MNI China Press Digest, Oct 12: PBOC Head, Local Debt, Trade

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

Friday:

     China's economy is currently operating smoothly, and the growth target set

at the beginning of this year can be achieved, said Yi Gang, the governor of the

People's Bank of China, according to the newspaper Securities Daily. The macro

leverage ratio has stabilised, while the leverage ratio of state-owned

enterprises has continued to decline, said Yi during the 2018 Annual Meetings of

the International Monetary Fund and World Bank Group in Bali on Thursday. The

local government debt is controllable, the balance of payments is generally

balanced, and financial risks are generally controllable, Yi added, before

concluding that China's economic structure has been optimised and has entered a

stage of high-quality development. The central bank's monetary policies will

serve the domestic economy first, Yi stated.

     Local governments are looking extensively into the current debt situation,

working on solutions to tackle local debt risks, and must report their findings

to the Ministry of Finance by the end of this month, reported Economic

Information Daily, citing an anonymous insider. The inspection will focus on the

total amount, category, structure and region of local debts, as well as the use

of implicit debts, which refers to what the local government borrows out of the

debt limit, the Daily said. Local governments have been ordered to resolve debt

stocks and strictly control debt increments; and are forbidden from borrowing

illegally using financing guarantee or disguising implicit debts in the form of

public-private partnership or government procurement, the newspaper said.

     The multilateral trade system is the most effective way to contain the

risks of the global financial system and therefore must be upheld by all

countries, said Wang Yong, a professor at the central bank's Zhengzhou Training

College, in an opinion piece published by Shanghai Securities Journal on Friday.

The weakening of the outlook for global economic growth is partly due to the

sharp rise in trade policy uncertainty over the past year, Wang said. Escalating

trade tensions and the resulting policy uncertainty may dampen commercial and

financial market sentiment, trigger financial market turmoil and slow investment

and trade, Wang said, citing an IMF report, and added that the increase in trade

barriers will undermine global supply chains, hinder the spread of new

technologies, and ultimately lead to a decline in global productivity and

welfare.

--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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