MNI China Press Digest, Sept 5: FX, Bond, Africa

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

Wednesday:

     China should protect its foreign exchange reserves and not sacrifice it for

stabilizing the yuan, Economic Information Daily reported citing Li Yang, an

economist at Chinese Academy of Social Sciences and a former member of the

People's Bank of China's Monetary Policy Committee (MPC). China values yuan

exchange rate formation mechanism and its reform more than the level of exchange

rate, Li said. China should reduce the impact of speculative international

capital on its economy, Li noted. The PBOC should not intervene in the FX system

but let the market decide the exchange rate, the newspaper said citing economist

Yu Yongding, who is a former member of the PBOC's MPC.

     Investors may continue to be bullish on Chinese bonds even with the

increased supply of local government bonds, China Securities Journal reported.

Yield on China Government Bond rose about 19 basis points in almost a month due

to surging supplies of local government bonds, the newspaper said citing

industry insiders. The economy, not bond supply, decides bonds' longer-term

performance, the journal said. Investors may be bullish on bonds given China's

"prudential and neutral" monetary policy and slowing economy, the journal said

citing analysts including Ming Ming at Citic Securities.

     Chinese President Xi Jinping announced an eight-action plan for future

development of relations with Africa, the Economic Information Daily reported.

The plan covers industrial capacity improvement, infrastructure, trade, green

development, capacity building, healthcare and sanitation, cultural exchange and

security. China and Africa will nurture growth in the new economy and facilitate

cooperation, the newspaper said.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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