MNI China Press Digest, July 26: FedEx, Financial Supply, Bond

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

on Friday:

     China's government will continue to investigate FedEx Corp, as it has found

further possible violations by the company while investing the logistics firm's

failure to deliver Huawei Technology's parcels to designated addresses in China,

Xinhua News Agency reported today. FedEx is also suspected of holding more than

100 parcels sent by Huawei to enter China, Xinhua said. The investigation found

that FedEx's earlier statement claiming Huawei packages were "misrouted in

error" is inconsistent with the facts, Xinhua reported.

     China must strengthen its financial supply capacity in order to lower

interest rates, said 21st Century Business Herald in a commentary today. Banks

must diversify its asset-backed lending model and improve new financing methods

including trade financing, the newspaper said. It is also necessary to break the

business restrictions on city and rural commercial banks, allowing them to

operate across regions and participate in the inter-bank lending market, the

newspaper said. Banks' business model should not be limited by regions, but its

actual cash size, the paper added.

     The widening spread between Chinese government bonds and the U.S. Treasury

bonds is attracting more foreign funds to flow into Chinese bond market, the

China Securities Journal said today. The move comes as several market sources

expect the U.S. Federal Reserve to cut rates by 25bps next week, the paper says.

Some foreign investors think they will miss the opportunity if they don't enter

the Chinese bond market at this time, the newspaper said.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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