MNI China Press Digest July 17: Yuan, Macro Pol, Employment

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

Tuesday:

     The yuan is unlikely to fall below the 7.0 level, as China's economy

continues to be resilient, reported China Securities Journal, citing experts. It

is still necessary to be cautious of the impacts of irrational market

expectations, the Daily said. The recent depreciation of the yuan against the

U.S. dollar was an effect of both the slowdown in China's economic growth and

market expectations, the Journal said, citing Sheng Songcheng, former director

of Financial Survey and Statistics Department under the PBOC. With the

liberalization of the exchange rate, the PBOC is more tolerant of short-term

fluctuations, but it will not hesitate to step in when necessary, the Journal

reported, citing experts.

     China should fine-tune its fiscal policy and monetary policy in the second

half of the year, said Liu Yuanchun, vice President of Renmin University in an

interview with 21st Century Business Herald. Against the background of the

accelerating pace of fiscal expenditure in the second half of the year, local

governments should invest in more projects and adjust the rules of special

transfer payments, Liu said. With the decline in the overall savings rate,

over-reliance on fiscal policy may result in credit overdrafts for local

governments, Liu added. The monetary policy needs to return to a real neutral

and steady level as M2 and social financing data have been slightly tight, Liu

added.

     National Development and Reform Commission (NDRC), with other ministries,

has proposed to promote and stabilize employment in a statement, according to

Xinhua News Agency. The government will support enterprises focusing on

industrial upgrading and advancing product technology, said Xinhua. Enterprises

should take advantage of employment subsidies to adjust industrial structure and

compensate workers affected by the trade friction, the newspaper added. China

should accelerate the transformation of traditional industries and create more

high-quality employment opportunities, said Xinhua.

--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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