Top Headlines in Chinas Market- Moody's very worried about how much leverage China is using for ECON Growth $CAF

China should impose more measures if the property market defies efforts to cool it; this People’s Daily article weighs on Chinese developers during Tues’ trading; a commentary in the People’s Daily said that gov’t measures to clamp down on housing are starting to show signs of progress; the article noted that transaction volumes have started to cool and that prices will also turn lower.  Reuters  http://www.reuters.com/article/idUSTOE67T09T20100831

· China & central bank – the country refutes market speculation that its central bank governor has defected; Japan’s financial regulator confirmed that its chief met with Chinese central bank governor Zhou Xiaochuan in Beijing yesterday, countering speculation that Zhou fled the country following steep losses on US Treasuries.  Bloomberg   http://www.bloomberg.com/news/2010-08-31/japan-regulator-met-zhou-in-beijing-dispelling-speculation-he-left-china.html

· China & central bank – Washington Post also says talk of Zhou’s defection aren’t true - Two knowledgeable government officials, speaking on condition of anonymity, said they had no evidence of Zhou's defection and that he was not in U.S. custody.  http://blog.washingtonpost.com/spy-talk/2010/08/zhou_xiaochuan_defection_rumor.html

· China to give state-run unions more power on compensation levels; the gov’t wants unions to have more says on pay and not be just proxies of the companies themselves – Reuters 

· China inflation – rising food prices is raising fear that Chinese inflation readings will continue to run above plan; this could force regulators to keep tightening measures in place or even impose new ones ,(the recent minimum wage increase was no accident)– DJ

· China FX – so much for yuan strengthening – the yuan is on pace for the largest monthly decline since ’94 - The yuan has declined 0.5 percent so far this month, trimming gains since the central bank ended a two-year dollar peg on June 19 to 0.3 percent – Bloomberg 

· China Housing Update – from R Li - Primary residential market sustained at previous week's level in key cities. Sales averaged 2,511 units/day in the eight cities we track, up 9% W/W, following a 21% increase in the week before. Volume has returned to the long-term (2008-09) average level. Sales continue to recover in most cities, with Beijing (excl. economic housing) up 53% W/W; Hangzhou up 47% W/W due to new launches from developers; followed by Chengdu (+28% W/W) and Shanghai (+12% W/W). Volume in other key cities changed by -13% to +1%. https://mm.jpmorgan.com/servlet/UserDocsHelperServlet?action=openpdf&docId=GPS-465992-0

· China Banking - the London Telegraph says that Moody's is growing concerned about China's eco growth outlook...Moody's worried that China is powering eco growth by raising leverage throughout the banking system - London Telegraph.  http://www.telegraph.co.uk/finance/china-business/7972070/Chinas-rising-bank-debt-could-leave-nation-exposed.html

· China – Upheld an Apr. ruling and imposed punitive tariffs on imported US chicken, arguing that the US products were subsidized. The anti-subsidy tariff will range from 4-30% and will be retroactively applied to US exports from Aug 30th.  Bloomberg

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