MNI China Press Digest, Sept 26: De-leveraging, Loans, Fiscal

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

on Thursday:

     China should continue with its structural de-leveraging because high levels

of leverage create macroeconomic and financial vulnerabilities, according to a

report in the PBOC-operated Financial News. Citing Dong Ximiao, a researcher at

the National Institution for Finance & Development, the report says that

monetary policy should remain stable as macro leverage ratios rise. Dong said

that Chinese policy should avoid the pursuit of stimulus with a "flood of

credit" and financial resources should be withdrawn from inefficient sectors.

     Some city commercial banks are now required to reduce lending to borrowers

in other cities in favour of increased lending to locals, 21st Century Business

Herald reported late Wednesday. Citing an unnamed source from a commercial bank

in Southeast China, the Herald report said banks have been ordered to cut the

amount of non-local lending this year to below 2018 levels, and keep it below

50% of total loans by the end of this year.

     China should urgently optimise its fiscal revenue collection and

expenditure as its finances were impacted by the ongoing cuts in taxes and fees,

China Business News said in a commentary. The government should boost revenue by

increasing the share of profits collected from specific financial institutions

and state-owned enterprises, while urging local governments to cut general

spending by more than 10%, the commentary said.

--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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