MNI China Press Digest, June 2: HK, Yuan, Free Trade Port

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

on Tuesday:

     US moves to revoke Hong Kong's special status will irreversibly damage the

business interests of a slew of US companies investing in Hong Kong, according

to Global Times. Citing Sun Chenghao, an assistant research professor at the

Institute of American Studies at the China Institute of Contemporary

International Relations, the report said the Trump administration may decide

against rash moves over Hong Kong as it looks to secure support in the upcoming

election. The current anti-China sentiment is closely related to the coming

presidential election and the economic difficulties in the US, Sun said. He

expected the relationship to thaw if Washington can overcome the challenges

caused by the pandemic and move past the charged political atmosphere of the

election.

     The Chinese yuan will get back to a range of around 7 against the USD in

the medium-term, and tools such as "counter-cyclical factors" would be

introduced by the People's Bank of China to guide expectations in the foreign

exchange market, China Securities Journal reported. Citing Zhang Jiqiang, an

analyst with Huatai Securities, the Journal said the recent depreciation of the

Chinese Yuan had little to do with economic fundamentals since high-frequency

data showed the Chinese economy is recovering rapidly.

     China has published a blueprint to build Hainan Province, an island off the

mainland, into a free trade port. The free trade port blueprint, released on

Monday, promises to build a custom mechanism featuring "zero-tariffs" and to

significantly relax market and investment access for foreign companies,

according to He Lifeng, the director of the National Development and Reform

Commission. Quoted in the People's Daily, He said Hainan Island deviates from

the main international shipping routes and lacks development in the hinterland.

As a result, the island should focus on the tourism industry, a modern services

industry and high-tech industry instead of developing processing trade using

imported raw materials, He said.

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

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

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