MNI China Press Digest, Sep 3:Local Bonds, Liquidity, Property

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

Monday:

     Issuance of local government bonds hit its highest in almost two years last

month, Shanghai Securities News reported. CNY882.97 billion in local government

bonds were issued in August, the highest since July 2016; and the eventual

financing total reached CNY765.485 billion, the highest since September 2016,

the newspaper said, citing data from Wind Information. Local governments'

infrastructure investment also accelerated, with railway construction projects

in Changchun city and Suzhou city being approved, and investment reached

CNY173.732 billion in total, the newspaper said. Various cities and provinces

are discussing infrastructure projects to be made public within the end of the

year, the newspaper noted.

     The PBOC is expected to use quantitative monetary policies, such as

adjusting RRR and OMO, to maintain liquidity at a stable level, Securities Daily

reported. Liquidity is facing more uncertainties in September as banks are

facing macro-prudential assessments (MPA) at the end of the month, the U.S. Fed

is expected to increase its interest rate, and the stability of both the yuan

exchange rate and capital flows is facing some pressure, the newspaper said,

citing Wang Youxin, an analyst at a research institute under Bank of China.

Negotiable certificates of deposit maturities will peak this month, though

structural index adjustments of MPA will help reduce MPA pressure on banks, the

newspaper said, citing Ming Ming, analyst at CITIC Securities.

     Financing risks of Chinese medium- to small-sized property developers will

likely emerge later this year as financing pressures are increasing, Economic

Information Daily reported. As property policies are still strict and the

central government is working to curb housing price growth, these property

companies are at a disadvantage, particularly with consolidation within the

property sector accelerating, the newspaper said, citing industry insiders.

Policymakers should prevent illegal funds from flowing into the property market,

and should further guide expectations on property price and the development of

the property market, the newspaper said.

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

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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]