MNI China Press Digest, July 16: Banks, Demand

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

on Friday:

     China's government has disclosed for the first time that 18 regional

authorities will tap the proceeds of CNY200 billion in special-purpose local

government bonds to recapitalise local banks, Shanghai Securities News reported.

The News cited comments from Liu Rong, a deputy director of the department

overseeing city commercial banks at the China Banking and Insurance Regulatory

Commission, as its source. Provincial governments will carry out the initiative

to invest in local bank convertible bonds and authorities are working on the

details, Hong Xiaoping, the deputy director from the department in charge of

rural commercial banks, told the News.

     China should take measures to improve demand in the economy including the

distribution of consumption coupons and subsidising the purchase of home

appliances and automobiles, according to the China Securities Journal. In a

commentary, the Journal said the government should also step up investment in

infrastructure projects to boost demand. China will see higher economic growth

in Q3 and Q4 with the augmented stimulus, the Journal said.

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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