MNI China Press Digest, June 12: China-U.S., Funds, Liquidity

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

on Wednesday:

     Demands for US scientists to cut links with foreign sponsors is

self-destructive and will ultimately dampen US prosperity, Global Times said in

an opinion piece today. The editorial said the move signalled a return to the

McCarthyist anti-communism of the 1950s, and could result in the widespread

persecution of Chinese scientists in the US.

     Beijing's new policy to allow local governments to use proceeds from

special bonds as capital for key infrastructure projects will leverage about

CNY700 billion of funds, said Securities Daily today citing Guo Xiaobei, analyst

at Mingsheng Bank. The policy will send a positive signal to the financial

markets, and is conducive to economic growth and corporate performance, the

newspaper said. The major factor restricting infrastructure investment is a lack

of funding, and the latest policies addressed this issue, the Daily cited Guo as

saying.

     The PBOC is expected to keep liquidity at an ample level through open

market operations and there is room for a targeted reserve requirement cut and

lower interest rates, China Securities Journal reported today. Citing Pan

Xiangdong, chief economist at New Times Securities, the Journal's report said

the PBOC may stabilize liquidity conditions by liberalizing interest rates and

lowering the loan prime rate (LPR) or the targeted medium-term lending facility

(TMLF) rate.

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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