MNI China Press Digest, Sept 25: Trade, M&A, Deleveraging

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

Tuesday:

     Cooperation is the only choice for China and the U.S., said a white paper

on trade conflict between the two countries issued by the Chinese government,

Xinhua News Agency reported. Only win-win solutions can lead to the brighter

futures of both countries, the white paper said, according to Xinhua. China's

stance is clear, consistent and firm, as China has always defended global trade,

has insisted on tackling problems through negotiations, and has displayed

patience and sincerity in its talks with the U.S., the white paper said.

However, the U.S. has not shown enough respect and has imposed unilateralism,

protectionism and economic hegemonism on various countries, especially China,

the white paper said.

     China's state-owned companies are increasingly acquiring private companies

as the private firms are experiencing financial difficulties, 21st Century

Business Herald reported. More deal offerings emerge as private companies'

profit have been shrinking significantly in recent years, according to some M&A

employees of large SOEs who have spoken to the newspaper. Private firms are

facing difficulties due to industrial upgrading, increasing costs from stricter

environment protection requirements, and lenders being less willing to lend to

companies, the newspaper said. Meanwhile, SOEs are busy with their expansion

plans, with some large SOEs aiming to be one of the Top 500 companies in the

world, the newspaper said. However, some scholars have pointed out SOEs'

operation and management methods will stifle the vitality of private companies,

and that such M&A plans should allow half a year to a year of buffer time for

private firms.

     China needs to balance well between deleveraging and stabilizing its

economic growth, Securities Times reported. As the U.S. will continue to

challenge multilateralism and its trade actions will affect China's growth,

stabilising economic growth is the "priority of priorities" for China, the

newspaper said. Deleveraging will cause losses and fast bankruptcies, and

China's current deleveraging is more focused on decreasing leverage in companies

and governmental departments while leverage in households increases, the

newspaper said. China needs to strengthen regulations on local governments'

illegal financing and must steadily reduce leverage of households, it said.

--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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