MNI China Press Digest Feb 28: Yuan, GDP, PBOC Bond Regulation

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

Wednesday:

     The strength of the Chinese currency yuan will be more decided by the

improvement of China's economy and less on the strength of the dollar, China

Securities Journal said in a commentary. The yuan may be allowed greater two-way

fluctuation, the Journal said. The dollar has less room to drop after losing 15%

from its recent high, although returning to the previous strength may be

difficult, the newspaper said. 

***COMMENTS: State-owned press this week reemphasized that the yuan would

maintain its two-way fluctuation and less on the desire to keep it stable. In

the short run, the yuan may be allowed to gain and its outlook will be affected

by non-dollar currencies, particularly the euro. 

     China's economic growth may be above 6.5% this year and next year,

according to a forecast by Xiamen University and Economic Information Daily. A

slowdown cannot be ignored, especially considering falling domestic demand,

Daily said. Deleveraging financial and non-financial institutions and increasing

risk controls remain at the core of government policies.

***COMMENTS: At the annual National People's Congress starting next week, the

government is expected to announce its growth targets this year. 

     PBOC on Tuesday announced new regulation on bonds which listed details

regarding payment and compensation in specific cases, according to Financial

News. This should boost banks' ability to absorb risks and protect investors'

interest, Financial News said. These bonds can be written down or swapped for

equity, it said. The central bank stressed that banks should reasonably and

prudently make plans for the issuance of such bonds, and ensure that funds

raised are used to serve the real economy, the newspaper said.

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

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

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

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