MNI China Press Digest, Jan 2: Fiscal Policy, Sino-US, SMEs

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

Wednesday:

     China's top priority is to halt the further decline of its economic growth,

so it is necessary to adopt an expansionary fiscal policy, supplemented with a

moderately loose monetary policy, said China Business News on Tuesday citing Yu

Yongding, a former member of the PBOC's Monetary Policy Committee. Yu believes

that China has room for expansionary fiscal policy and the deficit-to-GDP ratio

is likely to break the 3% ceiling in the future, the newspaper said.

     Cooperation is the best choice for China and the U.S., the People's Daily

overseas edition commented today in a front-page editorial on the occasion of

the 40-year anniversary of Sino-U.S. relations. In terms of economic and trade,

the two countries should ensure healthy competition and abandon the

zero-sum-game approaches. Both sides should pursue mutual security instead of

the bilateral "absolute security" and avoid developing into full confrontation,

the Daily said.

     China's current liquidity is not tight, and the monetary policy should

focus on "targeted easing" to help direct liquidity into the weak link of the

real economy, said Financial News, a newspaper run by the PBOC today. The

financial sector should meet the credit demand of private and small enterprises.

Banks should develop detailed support plans for small and micro-enterprises and

customize credit quotas for them, the newspaper 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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