MNI China Press Digest July 16: Debt, Macro Pol, Fiscal Rev

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

Monday:

     China has started a new round of inspection on local governments' implicit

debts, focusing on the cashflow and debt level of PPP projects, reported China

Securities Journal. The regulation of implicit debts may increase the fiscal

pressure of local governments, resulting in a large gap in fund storage, the

newspaper said, citing Lian Ping, chief economist of the Bank of Communications.

The pace of issuing local government debts is expected to rise significantly in

the second half of the year, reaching a total amount of CNY4 trillion by

December, the newspaper said. In addition to clearing implicit debts, China

should promote legalization and liberalization of local government debts, the

Daily said, citing experts.

     The excessively high macro deleveraging rate and the pressure of

fixed-asset investment may affect China's economy in the second half of the

year, reported China Securities Journal, citing Wang Yiming, deputy director of

the Development Research Center of the State Council. Local governments should

expand financing channels for private enterprises and continue to invest in

projects in progress while controlling debt levels, Wang said. China's macro

policy will face greater challenges as the U.S. and the Eurozone's quantitative

easing policy gradually fades out, Wang said. However, these factors work as

both pressure and stimulus, pushing China to further open up, Wang added.

     The growth of fiscal revenue is expected to slow down in the second half of

the year, but the annual goal can still be reached, reported Economic

Information Daily, citing Lou Hong, director of the Ministry of Finance's

Treasury Department. Further administrative reform will drive high-quality

development and support the growth of fiscal revenue, Lou said. However,

uncertainties in the international trade environment and tax and fees reduction

policies may still influence the growth, Lou added. The government will further

reduce taxes and implement other policies to improve the business environment

and lower the market's burden, the newspaper said.

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

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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