MNI China Press Digest, Sept 17: China-US, Liquidity, Rate Cut

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

on Tuesday:

     Liao Min, Deputy Director of the General Office of the Central Financial

and Economic Affairs Commission and Vice Finance Minister, will lead a team to

the U.S. on Wednesday for China-U.S. economic and trade talks, preparing the

ground ahead of the 13th round of trade negotiations set for Washington in

October, according to a statement on the website of the Ministry of Commerce. 

     Borrowing prices have not fallen sharply and some of the money market rates

have even risen after the recent reserve requirement ratio (RRR) cut, China

Securities Journal reported. The response is due to the tax season and large

amount of reserve repos maturing which have drained the liquidity released by

the RRR cut, the newspaper said. Going forward, there is still considerable

liquidity to be released by the RRR cut and fiscal spending in September, the

newspaper said.

     It is not in China's best interest to cut benchmark lending rates now, as

the economy needs room for a pick-up in inflation or a possible economic

downturn, China Securities Journal said in a commentary. There is theoretically

room for rate cuts of between 50 to 75 bps, not taking deposit rates into

consideration, the commentary said.

     The Saudi oil field attack will have a major impact on China's

petrochemical industries given that the Middle East is the biggest source of

China's oil imports, Securities Daily reported. China should use oil futures to

mitigate the impact on China's capital market, activate oil reserves, and deepen

energy cooperation with African states, the newspaper said citing Pan Xiangdong,

chief economist at New Times Securities.

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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