MNI China Press Digest July 4: Deleveraging, Bond Defaults

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

Wednesday:

     China's financial regulators should guide structural deleveraging with a

flexible approach, Shanghai Securities News reported citing Ma Jun, a member of

the Monetary Policy Committee of the People's Bank of China (PBOC). The

Financial Stability and Development Committee (FSDC) should coordinate with

different parties to control the strength and pace of deleveraging and be on

guard for secondary risks in the process, Ma told the newspaper.

     The PBOC will propose trading mechanisms for maturing bond defaults and

further promote bond market infrastructures to connect domestic and foreign bond

markets, Xinhua Finance reported citing Pan Gongsheng, director of State

Administration of Foreign Exchange. Allowing some bonds to default is good for

the long-term and healthy development of China's bond market, Pan said according

to Xinhua Finance. Appropriate bond defaults place controls on both issuers and

investors and the prices of the bonds will reflect the quality of the bonds, Pan

said according to the news service.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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