MNI China Press Digest Nov 17: Yuan, Liquidity, China-U.S.

The following lists highlights from Chinese press reports on Tuesday:

The yuan may rise to 6 against the U.S. dollar in the medium term on the strength of China's better-than-expected recovery, extending a rally which started with a weakening dollar, the China Securities Journal reported citing Xie Yaxuan, chief analyst at China Merchants Securities. The appreciation will attract capital inflow, which pushes the currency higher, and this appreciation process may be more sustained, Xie said. The onshore yuan rose above 6.57 to the dollar in intraday trading yesterday, a new high for the current rally, the Journal noted.

Recent bond defaults in China are not enough to trigger a liquidity crisis as the PBOC pumped liquidity into the system and local governments intervened to quell the panic, the Shanghai Securities News reported citing Industrial Securities. Some high-risk bonds have started to rebound and there has been an across-the-board rise in government bond futures, the newspaper reported citing Wind data. Credit defaults may still lead to a repricing of credit risks and companies may face difficulties obtaining credit guarantees, so financing costs may become higher for some recipients, according to Industrial Securities.

China is prepared for any fresh attacks and harm launched by the Trump administration during the post-election U.S. government transition, the Global Times said in an editorial late Monday. Beijing will hit back if the U.S. and Taiwan collude to make a sudden and unacceptable move, the Times said. China has no reason to be afraid of any "final madness" as the Trump administration's extreme words and fault-picking on issues such as on China's human rights record have had no impact, the editorial said.