MNI China Press Digest, Jan 3: PBOC, RRR Cuts, Consumption

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

Thursday:

     The PBOC is expected to release about CNY600-700 billion liquidity,

following its adjustment of reserve ratio criteria for small and micro-sized

enterprises, the Economic Observer said late Wednesday citing Liao Zhiming, an

analyst at Tianfeng Securities. SMEs with a credit line of less than CNY10

million will be qualified to enjoy the central bank's targeted RRR cuts,

compared with the previous standard of CNY5 million, the PBOC said in a

statement on its website last night. The move expanded the scope of SMEs and

will guide banks to better meet their credit needs, the newspaper said.

     The PBOC is likely to cut targeted reserve requirement ratios (RRR) before

the Chinese New Year starting Feb 5, so as to fill the liquidity gap due to the

maturity of over CNY1 trillion of funds, greater cash withdrawal demands and the

issuance of local government bonds, said China Securities Journal today. The

central bank is expected to conduct RRR cuts and Targeted Medium-term Lending

Facility (TMLF) in January to release long-term liquidity, supplemented with

short-term liquidity injection, the newspaper said citing Ming Ming, a former

PBOC advisor.

     China's Ministry of Commerce and the National Development and Reform

Commission are planning to put forward a series of policies to further stimulate

consumption, including increasing residents' incomes, promoting the service

industry and reducing import tariffs, the Economic Information Daily said today.

Retail sales this year is expected to grow by about 9% from a year earlier,

contributing 65% to the economic growth, the newspaper said.

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

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