MNI: China Press Digest, Feb 26: Property, PPPs, Zombie Coms

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

Monday:

     China's property control policies will be tightened in Tier-3 and Tier-4

cities to curb overheating of the property market, reported Economic Information

Daily on Monday. The 70-city housing price data released on Saturday shows it's

likely that housing prices in key lower-tiered cities will increase, as prices

in lower-tiered cities slightly increased in January due to less strict

controls. Recently, Zibo City of Shandong Province and Datong City of Shanxi

Province issued new property policies, signaling the tightening of controls in

lower-tiered cities.

***COMMENTS: The market performance of Tier-3 and Tier-4 cities, which buoyed

property sales last year due to their looser regulation compared with Tier-1 and

Tier-2 cities, will have significant effects on China's property market this

year. If tighter regulations are created in these lower-tiered cities, we will

have an idea of the extent to which the Chinese government is determined to curb

a property bubble.  

     Some cities and provinces will be creating regulation to curb the misuse of

public-private partnerships, according to Securities Daily's report on Monday.

The city of Beijing, provinces such as as Jilin and Gansu, and Ningxia

Autonomous Region will create measures to regulate the operations of PPPs and

prevent local governments from borrowing under the guise of PPPs. Hunan Province

earlier this month announced a new policy to manage PPP projects through a

'negative list', which will list what local governments cannot do through PPP

projects - the first such policy of its kind. 

***COMMENTS: As Hunan becomes the first province to issue a negative list, more

local governments are expected to follow. China has seen robust growth of PPP

projects, which are sometimes illegally used by local governments as financing

tools for projects which have been deemed inefficient. Experts predict that

tighter regulations will be set. 

     To better reduce the size of China's zombie companies, more detailed

regulation needs to be created, reported the official People's Daily on Monday.

Local policymakers and financial institutions which deal with zombie companies'

debt are awaiting more detailed regulation. The government will let the market

decide how to dispose of companies that use too much energy and produce too much

pollution. It will also support companies that are in line with industries that

improve national security, as well as other sectors that the Chinese government

has vowed to develop. 

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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