MNI China Press Digest, Jan 16: Yuan, Local Gov Debt, SOEs

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

Wednesday:

     Although the yuan faced depreciation pressure in 2018, the market has

adapted to the fluctuations and there were no panics in the forex market, China

Business News reported late Tuesday, citing Guan Tao, former director of the

Balance of Payments Department at the State Administration of Foreign Exchange.

This is positive progress that will be conducive to the liberalization of the

foreign exchange market. "To liberalize the market, we must let the exchange

rate leverage play an important part, and allow investors to buy at a low price

and sell at a high price", Guan said, CBN reported.

     Local governments are strictly banned from using reserve land as a

collateral for financing -- 'illegal financing' as it has been referred to --

and they are forbidden to move reserve land to local state-owned

enterprises(SOEs) as an asset, a government document has laid out. The move aims

to curb new local government implicit debts, the Economic Information Daily

reported, citing the Ministry of Natural Resources. The confirmed regulations

say all local governments may no longer take land reserve loans from banks, and

land reserve agencies shall not provide guarantees for any debt, the newspaper

said citing the Ministry.

     The State-owned Assets Supervision and Administration Commission(SASAC)

will tighten control over the financial business and debt risk of state-owned

key enterprises this year, China Securities Journal said today. Key SOEs'

financial business will be limited to adding new investment projects, and those

who launch financial derivative business must prohibit any speculative activity,

the newspaper said, citing SASAC.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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