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MNI China Press Digest: Tuesday, Nov. 28

     BEIJING (MNI) - The following are highlights from the China press for
Tuesday, Nov. 28.
     The yuan will continue its two-way fluctuation and cross-border capital
flows will tend to be balanced in the period ahead, the Financial News, a
journal run by the People's Bank of China, reported in its front page Tuesday.
As China continues to open up its financial markets, economic growth remains
solid and market expectations for one-way volatility of the yuan fade, capital
flows will establish a stable momentum, the report argued. From the end of May
to early September this year, the yuan rose over 4,000 pips, which greatly
increased the credibility of China's yuan exchange rate policy but also created
challenges for export companies, the report noted. These companies should pay
attention to the management of their exchange rate risk, the report suggested.
(Financial News)
     The tight liquidity situation in the interbank market will ease this month
as the People's Bank of China continues its injections via open market
operations at a flexible pace and because fiscal spending is expected to
increase, the Financial News, a journal run by the central bank, reported
Tuesday. The volatility of liquidity increased in the third quarter due to
seasonal and temporary reasons, but the PBOC has enhanced its communications
with the market and strengthened the fine tuning of its policy. As a result, it
has maintained liquidity at a neutral and proper level, the report argued. The
central bank will continue to conduct 7-day, 14-day, 28-day and 63-day reverse
repo operations to guarantee the stability of the interbank market, the report
noted. (Financial News)
     Property market controls next year will focus on increasing housing supply,
the Economic Information Daily reported Tuesday. According to a meeting held in
Wuhan by the main regulators, including the People's Bank of China, smaller Tier
3 and Tier 4 cities in the western and central regions of the country will see
stricter property market regulations since the markets in larger Tier 1 and Tier
2 cities have gradually cooled down, the report said. The authorities will
tighten regulations given households' leverage ratio is surging, the central
government's tolerance for an economic slowdown is increasing, and a long-term
mechanism for the property market is needed, the report noted. (Economic
Information Daily)
     The China Bank Regulatory Commission will tighten regulations on city
commercial banks to prevent liquidity and credit risks, the 21st Century
Business Herald reported Tuesday, citing Cao Yu, vice-chairmen of the CBRC.
These regional banks are struggling to obtain deposits, particularly when
regulators are cracking down on interbank transactions as part of their
deleveraging campaign, the report said. According to the CBRC, assets of city
commercial banks increased 24.5% year-on-year to CNY28.24 trillion at the end of
2016, an asset growth rate 8.7 percentage points higher than the average of the
banking sectors, while their liabilities rose 25% to CNY26.4 trillion, the
report said. (21st Century Business Herald)
--MNI Beijing Bureau; +86 (10) 8532 5998; email:
--MNI BEIJING Bureau; +1 202-371-2121; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]
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