MNI China Press Digest: Friday, Dec. 22

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

Friday, Dec. 22:

     China next year will mainly focus on proactive fiscal policy, tight

monetary policy and strengthened supervision, the Economic Information Daily, a

newspaper of the official Xinhua News Agency, reported Friday. In a front-page

analysis of this week's Central Economic Work Conference, the newspaper said

that the main theme of maintaining stability while also advancing the economy

was consistent with policy of the past five years. However, China will change

the pace and strength of macro-control, and strengthen coordination between

financial regulators. The conference emphasized keeping a proactive fiscal

policy, meaning that China's fiscal deficit goal could be set at around 3%. The

meeting released signals that more bonds for special projects would be issued,

mainly for environmental protection and poverty reduction programs, which would

support infrastructure investment. Local government debt will be reined in, the

article said. The newspaper predicted that although monetary policy changes in

Europe and the United States could affect China's policy, the country will not

raise the benchmark interest rate because it is more concerned with domestic

factors. (Economic Information Daily)

     The People's Bank of China will work to implement a prudent and neutral

monetary policy, and maintain reasonable growth of credit and social financing,

the Financial News, a newspaper of the central bank, reported Friday. The PBOC

will also help create a higher-quality economy for China, the central bank said

in a statement after a meeting Thursday led by Zhou Xiaochuan, the bank's

governor. The meeting was organized to analyze conclusions from the Central

Economic Work Conference, held earlier in the week. Subjects included risk

controls and forestalling systemic financial risks. The PBOC said it would

advance financial reforms and further open up the financial sector, while also

promoting green development. (Financial News)

     Tight controls continue to weigh on the property sector, with hundreds of

failed land auctions in the last six months, the Securities Daily reported

Friday. According to data from the Centaline Real Estate Research Center,

auctions of at least 261 parcels had failed so far in the second half of this

year, with 111 in Tier-2 cities and 150 in the smaller Tier-3 and Tier-4 cities.

The failures were mainly because of a lack of bidders or because bidders'

offered prices were too low. The property market is cooling down and there are

tight controls on capital flowing into the sector, so property developers have

become less enthusiastic about acquiring land, analysts said. As the sector is

expected to further cool further and developers' financing costs are expected to

keep going up, land auction failures will most likely also increase, especially

in Tier-3 and Tier-4 cities, where economic fundamentals are less favorable, the

newspaper argued. (Securities Daily)

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

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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]