MNI China Press Digest, July 2: Liquidity, RRR, HK

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

on Thursday:

     The phase of "loosest liquidity" has passed and macroeconomic policy needs

to rebalance between stabilizing growth and preventing risks, according to China

Securities Journal. In a front page commentary, the Journal said current

monetary policy is still prudent and maintains liquidity at a reasonable and

sufficient level. However, the PBOC will choose the appropriate time to halt

monetary easing, in the hope of limiting arbitrage activities in financial

markets and to the benefit of the real economy, the Journal said. This does not

mean the PBOC would stop its easing at a fast pace. As a result, liquidity in

the second half of this year will be ample but not as loose as in H1.

     The People's Bank of China may cut the required reserve ratios for banks in

July to ease the pressure on liquidity, according to Citic Securities, one of

China's leading state-owned brokerages. In an analysis report, Citic said the

move would help banks meet the requirement of "giving up 1.5 trillion profits",

and the PBOC would also lower the money market policy rates. Liquidity in the

banking system should stay reasonable and ample in July, Citic said.

     No US allies are following through with sanctions against the National

Security Law for Hong Kong and they are merely making value-based statements,

Global Times said in its editorial. On Hong Kong affairs the US is isolated, the

newspaper said.  European countries have only stressed the law should not

destroy Hong Kong's high degree of autonomy and democracy, the Times said.

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

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

[TOPICS: M$A$$$,M$Q$$$,MI$$$$]