MNI China Daily Summary: Friday, December 13

     BEIJING (MNI) - EXCLUSIVE: Chinese authorities may step in to help

over-stretched big companies meet dollar bond payments if they pose systemic

risk but even some state-owned enterprises might be left to cope on their own as

the country's corporate sector faces a maturity spike next year, policy advisors

and market participants told MNI. Several state-backed firms have already missed

dollar repayments in 2019, with Moody's reporting over USD6 billion of offshore

defaults so far. The next 12 months will see a bulge in maturities at a time

when the authorities may be straining to keep the economy growing at 6%.

According to Moody's, about USD78 billion in non-financial corporate dollar

bonds will come due, together with about USD60 billion in debt sold by financial

institutions. Of these maturing bonds, about USD8.4 billion are yielding above

15%.

     POLICY: China will pursue a "reasonable quantity and steady improvement in

quality" of growth next year, with policies kept stable at the macro level and

flexible on the micro scale, according to a statement released by Xinhua News

Agency on Thursday following the Central Economic Work Conference. 

     POLICY: China's leadership emphasized stability and growth during a key

economic meeting this week, suggesting policymakers will seek to ensure growth

will be at least 6% in 2020, according to a report from China Finance Forum 40,

a think tank whose members include government officials. The growth target is

likely to be "defending 6%".

     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations

for the 18th day, leaving liquidity unchanged with no reverse repos mature

today, according to Wind Information. Total liquidity in the banking system is

reasonable and ample, PBOC said.

     RATES: The seven-day weighted average interbank repo rate for depository

institutions (DR007) increased to 2.4122% from Thursday's close of 2.3067%, Wind

Information showed. The overnight repo average rose to 2.1268% from Thursday's

2.0490%.

     YUAN: The currency strengthened to 6.9839 against the dollar from

Thursday's 7.0333 close. PBOC set the dollar-yuan central parity rate lower for

a fourth day at 7.0156, compared with Thursday's 7.0253.

     BONDS: The yield on 10-year China Government Bonds was last at 3.1975%, up

from Thursday's close of 3.1850%, according to Wind Information.

     STOCKS: The Shanghai Composite Index rallied 1.78% to 2,967.68, as U.S.

President Donald Trump suggested a trade deal with China is near in a tweet.

Hong Kong's Hang Seng Index jumped 2.57% to 27,687.76.

     FROM THE PRESS: China may pursue easing policies in 2020 at a slower pace

than this year through reserve requirement ratio or interest rate cuts, with

PBOC employing more structural tools such as pledged supplementary lending

(PSL), the Securities Times reported citing Ming Ming, the deputy director of

the research department at CITIC Securities.

     China will introduce policies to create jobs and ensure a stable market,

address job losses in labour-intensive trade-related companies and the

employment of jobless migrant workers returning homes, the China Securities

Journal reported citing Zhang Chenggang, the director of the China New

Employment Research Center at the Capital University of Economics and Business.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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