MNI China Press Digest, Oct 11: Yuan, China-US, Leverage Ratio

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

Thursday:

     The yuan exchange rate will fluctuate at a balanced and reasonable level,

and there is no room for significant depreciation, said Wen Bin, the chief

analyst at China Minsheng Bank, in an interview with Securities Daily. China's

various macro-control policies are in place and domestic demand is expanding.

Thus, it is expected that the macroeconomy will remain stable in the fourth

quarter, Wen said. Both the international balance of payments and cross-border

capital flow also remain balanced, Wen added. The volatility of the yuan

exchange rate has increased significantly in the second half of this year, which

may cause the rate to fall below the barrier of 7.0, said Ming Ming, the

fixed-income chief analyst at CITIC Securities to the Securities Daily.

     US Vice President Mike Pence's speech about China is "a big joke" that

discredits and demonises China, said Jia Xiudong, a distinguished research

fellow at the China Institute of International Studies, in a front-page

commentary piece in the People's Daily Overseas Edition. China has no intention,

no interest and no habit of interfering with US elections or any other internal

affairs, the piece stated, arguing against Pence's accusations of China in his

speech. In the context of the China-US trade war, Pence's comments on America's

China policy reflect the negative attitude and the difficult stance that the US

has taken on China-related issues, which will undoubtedly exacerbate the tension

between the two countries, Jia said.

     The theory that the next global financial crisis will start in China is

groundless, said the Economic Daily in an opinion piece. Predictions regarding

China's crisis focus on the nation's currently high leverage levels. For more

than a decade, predictions have shifted from expecting a hard landing in the

Chinese economy, to expecting systematic financial risks, the newspaper said.

The growth rate of China's macro leverage ratio has slowed significantly. In

2017, it was 10.9 percentage points lower than the average annual growth rate

from 2012 to 2016. In the first quarter this year, it was 1.1 percentage points

lower than that of the same period last year. This shows China's structural

deleveraging campaign has taken effect, Economic Daily said.

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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