MNI China Press Digest, Nov 5: Yuan, Fiscal Policy, Open-Up

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

Tuesday:

     China's yuan could rebound against the dollar in the near term due to

market expectations that China's economy will stabilize in Q4, according to a

report in the China Securities Journal. Citing unnamed analysts, the report said

the weakening U.S. economy would also see the dollar index weaken. The PBOC's

scheduled issuance of central bank bills in Hong Kong on Thursday would solidify

expectations that the currency would appreciate, the newspaper said. The yuan

dollar pair has been trading stronger than the central parity rate set by the

PBOC since end-October, and the gap between onshore and offshore yuan has been

narrowing, the Journal's report said.

     China needs further synergy between monetary and fiscal policy to stabilize

development and push forward economic reforms, People's Daily said in its

commentary Tuesday. Fiscal policies, such as tax cuts and special bond issuance

by local governments, should work together with monetary policies to better

develop the economy and prevent financial risks, the newspaper said.

     China will relax restrictions on foreign shareholdings and support the

participation of financial institutions in the establishment of commercial banks

and financial subsidiaries, according to website http://www.cnstock.com. The

site quoted Huang Hong, vice chairman of the China Banking and Insurance

Regulatory Commission, as the source for its article published Tuesday.

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: flora.guo@marketnews.com

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

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