reports. Citing Zhang Dawei, chief

analyst at Centaline Property, the Daily says that despite tight regulations,

developers are still able to borrow offshore funds at stable cost. Zhang said

dollar bonds issued by developers will hit a historic high this year, with over

$65 billion issued in the first 11 months, an increase of 50% on the same period

last year. Quota limits, however, limit dollar bonds as a major source of

developers' funds, Zhang said.

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

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

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