MNI China Press Digest Jan 11: Fiscal Policies, Bonds, Taiwan

The following lists highlights from Chinese press reports on Monday:

China should ensure the sustainability of its fiscal policies, avoid abrupt changes and allow major projects to be properly funded, the People's Daily reported citing Bai Yanfeng, dean of the Central University of Finance and Economics. China should improve the transparency and efficiency of its bond market to tackle hidden local government debt risks, said Bai. China should also train monetary policy tools to better guide financial institutions in supporting target areas, the newspaper reported citing Zeng Gang, the deputy director of National Institution for Finance and Development.

China may issue a lower CNY3 trillion in new special local government bonds in 2021, down from last year's 3.75 trillion as control over the coronavirus outbreak allows the government to scale back borrowing and tackle the risk of ballooning debts, the Securities Daily reported cited Zhang Yiqun, a member of the Society of Public Finance of China affiliated with the Ministry of Finance. China should relax the time limit for special bond issuance, expand the scope of usage, and redirect funds according to the needs of specific projects, the newspaper said citing Minister of Finance Liu Kun.

The incoming Biden administration should not underestimate China's resolve and capabilities to defend its sovereignty and territorial integrity, the China Daily said in editorial denouncing a planned trip to Taiwan by the current U.S. ambassador to the UN Kelly Craft. The lifting of U.S. restrictions on official contact with Taiwan would be met with strong opposition and countermeasures from Beijing, which considers the One China policy and a pledge from the U.S. not to officially engage with Taiwan the bedrock of bilateral relations, the official English-language newspaper said. The move is another effort by the outgoing Trump administration to hobble its successor, the Daily said.