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     TOP NEWS: The government must focus on expending consumption and local
governments should increase policies boosting the use of electric cars and home
appliance, the National Development and Reform Commission and the Ministry of
Commerce said today. The government should also encourage rural consumption by
increasing access to high-quality industrial products in the countryside, they
said.
     DATA: Banks sold net CNY56.0 billion worth of FX on behalf of its clients
in December, down from CNY139.4 billion in November, indicating capital outflow
from China may have slowed. Banks' net purchases of FX forward contracts totaled
CNY66.3 billion, compared with CNY31.9 billion in November. The net purchases
position suggested market participants were betting on a stronger yuan in the
longer term. In 2018, banks sold net total CNY390 billion of FX, including both
transactions with clients and banks' proprietary trading desks.
     DATA: China's gross domestic production grew by 6.8% in 2017 after the
final verification, compared with the initial calculation of 6.9% released
earlier, according to a statement on the website of the National Bureau of
Statistics(NBS) today. The total value of GDP in 2017 recorded CNY82.08
trillion, down CNY636.7 billion from the first calculation, the NBS said.
     LIQUIDITY: The People's Bank of China (PBOC) today injected CNY10 billion
via 7-day reverse repos, and CNY10 billion through 28-day reverse repos, adding
liquidity for a fifth consecutive day. The operations resulted in a net
injection of CNY20 billion as no reverse repos matured, according to Wind
Information. The PBOC has net injected a total CNY1.16 trillion this week,
hitting a two-year high.
     RATE: The 7-day weighted average interbank repo rate for depository
institutions (DR007) increased to 2.5472% from Thursday's close of 2.5355%, Wind
Information showed. The overnight repo average decreased to 2.1630% from
Thursday's 2.2492%.
     YUAN: The yuan appreciated against the dollar, as USDCNY edged to 6.7706
against Thursday's close of 6.7747. The PBOC set the yuan's central parity rate
against the dollar weaker at 6.7665, compared with 6.7592 on Thursday. 
     BONDS: The yield on the benchmark 10-year China Government Bond was last at
3.1150%, up from the close of 3.0875% on Thursday, according to Wind
Information.
     STOCKS: The benchmark Shanghai Composite Index closed 1.42% higher at
2,596.01. Hong Kong's Hang Seng Index rose 1.25% to 27,090.81.
     FROM THE PRESS: China's key state-owned enterprises(SOEs) saw record high
total profits of CNY1.7 trillion in 2018, an increase of 16.7% y/y. Net profits
recorded CNY1.2 trillion yuan, a rise of 15.7%y/y, Securities Daily reports
today, citing Peng Huagang, spokesman of the State-owned Assets Supervision and
Administration Commission(SASAC). SASAC will accelerate setting up corporate
entities to manage state-owned capital and actively promote reform of mixed
ownership and equity diversification, the daily said citing Peng.
     The PBOC's week-long liquidity injection underlined its determination to
lead market interest rate lower, aiming to stabilize funding costs during the
tax season, Securities Daily said in a front-page commentary. The effect of the
PBOC's injection depends on whether banks can help to direct the funds towards
the real economy, the Daily said.
     China's increasing deflationary pressure will curb the overall import
demand for bulk commodities and the prices of overseas iron ore (especially
high-grade ore), thermal coal, coking coal and zinc will face different degrees
of adjustment, according to a report published by China International Capital
Corp. (CICC). The weakening domestic demand is inevitable due to a sharp
slowdown in credit expansion, the investment bank 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$$$]