MNI China Press Digest May 14: RRR, Yuan, Trade & ZTE

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

Monday:

     The PBOC could further lower RRR for banks this year, China Securities

Journal said, citing market participants. The PBOC could lower RRR two or three

times, market experts said; Xu Gao, chief economist at Everbright Securities

Asset Management, explained that this is because social financing scale is still

low. The PBOC may increase interest rates this year as the U.S. Fed will further

raise interest rates, but the direction of China's monetary policy is expected

not to change, and will remain neutral leaning tight, said Shen Jianguang, chief

economist at Mizuho Securities. China's liquidity depends on its domestic

measures regarding money supply, and on U.S. moves such as changes in U.S.

treasury yields and its pace of monetary policy normalisation, according to Zhu

Hongming, associate researcher at the Development Research Centre, managed by

the State Council.

     The yuan exchange rate in the short term will not see significant changes,

according to Security Daily, which cited Huang Yiping, member of the monetary

policy committee at the PBOC. The PBOC's FX policies aim to enhance flexibility

of the yuan; to allow the market have a bigger role; and to maintain relative

stability of the yuan, the newspaper said, citing Huang. Two recent factors are

to affect yuan exchange rate: the appreciation of the dollar, as the Fed is

expected to further raise benchmark interest rate; and current account changes,

which could be affected by the Sino-U.S. trade row, Huang said.

     China welcomes U.S. President Donald Trump's instruction to the U.S.

Commerce Department to find a solution for ZTE to resume its business, said

Global Times, the government's mouthpiece, in a commentary. China hopes the

decision will be implemented quickly and "unconditionally", and that it is not a

bargaining chip of the U.S. during the trade row, said Global Times. Trump's

decision will ensure 80,000 ZTE employees do not go out of work, said the paper.

China hopes both countries can treat conflicts regarding trade or company

cooperation in a fair way, and without extreme methods, said Global Times. 

***Comments: China and U.S. trade conflicts have further deescalated during the

weekend, with Trump tweeting that the U.S. would help ZTE to find "a way to get

back to business." 

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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