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MNI China Press Digest: Tuesday, Nov. 21

     BEIJING (MNI) - The following are highlights from the China press for
Tuesday, Nov. 21
     China's macro-prudential policy will establish credit and property prices
as anchors to stabilize the financial cycle, the Financial News, a journal of
the People's Bank of China, reported Tuesday. In today's financial situation, it
is a challenge for the PBOC to achieve its goal of stability in prices and the
financial sector. Analysts say a "two pillars" framework -- monetary policy and
macro-prudential policy -- will help guarantee proper liquidity conditions,
stabilize prices and output, curb price bubbles and prevent systemic financial
risks. Regulators need to coordinate the two pillars to accommodate economic and
financial cycles, the newspaper argued.(Financial News)
     Banks' wealth-management products would be overhauled to have longer
durations, higher thresholds of clients and lower leverage under draft
guidelines issued by top regulators, the 21st Century Business Herald reported
Tuesday. The guidelines mainly focus on implicit guarantees of payment,
leverage, channel transactions, multiple layers and capital pools. Mainstream
wealth-management products will be divided into two categories: fixed-asset
products and mixed mutual funds. Wealth-management products for high-level
clients will be allowed to invest in debt-to-equity swaps. Lower leverage will
benefit the long-term growth of the sector, the newspaper argued. Chinese banks
have issued wealth-management products totaling CNY30 trillion.  (21st Century
Business Herald)
     Mortgage rates for first-time home buyers in Beijing have risen 10% above
the benchmark interest rate as government controls on the property market have
continued to bite and credit from banks has shrunk, the Securities Daily
reported Tuesday. Some banks, with their credit quotas limited at the end of the
year, have even raised the rates by 40%. Even so, the approval procedure for
mortgages has been faster due to sluggish home sales in recent months, the
report said, citing unidentified people familiar with the information. In
October, the nationwide average mortgage rate was 5.3%, which was 8.2% above the
benchmark rate. Although the rise has slowed, the upward momentum remains
obvious, the newspaper said. (Securities Daily)
     In a measure of its economic efficiency, China can produce the same level
of output with less capital than the previous year for the first time in at
least a decade, Caixin Magazine reported on its website Tuesday. But as China is
still being pulled by competing needs -- economic growth, financial deleveraging
and social stability -- efficiency might again end up on the back burner, said
Michael Taylor, chief credit officer of Moody's Investors Service. Among the
competing needs, reform and rebalancing are less important, with the emphasis on
growth and stability, Taylor said. (Caixin Magazine)
--MNI Beijing Bureau; +86 (10) 8532 5998; email:
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
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