MNI China Press Digest: Thursday, Dec. 14

     BEIJING (MNI) - The following are highlights from the China press for

Thursday, Dec. 14

     The reform movement to push mixed public-private ownership and

restructuring of state-owned enterprises will accelerate in 2018, the Economic

Information Daily reported Thursday. Regulators will enhance controls on SOE

funding, particularly for companies run by the central government. The new round

of mixed-ownership reform will focus on monopoly sectors including oil, gas and

railways, the report said, adding that sectors suffering excess capacity, such

as steel, coal and electricity generation, are also main targets. In the next

three years, deleveraging of SOEs finances will be stressed, which will impact

the overall level of fixed-asset investment, the report noted. (Economic

Information Daily)

     The momentum to tighten regulation of the asset management sector will not

change and regulators will remove asset management risks in an orderly and

steady manner, the Financial News, a journal run by the People's Bank of China

said in a commentary Thursday. Vested interest groups are trying to obstruct the

launch of the new regulations with the excuse that the new rules would cause

systemic risks, the commentary warned. Financial institutions will suffer some

short-term pain under the new regulations, and even see their asset management

businesses shrink, but regulators will not change course considering the

excessive financial market volatility that was triggered by the messy asset

management sector in recent years, the commentary stressed. (Financial News)

     China cannot simply follow the U.S government tax cut with one of its own,

as the country needs strong fiscal support and should maintain operating

efficiency improvement of state-owned enterprises as the top priority, the

Securities Times reported Thursday. China needs to increase its productivity and

maintain low aggregate costs to compete with the U.S, the report said. The U.S

can issue government bonds to supplement fiscal shortages and transfer crises,

but China can not. Chinese companies need to improve their core competitiveness

and should not rely on a tax cut, the report noted. In practice, China has

reduced its taxes by replacing the business tax with a value-added tax (VAT) and

removing many administrative fees, the report argued. (Securities Times)

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

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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