MNI China Press Digest, Feb 21: Loans, Loan Rates, Transport

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

on Friday:

     New yuan loans in China hit a single month historic high in January of

CNY3.34 trillion, according to a report in the China Securities Journal. The

Journal report cited Ming Ming, chief fixed-income analyst at CITIC Securities,

who said the lending surge reflected strong demand for credit in the real

economy. Ming said the increase was due to lower lending interest rates, ample

liquidity and increased issuance of local government bonds. Robust credit and

CNY761.3 billion of newly added government bonds pushed aggregate financing to

an unexpected CNY5.07 trillion in January, the Journal said citing analysts.

Zhao Wei, chief macro analyst at Changjiang Securities, said the growth in

aggregate finance is expected to decline in Q1 due to the disruption of the

epidemic but is likely to rise in Q2.

     The People's Bank of China is keeping a tight grip on the real estate

sector through small cuts to interest rates and is determined not to use the

sector for short term stimulus, according to the Economic Information Daily. The

Daily's report pointed to the PBOC's cuts of only 5 bps for the 5-year Loan

Prime Rate, the new key loan basis, while the 1-year LPR was cut by 10 bps.

Citing Dong Ximiao, an analyst with the National Institute of Finance and

Development, the Daily said the lowered 1-year LPR is intended be an offset to

the short-term impact of the epidemic but not a major stimulus for the real

estate sector.

     China's Ministry of Transport will make every effort to restore transport

services and strive to complete the annual target of investing CNY1.8 trillion

in highways and waterways, according to a statement on its website. The ministry

will promote the resumption of construction projects as soon as possible, and

accelerate the launch of a second batch of investment plans this year, the

statement 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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