MNI: China Press Digest, March 1: CPCC, Yuan, Financial Reform

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

Thursday:

     The 19th Communist Party Central Committee third plenum, a meeting of

China's most high-profiled officials, stated in a communique that the plenum

approved a list of the country's leadership candidates ahead of a reshuffle.

According to the communique concluding the three-day third plenum meeting, the

list will be recommended to the National People's Congress, which starts next

week.

     The yuan is likely to remain stable with a rising trend, and the currency

is expected to strengthen its two-way fluctuation characteristic, reported China

Securities Journal. As the dollar will be relatively weak in the medium term

despite its recent rise, while China's economic fundamentals are still strong,

expectations for the yuan remain unchanged. The yuan will continue to fluctuate

following changes in the dollar. As the dollar could rebound ahead of U.S. Fed

interest rate announcement in March - which is expected to see a hike - the yuan

will experience some fluctuations. In the short term, the dollar's rebound will

continue due to expectations that Fed will hike interest rates, an increase in

U.S. inflation, and Fed officials' recent hawkishness.

     China's reform of its financial system will be further deepened this year,

with more policies issued for structural adjustment of the financial sector,

reported China Securities Journal. The financial sector is still not serving the

real economy well - the main form of financing is still indirect financing, and

direct financing needs to be increased. Financial risks still exist, calling for

a better regulated, more market-based financial system.  Good financial

regulation should not impede operations of the market, and components of

regulation should not conflict with one another: Li Yang, head of state-backed

National Institution for Finance and Development.

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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]