MNI China Press Digest July 19: Loans, Property, MLF Funding

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

Thursday:

     China Banking Regulatory Commission (CBRC) has urged financial institutions

to increase loans and cut financing costs for private, small- and micro-sized

enterprises, reported Xinhua News Agency. Large and medium-sized banks should

lead the way in increasing loans to small- and micro-sized enterprises, and

should establish proper and preferential loan prices to bring down the lending

rate, Xinhua said. Financial institutions should also categorise enterprises and

tailor their services and policies to individual businesses, Xinhua added.

     Local governments are still in charge of approving loan contracts for

shantytown innovation projects, Xinhua News Agency reported, citing a manager of

China Development Bank (CDB). The CDB has not tightened approvals for shantytown

renovation projects, but will review the contracts after local governments'

approvals to prevent excessive borrowing and potential risks, Xinhua said,

citing the manager. Local governments have issued a total of CNY460.9 billion in

loans as of the end of June this year, the manager noted, according to Xinhua.

     The PBOC has advised banks via "window guidance" to provide medium-term

lending facility (MLF) funds for primary dealers to support loan placement and

bond investment, 21st Century Business Herald reported, citing financial

professionals. Additional MLF funding will be allocated to lower-rated bonds to

alleviate the impact of frequent bond risks, the newspaper said. The PBOC's move

signals the end of its "loose currency and tight credit" policy, said Ding

Anhua, chief economist of China Merchants Bank, according to the newspaper. The

PBOC will not reverse its monetary policy, but may use some instruments to

cushion the downward pressure on the economy in the third and fourth quarters,

the newspaper said, citing an anonymous analyst.

--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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