MNI China Press Digest, Jan 25: Perpetual Bonds, Electric Cars

     BEIJING (MNI) - The following lists highlights from Friday's China press:

     Perpetual bond issuance can serve as an effective and sustainable channel

for commercial banks to replenish their capital, diversify products in the bond

market, and ultimately help improve the pricing of the capital market and the

transmission mechanism of monetary policy, said Huang Yiping, deputy director of

the National School of Development at Peking University, China Securities

Journal reported today. The comments come after the PBOC's latest move to set up

a central bank bills swap(CBS) to support liquidity of banks' perpetual bonds.

     Issuance of perpetual bonds is expected to drive more than CNY4 trillion of

credit growth, China Securities Journal reported today, citing analysts from

Minsheng Securities. Assuming that the net capital of commercial banks will

reach 5% after the issuance, the credit supply of banks may add CNY4.24 trillion

by the third quarter next year, the newspaper said.

     China's electric vehicle market is suffering from overcapacity, with

current capacity too scattered in different areas, Sina Finance reported today,

citing Lin Boqiang, director of the China Institute for Studies in Energy

Policy. There are about 250 registered electric carmakers in China, and Lin

thinks that ten are enough, the report said. Moving forward, the government

should actively avoid large-scale surplus or waste because of over production,

Lin suggested.

--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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