MNI China Press Digest: Friday, Nov. 17

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

Friday, Nov. 17.

     The framework of macro-prudential policy needs to be improved, and its

targets should be more specific, Yin Yong, vice-governor of the People's Bank of

China, said during the annual Caixin Summit, Caixin Magazine reported Thursday.

The coordination between macro-prudential policy, monetary policy and fiscal

policy is still in a testing stage because the causes of systemic risks are

complicated, Yin argued. The central bank should play a decisive role in the

framework, including controlling money supply, stabilizing inflation and the

economy, and overcoming the limitations of regulations, Yin stressed.  (Caixin

Magazine)

     Enterprises owned by the central government (COEs) are planning to set up a

preference share system as part of joint-stock reforms, said Xiao Yaqing,

director of the State-owned Assets Supervision and Administration Commission,

the People's Daily reported Friday. As of the end of this year, he said, all

COEs will finish overhauls of their corporation structures and will bring in

more investors, with the goal of diversifying equities. There is still a long

way to go for state-owned enterprises to form effective corporate governance

structures and flexible market-oriented operations. Many COEs rely heavily on

overseas resources, which constrains their international competitiveness, Xiao

noted. (People's Daily)

     The China Securities Regulatory Commission will continue to push forward

innovation in the bond market and meet companies' requirements for issuance, Li

Chao, vice-chairman of the commission, said Thursday during the Caixin Summit,

Caixin Magazine reported. The regulator will further crack down on insider

trading and illegal behavior that manipulates the market. The CSRC will

implement policies and lift restrictions on foreign investment in the Chinese

financial sector, Li noted, adding that the opening up will move forward at an

active pace. Also, the authorities will guide the futures market to grow in a

healthier way and better serve nonfinancial companies in risk management, Li

said. (Caixin Magazine)

     The China Banking Regulatory Commission is planning to strengthen

regulation of commercial banks' equities and limit so-called blind investment in

banking institutions via financial products, the Shanghai Securities News

reported Friday. According to a draft of the regulations released Thursday by

the CBRC to solicit public opinion, no more than 5% of a commercial bank's

shares could be held by a single institution issuing financial products -

including funds, insurance management products and trust products. The

regulation will help prevent "barbarians" from conducting hostile takeovers via

financial products, the report argued. The draft also clarifies that one

investor or its subsidiaries cannot be a main shareholder in more than two

banks. (Shanghai Securities News)

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

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

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