MNI China Press Digest March 7:Yuan Appreciation, Money Supply

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

Wednesday:

     Chinese currency yuan may maintain a gradual appreciation while remaining

stable in the long term, China Securities Journal said in a commentary. The yuan

would fluctuate slightly in the short term on the dollar's rebound, but China's

resilient economy, prudent and neutral monetary policy, and its management of

market expectations would likely make the currency stable. 

     China's evolving economic conditions make its previous practice of setting

annual M2 broad monetary-supply growth target obsolete, Securities Daily

reported citing Xiao Gang, former chairman of the China Securities Regulatory

Commission and now a member of the legislative advisory body CPPCC. Not having a

hard target for M2 doesn't equate tightening liquidity, Daily cited Xiao as

saying. The old ways to measure M2 can't match China's new  reality, including

changing technology and expanding financial sector, Daily said citing Xiao.

     ***Comment: Premier Li Keqiang's government report on Monday didn't mention

targeted growth of M2 this year. That has touched off much discussion. But it's

unsurprising as the government has said it is avoiding a "flooding" credit

approach to support the economy. Government advisors have long downplayed the

slowing rate of M2 expansion.              

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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