MNI China Press Digest July 16: PBOC, AMCs, Sino-Australia

Highlights from Chinese press reports on Wednesday:

• The People’s Bank of China still has room for cuts in the reserve requirement ratio and interest rates, given low inflation, stable yuan and major economies’ rate-cutting cycle, said Sheng Songcheng, dean at the China Chief Economist Forum Institute. However, the PBOC needs to observe the effects of previous measures before launching new easing, while the timeframe for monetary policy transmission could be longer than the usual 3-6 months, if there is greater economic downward pressure, said Sheng. (Source: National Business Daily)
• Authorities have stepped up regulation on local asset management companies (AMCs) by establishing operational red lines to focus efforts on their core business of managing non-performing assets, 21st Century Business Herald reported, citing a new rule released Tuesday by the National Financial Regulatory Administration. The rule prohibits local AMCs from providing channels for local government financing vehicles to incur additional hidden debts, while also sets a leverage limit of three times net assets to prevent institutions from excessive debt expansion, the newspaper said.
• China and Australia will jointly review their decade-old Free Trade Agreement to identify areas for improvement or expansion, while continuing to implement the existing agreement, according to a Memorandum of Understanding signed by Commerce Minister Wang Wentao and Foreign Affairs and Trade Secretary Jan Adams, Yicai.com reported. Both sides agreed to further liberalise and facilitate trade and investment and provide a higher level of institutional guarantee for economic and trade cooperation between the two countries, the newspaper said.