MNI China Press Digest, Jan 11: Overcapacity, Inflation, PBOC

     BEIJING (MNI) - The following lists highlights from the Chinese press for

Friday:

     China will strictly limit the scope of new expansion projects producing

steel, cement, glass and ban new aluminum smelters as it tries to maintain the

result of its effort cutting excess industrial capacities, Xinhua News Agency

reported late Thursday citing Miao Wei, the Minister of Industry and Information

and Technology.

     Inflation is expected to stay around 2% in 2019 amid an economic downturn

with sluggish demand and oversupply, the Securities Daily reported on Friday

citing Pan Xiangdong, chief economist at New Times Securities. The lack of

inflationary pressure this year will help the central bank be flexible with its

monetary policy and guide the bond market interest rates lower, the newspaper

said citing Liu Dan, analyst at China Galaxy Securities.

     The People's Bank of China (PBOC) must use targeted easing measures while

keeping the overall liquidity at a certain level to help maintain the vitality

of small companies, the Securities Daily said in a commentary on Friday.

Policymakers should prevent fast contraction of credit that may hurt the real

economy, while avoid releasing too much liquidity that could undermine

structural reform, the daily said.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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