MNI China Press Digest July 23: PBOC, Yuan, Fiscal Policy

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

Monday:

     The new asset management rules published by the PBOC will alleviate

refinancing pressure on enterprises and boost market liquidity, China Securities

Journal reported, citing experts. The new rules will cushion the impact of

transferring off-balance sheet assets back to the table and ease the pressure of

a credit crunch on the real economy, the Daily said. By easing market sentiment,

the new rules will stabilise the growth of social financing and ease downward

pressure on GDP growth, the newspaper said, citing Pan Xiangdong, chief

economist of New Times Securities. The rules will also relieve the pressure of

capital redemption for commercial banks, promoting the transmission mechanism

from narrow liquidity to broad liquidity, Pan added.

     The yuan is likely to rebound against the U.S. dollar soon as market

sentiment has seen positive changes, Shanghai Securities News said, citing

experts. The U.S. dollar index is unlikely to remain above the 95.0 level as the

Michigan Consumer Sentiment Index (MCSI) and PPI for imported goods in June were

both below expectations, the newspaper said, citing Citic Securities. The yuan

is expected to remain stable or rise slightly against the U.S. dollar in the

second half of the year, said Shenwan Hongyuan Securities, according to the

newspaper. China's economic growth should stabilise in the long term due to

strengthening bilateral trade with other countries and increasing domestic

demand, Shenwan Hongyuan Securities added.

     China should implement targeted fiscal policies and further cut taxes and

fees to support China's economy, China Securities Journal said, citing experts.

China should enhance its expenditure structure and prevent the risks from PPPs

to increase effective supply and stimulate investment and expenditure, said the

newspaper, citing Jia Kang, head of China Academy of New Supply-side Economics,

a private think tank. To expand domestic demand, China should implement targeted

measures that satisfy the financing requirements of the real economy to increase

manufacturing investment and boost consumption, the newspaper said, citing Li

Xunlei, chief economist of Zhongtai Securities.

--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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