MNI China Press Digest: Tuesday, Dec. 19

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

Tuesday, Dec. 19:

     President Donald Trump of the United States has said that China and Russia

are two "rival powers" seeking to "challenge American influence, values and

wealth," the South China Morning Post reported Tuesday. In his first national

security strategy speech, Trump accused the two countries of attempting to harm

U.S. security and said China and Russia "are determined to make economies less

free and less fair, to grow their militaries." Although Trump said the United

States would continue to seek to cooperate with China, he added that his

administration would raise America's competitive game, protect its interests and

advance its values. (South China Morning Post) 

     Zhu Baoliang, chief economist of the State Information Center under the

National Development and Reform Commission, predicts that China's economic

growth will reach around 6.5% next year, the China Securities Journal reported

Tuesday. Consumption will contribute more to gross domestic product growth, Zhu

said, with retail sales likely to increase by around 10%. As the global economy

increasingly recovers and domestic demand improves, export and import growth

will rise steadily -- growth in dollar terms is expected to rise 5% and 8.5%

respectively, Zhu added. Investment will slow, he said, tracking a decline in

the growth of infrastructure and property investment, with the latter possibly

falling to 6% growth. (China Securities Journal)

     China's property market is still sizzling as developers and speculators

remain positive about further growth, the Economic Information Daily reported on

its front page Tuesday. Data released by the National Bureau of Statistics show

that property markets in Tier-2 and Tier-3 cities continue to heat up, with

new-home prices in Tier-2 cities rising 0.5% in November compared with the

previous month, 0.2 percentage point higher than October. The numbers suggest

strong or even record-high sales nationwide. Ni Pengfei, director of the city

and competition research center at the China Social Science Academy, said that

strong policy controls are providing a brake but that the optimism of property

developers, financial institutions and speculators is creating risks. He pointed

out that homeowners' ratio of debt to disposable income had jumped to 90%

currently from less than 35% in 2007. He warned that room for homeowners' debt

to increase further was falling as newly added savings were slowing. (Economic

Information Daily)

     The yuan's tight range of fluctuation against the U.S. dollar is expected

to last for some time, the China Securities Journal reported Tuesday. As the

yuan's parity and exchange rate have both weakened slightly, traders said, the

strengthening of the dollar index has placed pressure on the parity, which on

Monday dragged down the exchange rate. The dollar lacks the momentum to

strengthen further, and the market does not have an obvious indication that the

yuan will appreciate or depreciate, traders said, which will result in a small

range of fluctuation. Shenwanhongyuan Securities predicted that the yuan

exchange rate would maintain relative stability and slightly strengthen. As

China's international payments continue to improve, it added, the exchange rate

could appreciate by 2% to 3% and the yuan could land somewhere between 6.40 to

6.48 against U.S. dollar. (China Securities Journal)

     The National Development and Reform Commission issued guidelines Monday to

set standards for private Chinese companies' outbound investment and operation.

According to a statement on the NDRC website, the guidelines require the

companies to strengthen risk controls and improve their preparation for possible

safety-endangering accidents.

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

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