MNI China Press Digest, June 6: NPLs, PBOC, Foreign Investment

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

on Thursday:

     Chinese authorities should be more tolerant of the non-performing loans

taken out by small and micro-sized enterprises, according to an executive

meeting of the State Council. A statement on the government website says small

company's NPL rate should be relaxed from the previous requirement of not more

than 2 percentage points higher than the general NPL rate, to 3 pps. The

relaxation is aimed as a guide to banks to lower actual interest rates and

financing costs for small companies.

     The PBOC says it is committed to providing timely support to small and

medium-sized banks with temporary liquidity issues, according to a statement on

the central bank's website published late Wednesday. The statement, issued by

the PBOC's Shanghai head office, appeals for calm in the market after the PBOC's

seizure of the small lender Baoshang Bank. The PBOC says this was a special case

and that overall the small and medium-sized bank sector is healthy and has

enough liquidity.

     A new list of banned areas for foreign investment will be released by the

end of this month, according to a report from the Xinhua News Agency. The report

quoted Ning Jizhe, deputy director of the National Development and Reform

Commission, who said the updated list would be shorter than previously. The

government will remove all restrictions on foreign investors, except for areas

on the banned list, and will treat domestic and foreign companies equally.

--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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