MNI China Daily Summary: Friday, February 21

     BEIJING (MNI) - EXCLUSIVE: Local governments in some Chinese regions are

set to ramp up sales of land to support developers at a time when the economy is

struggling under the impact of coronavirus and to bolster their own finances as

the epidemic pushes up spending, government advisors told MNI.

     POLICY: China's import and export growth in the first two months of 2020 is

likely to fall sharply as the coronavirus epidemic poses severe challenges to

foreign trade, said Li Xingqian, head of the Foreign Trade Department of the

Ministry of Commerce at a briefing today. "The impact on foreign trade in the

first quarter should not be underestimated, but it is still tolerant," said Li,

adding that the ministry is confident and remains moderately optimistic in its

outlook for the year.

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

for the fourth day, leaving liquidity unchanged, according to Wind Information.

Total liquidity in the banking system is at a reasonable and ample level, PBOC

said on its website.

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

institutions (DR007) fell to 2.0780% from Thursday's close of 2.1060%, Wind

Information showed. The overnight repo average decreased to 1.3429% from 1.3794%

on Thursday.

     YUAN: The currency weakened to 7.0386 against the dollar from Thursday's

close of 7.0153. PBOC set the dollar-yuan central parity rate higher for a

fourth trading day at 7.0210 compared with 7.0026 on Thursday, the weakest

fixing since Dec 12, 2019.

     BONDS: The yield on 10-year China Government Bonds was last at 2.8725%,

down from Thursday's close of 2.9050, according to Wind Information.

     STOCKS: The Shanghai Composite Index edged up 0.31% to 3,039.67. Hong

Kong's Hang Seng Index lost 1.09% to 27,308.81.

     FROM THE PRESS: China's credit expansion in Q1 is expected to decline from

January's record due to the disruption of the epidemic, and will likely rebound

in Q2, the China Securities Journal said citing Zhao Wei, chief macro analyst at

Changjiang Securities. The CNY3.34 trillion in new loans in January was due to

lower lending rates, ample liquidity and greater local government bond

issuances, the journal reported citing Ming Ming, chief fixed-income analyst at

CITIC Securities. 

The Ministry of Transport will make efforts to restore transport services and

complete the annual target of investing CNY1.8 trillion in highways and

waterways, according to a statement on its website. The ministry will promote

the resumption of construction projects as soon as possible, and accelerate the

launch of a second batch of investment plans this year, according to the

statement.

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

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

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