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     TOP NEWS: President Xi Jinping said China is willing to resolve the
economic and trade differences and frictions with the U.S. through cooperation
in ways both sides can accept, according to a statement on the mobile App of
China Central Television. Xi spoke while meeting U.S. Trade Representative
Robert Lighthizer and Treasury Secretary Steven Mnuchin in Beijing on Friday,
CCTV said.
     TRADE: China has requested an extension of trade talks with the U.S. beyond
a March 1 deadline, with the intention of finalizing a deal later at a meeting
between presidents Xi Jinping and Donald Trump, a source briefed by both
governments on progress of negotiations told MNI Thursday. The source, who
requested anonymity, claimed not have heard about a 60-day extension which
Bloomberg reported to have been proposed by the U.S. side. Officials have not
yet discussed specific language for a draft agreement, the source told MNI. But
both sides are moving towards making concessions, with the U.S. government
realizing it will be unable to obtain all it wants in the current 90-day
negotiation period while China has shown willingness to further accelerate the
process of opening up its markets and to increase purchases of U.S. goods and
services.
     DATA: New loans totaled CNY3.23 trillion in January, outpacing the CNY3.0
trillion projected by an MNI survey and the CNY1.08 trillion recorded in
December, hitting a historical high, data released by the People's Bank of China
(PBOC) today showed. Aggregate financing to the economy also surged to a record
high of CNY4.64 trillion from CNY1.59 trillion in December, beating projected
CNY3.3 trillion. M2 grew by 8.4% y/y in January, higher than forecast 8.2%
forecast and 8.1% in December.
     DATA: Producers price index (PPI) rose just 0.1% in January over a year
ago, decelerating from the 0.9% gain in December, according to data released by
the National Bureau of Statistics (NBS). It was the lowest level since September
2016 and below 0.3% projected by economists surveyed by MNI. Consumer price
index (CPI) rose 1.7% y/y vs forecast 1.8%. It was the slowest pace since
November 2017 and down from 1.9% in December. 
     LIQUIDITY: The PBOC skipped open market operations for a fifth day,
resulting in a net drain of CNY90 billion as that amount of reverse repos
matured, according to Wind Information. The PBOC said the total liquidity of the
banking system is currently at a reasonable and ample level, able to offset cash
withdrawals, maturing reverse repos and financial institutions' payment of
reserve requirement.
     RATES: The 7-day weighted average interbank repo rate for depository
institutions (DR007) increased to 2.2174% from Thursday's close of 2.1883, Wind
Information showed. The overnight repo average decreased to 1.7096% from
Thursday's 1.7098%. 
     YUAN: The yuan depreciated against the dollar to 6.7802 from Thursday's
close of 6.7701. The PBOC set the dollar-yuan central parity rate at 6.7623 on
Friday, stronger than the 6.7744 set on Thursday.
     BONDS: The yield on 10-year China Government Bond was last at 3.085% from
the close of 3.10% on Thursday, according to brokers.
     STOCKS: The benchmark Shanghai Composite Index closed 1.37% lower at
2,682.39. Hong Kong's Hang Seng Index fell 1.87% to 27,900.84.
     FROM THE PRESS: China's financial services industry must fully support
private enterprises boosting their direct financing, the State Council said late
Thursday. The authorities must accelerate the progress of IPOs and refinancing
reviews for private companies, support non-listed private firms to issue private
convertible bonds, and encourage financial institutions to increase investment
in private corporate bonds and expand credit supply to private and small firms,
the guidance said.
     The Chinese economy may achieve a soft landing within three years, China
Securities Journal reported today, citing Hua Changchun, chief economist at
Guotai Junan Securities. Improved productivity driven by supply-side reform, the
rise of high-end manufacturing industry, the growing demand of big data and
artificial intelligence, as well as the formation of city clusters will support
the transformation and long-term development of the Chinese economy, the paper
said citing Hua.
     China's luxury housing market is cooling, as the transaction of luxury
homes in tier-one cities totaled just 6,269 units last year, less than 30% of
that in 2016, 21st Century Business Herald reported, citing data released by
China Real Estate Information Corp., a Nasdaq-listed real estate research firm.
Investors have a lower appetite with the downturn and tighter credit curbing
demand, the newspaper said.
--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
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]