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From overseas media: Foreign exchange rates, SOEs, and pollution

chinadaily.com.cn | Updated: 2017-03-10 16:51

Overseas media paid close attention to comments from Zhou Xiaochuan, governor of China's central bank, who addressed questions about the foreign exchange rate, debts, and deleveraging at a press conference on Friday. Topics about State-Owned Enterprises and air pollution from Thursday's news conferences also made headlines.

Foreign exchange rate

People's Bank of China Governor Zhou Xiaochuan said the yuan's rate should be relatively stable this year even as rising US interest rates contribute to foreign exchange volatility.

--Bloomberg

Foreign reserve

On the US-China interest rate difference, Zhou said it was true that in the short-term, money flowed to countries where interest rates were higher. But for the medium-term, countries decide their interest rates based on economic growth, employment, confidence and inflation.

--South China Morning Post

Monetary policy

Zhou reiterated that policy makers will seek prudent and neutral monetary policy and said that doing so will help push forward supply-side reforms. He said the central bank has many tools to choose for policy and that those instruments will lead market expectations.

--Bloomberg

Central bank transition

China's central bank is halfway through a transition from a system based on the quantity of money to one centered around the price of money. The PBOC is using both benchmark interest rates and newer tools such as the seven-day reverse repurchase rate to adjust policy.

--Bloomberg

Foreign investment by domestic firms

Zhou Xiaochuan has defended China's strict new capital control regime as a "normal" response to "over-the-top" overseas investments by Chinese companies and individuals.

"Some people [invested offshore] blindly and were in a rush to do so," the central bank governor said on Friday... "Some of this outbound investment was not in line with our own policies and had no real gain for China."

--Financial Times

Corporate debt

China's corporate debt levels are excessively high, the head of its central bank said on Friday, as policymakers in the world's second-largest economy grow increasingly concerned about the risks from a rapid build-up in debt and an overheating housing market.

Banks cannot support firms with high leverage, People's Bank of China Governor Zhou Xiaochuan told reporters at a news conference on the sidelines of the annual parliament session.

But Zhou stressed that China's efforts to cut debt levels will take time, describing it as a medium-term process.

--Reuters

Restructuring SOEs

China will move forward with restructuring central government enterprises this year, and focus on the steel, coal, heavy equipment and coal-fired power sectors, the head of the state asset regulator said on Thursday.

China has pledged to make further cuts in excess and inefficient capacity in "smokestack" industries and the mining sector as part of an effort to upgrade its economy and reduce pollution, but the move threatens to throw millions out of work.

Reemployment of laid off workers is a priority in the restructuring of state firms, Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission (SASAC), told a news conference.

--Reuters

SOEs rebound

China's business environment has improved, with coal and steel prices rising thanks to cuts to excessive production capacity. Industry realignment and management reform have boosted the competitiveness of state-owned companies, Xiao said.

--Nikkei

Smog

China still has work to do in cleaning up its skies, with poor enforcement of environmental laws and inadequate monitoring in some places, the environment minister said on Thursday, as the country enters its fourth year of its "war on pollution".

Minister of Environmental Protection Chen Jining said there had been faster progress in fighting pollution than in developed countries, but China still needed to do more in getting firms and local authorities to toe the line.

--Reuters

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