MNI China Press Digest, Nov 21: Deficit, Equity, Housing

     BEIJING (MNI) - The following lists highlights from Wednesday's China

press:

     Instead of expanding the fiscal deficit by cutting taxes and fees, the

government should stick with their 3% deficit-to-GDP ratio in 2019, but instead

reduce spending to make room for tax cuts, the 21st Century Business Herald said

in a commentary published Wednesday. According to the paper, the thinking behind

recent calls for an increased deficit is to underpin growth, but such thinking

has helped fuel the build up in local government debt and excessive leverage

ratio at SOEs. The government should focus away from debt-driven economic growth

and look to link boosting spending with fiscal reform instead, the newspaper

said. (Link to the story: https://bit.ly/2FzEArt)

     The equity pledge risks of listed companies is being effectively resolved,

as the A-share market recovers after a government-led bailout, the Financial

News, a newspaper run by the People's Bank of China, said Wednesday. This month,

more than 200 listed companies have said their equity pledge risks were eased,

according to the paper's calculation. The option for large shareholders to

transfer equity, or the introduction of strategic investors, has become one of

the main ways for listed firms to resolve their pledge risks, the newspaper

said. (Link to the story: https://bit.ly/2R1z1Dp)

     Residential housing sales in tier-one cities fell 3% m/m in the first half

of November, with tier-three and tier-four cities suffering an even sharper 20%

fall, the Securities Daily reported on Wednesday, citing data released by

Shanghai E-House Real Estate Research Institute. Sales in second-tier cities in

the eastern region, mainly Qingdao, Hefei and Nanjing cities increased by 27%,

as tough regulations on pre-sell permits and online contract signing were

relaxed, the newspaper said. Developers will soon accelerate promoting new real

estate projects to help ease funding concerns. But the housing market will

continue to cool, as the recent regulation is unlikely to relax, the newspaper

said, citing Shen Xin, an analyst at E-House. (Link to the story:

https://bit.ly/2FByTJF)

--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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