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     BEIJING (MNI) - The following are highlights from the China press for
Thursday, Nov. 16
     The China Banking Regulatory Commission on Wednesday set new capital
adequacy guidelines for the government's three policy banks, the Financial News,
a journal run by the People's Bank of China, reported Thursday. The three policy
banks -- the China Development Bank, the Export-Import Bank of China, and the
Agricultural Development Bank of China -- have been highly reliant on bond
issuance due to a lack of other stable and low-cost capital sources, which harms
their capacity to withstand risks and restrains their sustainable growth, the
report said. This is the first time the government has imposed capital
requirements on the policy banks, the report noted. (Financial News)
     The modest growth of China's foreign exchange reserves in recent months is
hardly sustainable and has not created strong support to liquidity in the
interbank market, the China Securities Journal reported Thursday. The yuan
exchange rate is likely to suffer depreciation pressure and foreign exchange
reserves could decline in the period ahead given the Federal Reserve is expected
to raise its interest rate in December and capital outflows are likely to
increase at the end of the year, the report warned. The People's Bank of China
has reduced its intervention in the foreign exchange market, which means the
forex position will not see a big jump, the report argued. The open market
operations of the PBOC will focus on the effects of fiscal spending and the
forex position, so liquidity will remain tightly balanced, the report noted.
(China Securities Journal)
     It is time to build up a long-term property market mechanism to implement
the principle that a "house is for living in, not for speculating on", the
Economic Information Daily said in a front page commentary Thursday. The policy
and capital sides of the market are ready to launch such a mechanism, the
commentary argued. As financial deleveraging has progressed, the flow of capital
into the property market has been curbed and speculation has shrunk, the
commentary said. A series of new government policies, including those supporting
joint-ownership houses and rental housing, is optimizing housing resources.
Regulators have started to ban the use of consumer loans to acquire property, so
the property market is moving forward in a healthier way, the commentary
stressed. (Economic Information Daily)
     Credit risk is likely to increase in 2018 due to pressure from slowing
growth, falling producer prices and a peak in corporate profits, the 21st
Century Business Herald reported Thursday. As of the end of October, there have
been 32 corporate bonds defaults in both public and private markets so far this
year, the report said, citing China Chengxin International Credit Rating Co.,
the largest credit rating agency in China. The number of defaults have decreased
compared to 2016 due to better economic performance and improving industrial
profits, the report noted. But stricter financial regulation and a tight funding
environment will trigger more credit risk cases, the report warned. (21st
Century Business Herald)
--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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