MNI China Press Digest, Nov 12: Fiscal Policy, MLF, LGB

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

on Tuesday:

     China does not face deflation pressure and still has room for proactive

fiscal policy with monetary policy in a supporting role, China Business News

reports. Citing Sheng Songcheng, the former director of the Survey and

Statistics Division of the PBOC, the report says that monetary policy should not

be eased further, but there is a need for structural adjustment. Sheng said that

lowering the medium-term lending facility (MLF) rate or loan prime rate (LPR)

would be more conducive in reducing the cost of financing for the real economy

than a reserve requirement ratio (RRR) cut.

     The PBOC is likely to conduct medium-term lending facility (MLF) in early

December to offset the maturity of CNY187.5 billion MLFs without lowering the

MLF rate, Securities Daily reports. Citing Yuan Yacheng, a senior researcher at

Minsheng Bank, the Daily's report said that after the MLF rate cut last week the

PBOC may slow the pace of further easing, given higher inflation and tightening

regulation of the real estate sector. The PBOC may also conduct continuous

reverse repos to fill in the liquidity gap by year-end, Cheng added.

     China could issue up to CNY3.3 to CNY3.35 trillion of infrastructure-back

special-purpose bonds next year amid the pressure of debt swaps and the need to

stabilize growth, said Ming Ming, the chief analyst at CITIC Securities in a

report. If one-fourth of the new bonds, or around CNY840 billion, were used to

fund infrastructure projects, infrastructure investment growth was likely to

accelerate from 5.5% to 6%, Ming said.

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,MI$$$$]