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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
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