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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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