UPDATE 1-PRESS DIGEST - China - May 5

(Adds items)

BEIJING/SHANGHAI, May 5 (Reuters) - Chinese newspapers available in Beijing and Shanghai carried the following stories on Monday. Reuters has not checked the stories and does not vouch for their accuracy.

FINANCIAL NEWS

-- The China Securities Regulatory Commission said mainland fund management firms could set up representative offices, branches or subsidiaries in Hong Kong as part of the Closer Economic Partnership Agreement.

-- The Agricultural Bank of China, the only big state lender yet to be listed, said its non-performing loans dropped 7.3 billion yuan ($1.05 billion) by the end of March from the level three months earlier. The paper did not give a specific figure for the sour loans either as of the end of March or at the end of 2007.

-- China has total gold reserves of 15,000 to 20,000 tonnes, ranking the seventh in the world, Hou Huimin, vice president of China Gold Association, said at a conference in Shanghai.

CHINA DAILY (www.chinadaily.com.cn)

-- The China Philharmonic Orchestra will perform for Pope Benedict XVI on Wednesday at the Vatican, as part of its tour of European cities.

-- China's customs authorities have stepped up efforts to block illegal grain exports by traders who hope to cash in on high global prices.

PEOPLE'S DAILY

-- Chinese President Hu Jintao said he believed disputes over joint exploration of oil and natural gas resources in the East China Sea, between China and Japan, could be resolved. He made the remarks in an interview with Japanese journalists prior to his visit this week.

CHINA SECURITIES JOURNAL

-- China Construction Bank said in a research report that the chances of an official interest rate hike were shrinking because the effectiveness of higher rates in curbing investment growth and inflation was decreasing. But it said a hike was possible in the second quarter, predicting medium- and long-term deposit and loan rates would be raised by less than one-year rates, while the sight deposit rate would be kept unchanged.

-- The China Banking Regulatory Commission said in a report that liquidity management was becoming more difficult for Chinese banks, and that small and medium-sized banks faced an increasing risk of not being able to obtain enough liquidity.

-- The National Development and Reform Commission will this month launch a national investigation into violations of rules on the charging of telecommunications fees.

SHANGHAI SECURITIES NEWS

-- Ningbo Fuda Co (600724.SS) said it would swap assets with its parent company and issue as many as 1.2 billion new shares to the parent in order to obtain about 8 billion yuan ($1.1 billion) worth of real estate assets.

-- Officials at the China Securities Regulatory Commission said their studies showed pressure on the stock market was not so strong from follow-on share issues and institutions selling shares freed up by the expiry of lock-up periods.

SECURITIES TIMES

-- Openings of new securities investment accounts have increased sharply since authorities cut the stock trading tax late last month. A total of 422,938 new A-share accounts were opened in the weak of April 21-25, up from 264,630 in the previous week. ($1 = 7.00 yuan)