MNI China Press Digest, Sept 10: Special Bonds, Trade War

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

Monday:

     Chinese local governments are expected to issue more than CNY500 billion in

special bonds in September to boost infrastructure investment, Economic

Information Daily reported. Some CNY428 billion in special bonds were issued in

August, according to the newspaper. Most of the money raised by the issuance

will be used in infrastructure investment, especially after the central

government frequently issued documents to encourage such issuances in August,

the newspaper said. The funds of the bonds already issued have been used in

municipal public projects, transportation and government-subsidised housing

projects, the newspaper said, citing experts including researcher at China

International Futures Corporation.

     A y/y economic growth of 6% and a floating exchange rate would enable China

to withstand external shocks, said Zhou Xiaochuan, former head of the PBOC,

according to CNBC. External shocks would have less than 0.5% of an impact on the

Chinese economy based on the calculations of a mathematical model, Zhou said.

China should switch its exports to countries other than the U.S. as soon as

possible, Zhou said, which is also the advice the PBOC gave to Chinese President

Xi Jinping. In the worst case scenario in which China does not export goods to

the U.S., China would benefit from quickly diversifying its export markets, Zhou

noted.

     Chinese companies' mergers and acquisitions of American companies has

cooled down during the trade war, 21st Century Business Herald reported. In the

first half of this year, Chinese companies successfully acquired only 22

American companies -- a large drop from previous years, the newspaper said,

without specifying previous numbers. Trade conflicts and regulators' national

security concerns caused delay and the slow approval of the M&A cases, the

newspaper said, cited law firms. Some American companies cancelled their ongoing

M&A discussions amid concerns regarding the U.S. government's tightening

regulations on acquisitions by Chinese companies, the newspaper said, citing

unidentified bankers and lawyers.

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

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

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