MNI China Press Digest June 1: RRR Cut,Tariffs,Local Financing

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

Friday:

     The People's Bank of China (PBOC) will likely cut reserve requirement ratio

(RRR) for banks soon, Securities Daily reported, citing unidentified experts.

The cut is expected to fall within the range of 0.5 to 1.5 percentage points,

the newspaper said. The recently-issued rules on wealth management products

require financial institutions to adjust their asset structure and businesses,

causing liquidity pressure; thus the central bank needs to take action to

support these institutions, said the Daily. As commercial banks need to pay back

CNY2 trillion in short-term debt in June, and July is a tax collection month,

the PBOC is very likely to cut RRR to reduce liquidity risks, the newspaper

said.

     China is expected to further lower tariffs for necessities and consumer

products, China Securities Journal reported. Affected products include watches

and clocks, maternal and child supplies, and jewelry, the newspaper said. China

will also, for the third time, reduce tariffs for some technology products from

overseas; while encouraging the increase of imports of advanced tech equipment,

components and energy, the newspaper said.

     As authorities are clamping down on local government's illegal financing

activities, the financing of municipal investment companies is increasingly

facing difficulties, 21st Century Business Herald reported. Financing of these

investment companies, which are usually used for the construction of local

infrastructure projects, is negatively affected by the new rules regulating

wealth management product(WMP) businesses which ban WMP businesses of some

security companies and funds, the newspaper said. Financial trusts are also

tightening standards for lending to companies with government influence, as they

are less certain that local governments would help these investment companies if

any risks occur, the newspaper said.

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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