MNI China Press Digest, June 21: Rate Cut, Yuan, China-U.S.

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

Friday:

     China's monetary policy would be based on structural easing rather than

simply following any cut in interest rates by the U.S. Federal Reserve,

according to Securities Daily. In a front page article today, the Daily said

China's current policy tone ruled out strong stimulus and was focused on

supporting private and small companies. There was still room to selectively

reduce the reserve requirement ratio, the newspaper added.

     The yuan exchange rate will fluctuate in the short-term but long term

depreciation of the currency is impossible due to China's economic fundamentals,

the People's Daily reported today. The newspaper published an article by Guo

Shuqing, chairman of China Banking and Insurance Regulatory Commission (CBIRC),

who said he believed the yuan would continue to approach purchasing power

parity. Guo also said that China must deepen reforms and continue to open its

economy to counter the trade frictions with the U.S.

     Progress in talks between China and the U.S. leadership at the G20 meeting

is dependent on U.S. goodwill towards reaching a fair deal, according to an

op-ed article in Global Times late Thursday. The article said that in any fair

deal, no one party should be able to exert pressure or exploit its own interests

at the cost of another party. The op-ed said that China does not want the trade

war to become the norm in China-U.S. relations and hopes to end it as soon as

possible, but is also prepared for any worse-case scenarios given the unstable

attitude of the U.S.

--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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