MNI China Press Digest May 15: Deleveraging, Rates, PPPs

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

Tuesday:

     Despite recent corporate bond defaults, deleveraging still should advance,

Securities Times said in a commentary. China taking the initiative to deleverage

could prevent systemic financial risks, the newspaper said. As China has

achieved success in its capacity cuts and inventory reduction, deleveraging

should not lag behind. The government must strengthen deleveraging especially in

the corporate sector, according to the newspaper. The government should avoid a

situation where companies transfer responsibility to the government in order to

truly curb further expansion of credit and irresponsibility of stakeholders, the

newspaper noted. 

     Integrating the deposit interest rate and money market rate is the final

barrier China should overcome during its efforts to make its interest rate

system more market-based, Financial News said. It would make PBOC's adjustment

of market interest rates more efficient, the newspaper managed by the PBOC said.

PBOC's Q1 monetary policy report indicates that the central bank is making

efforts to advance interest rate reform, the newspaper said. 

     The quality of China's public-private partnerships (PPPs) will be enhanced

as the government places further controls on the sector, Economic Information

Daily reported. As of April 23, 1695 PPPs worth CNY1.8 trillion were cancelled

by local governments as China is tackling potential risks in the segment, the

Daily said. A new round of PPP growth looks likely as the government leads a

push into areas such as tourism and Hainan further opens up, the newspaper said.

After the government's clamp down on illegal PPPs, PPP projects in the future

will be higher quality and more in line with local governments' fiscal

situations, the newspaper said, citing Zhuo Shi, PPP expert at government-backed

Chinese Academy of Fiscal Sciences.

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

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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