MNI China Press Digest: PBOC, Reform, Foreigners Buying Shares

     BEIJING (MNI) - The following highlights stories from the Chinese press on

Monday:

     The People's Bank of China (PBOC) may increase liquidity injection this

week to meet the rising demand for paying monthly taxes and scheduled larger

offering of government bonds, China Securities Journal reported. September's tax

due date is on the 17th, which usually strains liquidity in the two to three

days before and after, the journal said. Government bonds to be offered this

week may total CNY470 billion, the most in two years. There will also be more

reverse repo purchases maturing as well as increasing demand for cash before the

Mid-Autumn Festival weekend, prompting the central bank to take more open market

operations to reduce volatilities, the journal said. 

     Allowing qualified foreign nationals to directly participate in A-share

markets may help boost confidence in China's stock markets and shares of Chinese

assets in investors' portfolios, Securities Daily reported citing Fu Lichun,

research director of Northeast Securities. Starting Sept. 15, foreigners

residing in China, and overseas employees of A-share companies participating in

stock incentive programs can directly trade in Chinese stocks, the daily said

citing a regulatory document. The program isn't expected to funnel in large

capital given the number of such individuals is limited, the official security

newspaper said.

     China is expected to accelerate reform measures including reducing tax

burdens, making interest and exchange rates more market-based to better allocate

resources, limiting state ownerships to public welfare industries, and promoting

more participation of foreign capital in China's markets, the Economic

Information Daily reported citing officials including Yang Weimin, vice chairman

of the committee on economy of the legislative consultative body CPPCC. China

will emphasize structural reform over quantitative growth, the newspaper said

citing participants at the China Development Forum last week. 

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

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