MNI China Press Digest, May 26: PBOC, Shadow Banking, CDB, CBS

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

on Tuesday:

     China's monetary policy should be more flexible and deliver smoother access

to currency for market players while avoiding arbitrage, according to a report

in Securities Times. Citing Chen Yulu, vice governor of the People's Bank of

China, the report said the coronavirus pandemic may continue to impact the

Chinese economy with debt risk from South Asia and Africa also piling risks onto

the financial system. 

     The China Banking and Insurance Regulatory Commission will continue to

strengthen its supervision of shadow banking and prevent any rebound in the

sector, China Securities Journal reported citing an unnamed official at the

CBIRC. The report said the regulator would increase on-site inspections and

strictly handle violations in asset management services, inter-bank,

off-balance-sheet and co-operative business. The balance of inter-bank asset

management was CNY846 billion by the end of the first quarter, down 87% from the

beginning of 2017, indicating a significant decline in risk, the official told

the Journal. 

     China Development Bank will provide a total of CNY360 billion in financing

to help the Guangdong-Hong Kong-Macao Greater Bay Area play a bigger role in

stabilising the economy this year, Xinhua News Agency reported. CNY110 billion

of the total financing will be invested in technological innovation and

strategic emerging industries, Xinhua said. The finance package includes CNY290

billion in loans, according to the report. 

     The PBOC conducted the fifth central bank bill swap (CBS) operation to

support the issuance of perpetual bonds by commercial banks. The CBS, valued at

CNY5 billion, is open to primary dealers at a fixed rate at 0.1%, according to a

statement on the PBOC website. The swap will be due on August 26, 2020, the

statement said. The CBS scheme allows dealers to swap the perpetual bonds they

hold for central bank bills, which will boost market demand for perpetual bonds.

--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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