MNI China Press Digest, Nov 13: Risks, Costs Cuts, Consumption

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

Tuesday:

     China's economy could face three major financial risks in the year ahead,

including possible local government debt defaults, pressures generated from

ongoing real estate market regulation reform and the U.S. lifting long-term

interest rates beyond expectations, wrote Zhang Ming, researcher at the

Institute of World Economics and Politics under the Chinese Academy of Social

Sciences in a commentary piece published by Economic Daily on Tuesday. Zhang

suggests that the government should increase the issuance of treasury bonds to

hedge the deleveraging pressure on local governments. At same time, the banking

system should raise appropriate capital and set aside more money against bad

loans, the newspaper said citing Zhang. (Link to the story:

https://bit.ly/2JXA6cX)

     Small and micro enterprises are expected to save nearly CNY1 billion in

costs if the average interest rate of borrowing from major commercial banks is

cut by 0.3 percentage point as the State Council proposed, the Securities Daily

said on Tuesday. The State Council executive meeting last Friday, deciding to

cut the average interest rate for lending to small companies by one percentage

point in the fourth quarter, compared to that in the first quarter. This will

lead to an actual 0.3 percentage point cut, the newspaper said. As of end Q3,

the average interest rate of small companies charged by 18 major commercial

banks was 6.23%, about 0.7 percentage points lower than that in the first

quarter, the Daily said, citing data from China Banking and Insurance Regulatory

Commission. (Link to the story: https://bit.ly/2PWWgkI)

     China's economy has great potential for growing consumer demand, with the

continuing trend of upgraded consumption -- where consumers buying habits move

towards higher grade items -- seen during the Double Eleven e-commerce shopping

festival last weekend, the Economic Information Daily said in a front-page

commentary Tuesday. The historical high CNY213.5 billion on turnover on Taobao,

the world's biggest e-commerce website, seen on Nov 11 underlined the spending

power of China's consumers, the Daily said. Though retail sales growth

decelerated to below 10% this year, online retail sales continues to grow at

around 30%, which will help to offset external headwinds and stabilize economic

growth. (Link to the story: https://bit.ly/2PQTY6Z)

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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