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MNI China Press Digest, Sept 6: Yuan, Inflation, Property

     BEIJING (MNI) - The following lists highlights from the Chinese press for
Thursday:
     China should steadily push the market-based reform of its foreign exchange
forming mechanism and not rush to realize the free floating of the yuan, China
Securities Journal reported. China should reduce direct interventions in the FX
market and match the rate of reform with the speed of overall opening up, said
Xie Fuzhan, head of Chinese Academy of Social Sciences. A free-floating currency
isn't realistic or ideal, while floating based on certain management is
realistic, the journal said citing Ding Zhijie, deputy head of University of
International Business and Economics.
     Inflation in China will likely remain benign in the near term given a
softening demand in a slowing economy, the Economic Information Daily said in a
commentary. Policy makers will want to avoid flooding the market with liquidity
while pushing to contain local government debt, so consumer prices are not
likely to gain. M1 growth has been slower than M2 for six months, so inflation
isn't likely to spike: the daily said.
     China's local governments can ease polices for reducing property
inventories in their regions given the need to boost growth, the Securities
Daily reported. The Politburo Meeting in July and meetings held by the housing
ministry in August didn't mention property inventory reduction, the newspaper
said. Inventory reduction programs have had some success, it 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
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

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