MNI China Press Digest, Oct 24: Liquidity, Trade, Local Bonds

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

on Thursday:

     The PBOC isn't likely to conduct targeted medium-term lending facility

(TMLF) this week after having added significant liquidity by reverse repos, the

China Securities Journal reported citing analysts. With CPI at the government's

3% ceiling, the PBOC may feel constrained from using TMLF, as injecting

longer-term liquidity drives down long-term interest rate and weakens the yuan,

the newspaper said citing analysts including Xie Yunliang at Minsheng

Securities. The PBOC has injected net CNY500 billion via 7-day reverse repos so

far this week.

     China aims to further stabilize foreign trade by improving export tax

rebates, financing, credit insurance and other policies, as well as supporting

the central and western regions with developing processing trade, the State

Council said following its weekly executive meeting on Wednesday, according to a

statement on its website. China will increase the import of agricultural

products, daily consumer goods, equipment, parts and components to meet domestic

demand. The meeting also confirmed 12 measures to optimize foreign exchange

management and facilitate cross-border trade and investment, according to the

statement.

     Some Chinese provinces plan to issue special-purpose infrastructure-backed

bonds in Q4 under next year's quotas, which amount to as much as CNY300 billion

by Dec 31, the Shanghai Securities Journal reported citing a research by the

China Bond Rating Co. Jiangsu, Hubei, Jiangxi and Henan started a major project

boom at the beginning of Q4, the newspaper said.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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