MNI China Press Digest, Oct 13: Yuan, Growth, Balance Pmts

MNI (Beijing) - The following lists highlights from Chinese press reports on Tuesday:

The yuan's long-term appreciation may be dampened after the PBOC this week removed forex risk reserves for banks, a measure which encouraged yuan transactions, the Securities Daily reported on Tuesday citing Lian Ping, an economist from Zhixin Fund. Both onshore and offshore yuan rates dropped on the first day after the announcement. The PBOC may consider cutting countercyclical factors if the yuan continues to gain in the near term, thus avoiding one-way expectations and negative impacts on the export sector, Lian said. He said the FX risk reserve cuts should help businesses to counter currency risks using forward FOREX trading.

China will continue with stable economic reform measures such as tax and fee cuts, boosts to consumption, and the opening-up of markets to ensure growth goals are met this year, Premier Li Keqiang told provincial governors on Monday, according to a press statement. Li stressed fiscal funds must be channeled to small businesses in difficulties, and any arbitrary charges and tax burdens should be forbidden. China should find new growth drivers in consumption and provide a suitable business environment to enhance market vitality, while ensuring the smooth operation of industrial chains to further support market opening and boost foreign trade and investments.

China should encourage foreign investments in its securities markets to maintain the future balance of payments, China Securities Journal reported citing economist Zhang Anyuan. The current trade surplus alone cannot sustain the balance of payments, which could come under pressure once overseas travel resumes, said Zhang, an economist with China Securities. China should also contain leverage ratios, such as promoting equity financing, given the fact that these real economic channels have risen 21 percentage points in H1, Zhang said.