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MNI China Press Digest: Monday, Nov. 20

     BEIJING (MNI) - The following are highlights from the China press for
Monday, Nov. 20:
     The yuan's status in the world continues to rise and China's financial
markets continue to open up, People's Daily, a government mouthpiece, said
Monday in a front-page commentary. China has reduced foreign-exchange risks and
made trade and investment more convenient through bilateral currency swaps, the
Renminbi Qualified Foreign Institutional Investor (RQFII) program, outright
monetary transactions, renminbi clearing banks and the Cross-Border Interbank
Payment System. China will stick to further opening up markets, improving the
pricing process for the yuan exchange rate and reducing controls on capital
flow, the newspaper said. "This creates a good financial environment for China's
economic growth," said Zhu Juan, director general of the international
department at the People's Bank of China. (People's Daily)
     China's economic growth is expected to surpass 6.5% in 2018, said Fan
Hengshan, deputy secretary-general of the National Development and Reform
Commission, the Shanghai Securities Journal reported Monday. This year's
economic growth, whether in terms of efficiency or structure, is better than
last year and has exceeded expectations, Fan said on Saturday during a forum in
Beijing. If this year's economic growth is more than 6.8% or 6.9%, next year's
gross domestic product growth will be no lower than 6.5%, he argued. He also
said that as China works to transform its growth engine, focusing on efficiency
and structure, its economy will improve in quality and fairness. (Shanghai
Securities Journal)
     China should allow local-government financing vehicles (LGFVs) and
state-owned enterprises controlled by local governments to default under market
forces, which could correctly judge the credit risks of local-government debt,
Ma Jun, former chief economist of the People's Bank of China, told the Shanghai
Securities Journal. Ma, now director of the Tsinghua University Finance and
Development Research Institute, stressed that the process needs to have as its
primary goal the prevention of a systemic financial crisis. The establishment of
property taxes nationwide should be accelerated as a source of income for local
governments, he argued, which would weaken the desire to increase liabilities
and sell land for more income to fund projects. Supervision by local People's
Congresses should be strengthened, with enforced debt quotas and transparency on
balance sheets. (Shanghai Securities Journal)
     The State Council has confirmed a plan for a pilot program this year to
transfer 10% of the shares of some state-owned-enterprises (SOEs) to basic
pension funds, the Economic Information Daily, a newspaper under the official
Xinhua News Agency, reported Monday. The plan, announced Saturday, is to use the
money from the shares to fund pensions for SOE workers. The transfers would not
involve listed SOEs and would not create a process to turn SOE shares into cash,
the newspaper said, citing an unidentified Ministry of Finance official. The
plan calls for increasing the pace of the transfers in 2018 and the following
years. (Economic Information Daily)
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: rich.dirks@marketnews.com
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