MNI China Press Digest May 8: 2nd Trade Talk, Yuan, REITS

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

Tuesday:

     Liu He, the Chinese vice premier, will visit Washington next week, though

other details have not yet been confirmed, Caixin reported, citing the White

House. Liu will meet with U.S. trade representatives and officials for another

round of negotiations on trade, according to White House spokeswoman Sarah

Sanders, Caixin said. 

***Comments: Liu's visit to the U.S. comes earlier than some expected, shortly

after the U.S. delegation came to Beijing for trade talks with Chinese

officials. The two sides' willingness to negotiate has soothed the markets in

recent days, though they continue to diverge on major concerns such as trade

deficit and intellectual property protection issues.

     The yuan against the dollar is expected to fluctuate both ways, Securities

Times said in a front-page commentary. Though the dollar has been strengthening

for more than ten days, CNY indexes - which reflect the yuan's value against ten

major currencies - have been rising since mid-April, the commentary said. In the

short term, the foreign exchange settlements are not expected to help with the

depreciation of the yuan, the newspaper said. In the medium term, the Chinese

government is expected to not devalue the yuan as its foreign reserves of

CNY3.125 trillion are sufficient to stabilize the yuan exchange rate; while

capital flight has been restricted, and thus would not cause large fluctuations

in the yuan, the newspaper said.

     China's long-awaited public real estate investment trust (REITS) will be

launched this year or next year, China Securities Journal reported. The basic

framework is likely to be fixed-asset security funds and asset-backed

securities, the newspaper said, citing unidentified market participants. As the

Chinese government is campaigning to deleverage and develop its rental housing

market, securitization of rental housing assets will advance, the newspaper

said. 

***Comments: The launch of public REITS in the near future could open up a large

investment market for Chinese citizens as it allows them to invest in the

property sector outside of simply buying houses. The move is expected to cool

down the frenzy of buying houses for speculation and investment in China, thus

reining in a potential property bubble.

--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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