MNI China Press Digest: Wednesday, Dec. 13

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

Wednesday, Dec. 13

     The concentration of property developers is expected to increase next year

as sales slow down and fund-raising gets harder, the China Securities Journal

reported Wednesday. Property sales are expected to decelerate next year, which

will pressure smaller property companies, the report said. The leading companies

will ensure their growth through mergers and acquisitions, with the top 10

companies taking a 60% market share, the report said. There will be many

uncertainties in the property market outlook next year, but a sharp decline is

not possible, the report argued, adding that restrictions on mortgages and

purchases will continue to have their main impact on larger Tier 1 and Tier 2

cities. (China Securities Journal)

     China's fiscal deficit will remain below 3% of GDP in 2018 while issuance

of special local government bonds will expand, the 21st Century Business Herald

reported Wednesday, citing officials and analysts. Fiscal policy needs to be

proactive to offset the impact of corporate deleveraging and a slowdown in

household lending, the report said. Policy banks will continue to support

infrastructure investment and public-private partnerships will play a positive

role. The issuance of special local government bonds rose to CNY800 billion this

year from CNY400 billion in 2016. The growth of fixed asset investment in 2018

is predicted to be in a range of 7% to 8%, even approaching 10% if local

governments are active, compared with around an 8% increase this year, the

report said. (21st Century Business Herald)

     Tight interbank liquidity will be normal, at least until Chinese New Year,

due to restrictions on interbank and off-balance-sheet transactions and

expectations of Federal Reserve rate hikes, the China Securities Journal

reported Wednesday citing Yin Jianfeng, vice-director of the National

Institution for Finance and Development, an official agency run by the Chinese

Academy of Social Sciences. The current excessively high required reserve ratio

has resulted in large commercial bank liabilities being held at the central

bank, requiring the People's Bank of China to inject liquidity into the

interbank market, Yin argued. A RRR cut would be the basic solution to the

liquidity problem, he said. (China Securities Journal)

     Chinese regulators are resolute in their determination to tighten oversight

of the asset-management sector, even though some financial institutions have

reacted strongly and asked for a relaxing of proposed regulations, Caixin

magazine reported Wednesday, citing people with knowledge of the situation.

Regulators are determined to tame the country's $15 trillion asset-management

sector to rein in financial risks, Caixin said. Authorities will insist on

overarching rules and will brush aside resistance in the market, Caixin said.

(Caixin Magazine)

--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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