MNI China Press Digest July 25: Infrastructure, Macro Pol,Yuan

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

Wednesday:

     The growth of infrastructure investment is expected to bottom out in the

second half of the year after Premier Li Keqiang called for "more active" fiscal

policy and the further enhancement of financing channels, China Securities

Journal reported. The funding liquidity of infrastructure projects will improve

as the new asset management rules eased the restrictions of non-standard assets,

the Daily said. However, China's economic growth is transforming from

investment-driven to consumption- and innovation-driven, which means it will not

fully rely on infrastructure investment, the Daily added. Infrastructure

investment should shift its focus from quantity to quality, improving investment

structure and efficiency, the Daily said.

     The growth of social financing will be consistent with nominal GDP and not

likely to rebound sharply as Premier Li Keqiang reiterated that China will not

adopt strong stimulus measures, said Financial News, an official PBOC

publication. China should lower its consumption tax and structural tax for

enterprises to echo Premier Li's call for "more active" fiscal policy, said Li

Jianjun, an expert in international finance, according to the newspaper.

Monetary policy should strike a balance between easing and tightening,

strengthen the support for small- and micro-sized enterprises and lead funds

into industries that promote China's economic transformation, Li said, according

to the newspaper.

     The depreciation of the yuan is a reflection of both internal and external

uncertainties and the imbalance between supply and demand, China Securities

Journal reported, citing institutions including Citic Securities. June's

disappointing economic data and the expectation of looser monetary policy added

pressure on the yuan amid the trade tensions, the newspaper said, citing Ming

Ming, chief analyst of Citic Securities. However, the yuan is not likely to fall

significantly as devaluation pressures have eased and the slope of the yuan's

depreciation is higher than that of U.S. dollar index's rise, the newspaper

said, citing GF Securities.

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

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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