MNI China Press Digest, Sept 7: Banks, Property

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

Friday:

     Chinese commercial banks, particularly the big ones, are increasing their

capital as they are increasingly facing liquidity pressures, China Securities

Journal reported. Within a week, Tier-2 capital bonds issued by commercial banks

exceeded CNY90 billion, the newspaper said. The increase in capital bonds is due

to the government's stricter regulation requiring banks to move

off-balance-sheet businesses back to the balance sheet, while China's recent

easing policies are also pressuring banks to increase lending, the report said,

citing the analysis of Everbright Securities. Supply of banks' capital bonds are

expected to increase within this year, the report said, citing analysts.

     Despite an increase in onshore bond issuance, the finances of Chinese

property developers are still tight, 21st Century Business Herald reported.

Property companies of different sizes vowed to deleverage and seek cash returns

at their half-year result conferences this year, the newspaper said. Several

companies predict financing costs will continue to rise for them over the rest

of the year, the report said. Chinese banks are following the central

government's policy to strictly control credit flowing to the property market,

which is weighing down development of the sector, the newspaper said, citing a

bank manager. Developers issued CNY25.1 billion and CNY16.7 billion bonds

onshore in July and August respectively, higher than CNY11.1 billion in June.

     The central government is encouraging private capital to invest in the

infrastructure of China's western provinces, Economic Information Daily

reported. The State Council has dispatched officials to closely monitor and

guide development projects in the western areas, the newspaper said. Around 13

western provinces, including Ningxia, Sichuan, Yunnan, Shaanxi, Qinghai,

Xinjiang and Guangxi, are speeding up investment of significant infrastructure

projects, with some governments specifically setting up faster channels for

approval of the projects, the report said. Highways, railways, private airlines,

water improvement and energy are the major focuses of these projects, it said.

Governments are issuing various policies to attract private capital -- for

example, Ningxia is planning to announce a negative list for private investment

to clear up the previously hidden barriers for private investors.

--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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