MNI China Press Digest, Sept 23: PBOC, Liquidity, China-U.S.

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

on Monday:

     The PBOC will not change its prudential monetary policy even though it has

lowered the reserve requirement ratio (RRR), said the PBOC-run newspaper

Financial News in a commentary. The RRR cut has reduced borrowing costs for

financial institutions and increased market liquidity, the newspaper said. The

PBOC will focus on improving the transmission mechanism of monetary policy so

that enterprises can benefit from the injection of liquidity, according to

Financial News.

     Inter-bank market liquidity is expected to recover in the first half of

October as fiscal spending at the end of the quarter would increase liquidity,

China Securities Journal said in a commentary. The tax season and financial

supervision at the end of Q3 had dampened banks' willingness to lend and had

seen borrowing costs rise, the Journal said. The commentary noted that

considerable liquidity had been released by the recent cut in the reserve

requirement ratio, the renewal of medium-term lending facility and the injection

of reverse repos.

     China and the U.S. should suspend the current trade dispute and seek a

broad consensus to break the deadlock, People's Daily said in a commentary on

its WeChat account on Saturday. The Daily's commentary, which came after the

U.S. granted tariff exemptions to over 400 Chinese goods, said the two countries

needed to move forward with respect for each other's differences. China would

not make concessions on its core interests, the commentary said, and this was a

conviction supported by the resilience shown by the Chinese economy in the past

year, and its future potential.

--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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