MNI: China Press Digest, Friday, January 19

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

Friday, January 19:  

     The yuan may trade as strong as 6.2 against the U.S. dollar in the first

half of 2018 after possibly hitting 6.4 in the near term, Shanghai Securities

Journal reported on Friday, citing Li Liuyang, chief FX analyst at the financial

market department of China Merchants Bank. 

- The yuan closed 6.4244 on Thursday, according to official data. 

- Chinese regulators are more tolerant on yuan's gain  

- Benchmark on the yuan should be gauged by the basket of currencies and not

just movement against the dollar. If the currency basket is stable, then the

yuan's gain against the dollar may be deemed reasonable: Li. 

***TAKEAWAY: The yuan may further gain against the U.S. dollar, and market

participants expect regulators to refrain from intervening.

     China's GDP may slow to 6.7% in 2018 from 6.9% in 2017 as fixed-asset

investments cool, Economic Information Daily reported, citing forecasts by the

government-owned China Academy of Social Sciences. 

- Consumption, investments and net exports may contribute to 4.5, 2.0 and 0.2

percentage points of the 6.7% growth respectively 

- FAI may grow by 6.4% 

- 0.8 percentage point lower than in 2017 - CPI 1.9% and PPI 4.2%.

     Insurance companies must be prevented from illegally funding projects of

local governments, China's finance ministry and insurance regulator said in a

joint statement on Thursday. 

- Local governments should examine their debt structures, and control and tackle

risks regarding existing investments with insurance companies 

- Insurance companies should fully assess the ability of local government

financing vehicles (LGFV) to repay debt. 

***TAKEAWAY: Local government debt is a key focus for China. The rapid growth of

insurance companies are drawing more regulatory scrutiny.

     Active mediation efforts are better for achieving the denuclearization of

the Korean peninsula than further sanctions, People's Daily commented on Friday.

- The two Koreas agreeing to march together at the winter Olympics signaled

easing of tensions 

- A conference held by the U.S. and Canada to discuss further pressure on North

Korea will only damage mediating efforts by other countries: People's Daily.

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

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