MNI China Press Digest, May 31: Liquidity, China-U.S., PBOC

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

on Friday:

     The PBOC is expected to inject liquidity into the banking system in June to

fill the liquidity gap created by the maturity of reverse repos and interbank

deposits, China Securities Journal said in a front page report today. The PBOC

has shown its intention to keep liquidity at an ample level through recent

injections, which came against the backdrop of a deteriorating external

environment and the seizure of a risky domestic small lender, the newspaper

said. The report said the PBOC would use a variety of tools to deal with the

liquidity gap.

     Communist Party mouthpiece the People's Daily newspaper has published a

series of commentaries in the past nine days to argue why the U.S. will fail if

it keeps escalating trade frictions with China. The commentaries highlighted

nine reasons which the newspaper said would contribute to the failure of U.S.

policy. The People's Daily said that Washington is ignoring the rules of global

trade, playing a zero-sum game, going against the trend, refusing competition,

using double standards, breaking promises, going its own way and assuming a

position of superiority.

     The PBOC's move to set up a Deposit Insurance Fund Management Company would

guarantee CNY68 trillion yuan of residents' deposits and minimize risks to the

banking system, Securities Daily said today. China's deposit insurance system

was also perfectly integrated with the global system, the newspaper added.

--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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