MNI China Press Digest, Nov 7:Special Bond, Small Bank, Fiscal

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

on Friday:

     Issuance of China's infrastructure-backed special-purpose bonds is expected

to be in excess of CNY3 trillion next year, Securities Daily reported. Citing

Tao Jin, a senior researcher at Suning Institute of Finance, the Daily's report

says it is unlikely that some of next year's issuance will be moved into this

year, as infrastructure investment growth is still relatively low.

     China's small and medium-sized banks are likely to increase the issuance of

subordinated bonds, preferred stock and perpetual bonds to replenish their

capital, 21st Century Business Herald reported. Citing analysts, the Herald's

report said shareholders' capital injections and the introduction of external

investors may also help to improve the capital position of small banks facing

tighter regulations on non-performing loans and requirements to boost lending.

     The Chinese central government has increased fiscal support to some local

governments through transfer payments from next year's quota, Economic Daily

reported. Included are CNY84.7 billion to ethnic regions, CNY18.43 billion to

border provinces and CNY15.07 billion to counties which made major contributions

to the Chinese Revolution. The front-loading of the transfer payments aims to

cover local government spending on the public service, the newspaper said.

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

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

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