MNI China Press Digest, Sept 20: Rate Cut, Reform, PBOC Bills

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

on Friday:

     China does not need to cut interest rates in the short term, even though

cuts by the U.S. Federal Reserve leave more room for the PBOC to follow suit,

Securities Daily reported. The newly implemented LPR pricing mechanism is not

yet mature, the Daily said, and lowering interest rates so soon after the recent

reserve requirement ratio cut would intensify expectations of further easing.

This would in turn increase the market's dependence on rate cuts and undermine

the effect of monetary policy, the newspaper said citing Tao Jin, a senior

researcher at Suning Institute of Finance.

     The Shanghai Head Office of the PBOC said it will encourage investment from

multinational companies in the new Lingang area of the Shanghai Pilot Free Trade

Zone through major financial reforms, China Business News reported. The report

said the PBOC reforms would comprise the simplification of cross-border yuan

business and the facilitation of trade and investment.

     The PBOC is planning to issue CNY10 billion of six-month central bank bills

in Hong Kong on September 26 with the aim of improving the yield curve of yuan

bonds in the Territory, according to a statement on the PBOC website.

--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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