MNI China Daily Summary: Friday, May 24

     TOP NEWS: Some American politicians justify waging the trade or technology

war against China and its companies by making up presumptions and lies, even

inciting ideological differences, China's Ministry of Foreign Affairs spokesman

Lu Kang said in a Friday briefing in response to U.S. Secretary of State Mike

Pompeo's assertion that Huawei Technologies has ties to the government.

Ideological differences do not necessarily hinder economic, trade, industrial

and scientific cooperation among countries, Lu said.

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

(OMOs) for the second day, leaving liquidity unchanged as no reverse repos

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

at a reasonable and ample level, according to the PBOC.

     RATES: The 7-day weighted average interbank repo rate for depository

institutions (DR007) fell to 2.5500% from Thursday's close of 2.6150%, Wind

Information showed. The overnight repo average decreased to 2.4000% from

Thursday's 2.5814%.

     YUAN: The yuan strengthened to 6.9050 from Thursday's close of 6.9190. The

PBOC set the dollar-yuan central parity rate little changed at 6.8993 compared

with 6.8994 on Thursday. Today is the first lower fixing after the PBOC set the

parity rate higher for 11 successive days.

     BONDS: The yield on the 10-year China Government Bond was last at 3.3050%,

up from Thursday's close of 3.2950, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index rose 0.02% to 2,852.99. Hong

Kong's Hang Seng Index increased 0.32% to 27,353.93. 

     FROM THE PRESS: China's liquidity will remain stable though with a looser

bias in the near term, as the tax season slows and upcoming fiscal disbursement

unleashes more liquidity, the China Securities Journal reported. The market

should not expect lower money market rates as further easing is constrained by

factors including increasing its weakened currency.

     China won't rely on housing to drive economic growth but will use continued

reform across the economy to balance against external challenges, the People's

Daily said in its overseas edition. Giving local governments more autonomy over

housing policy does not mean a relaxation of housing regulation, the daily said.

China will stick to the principle that housing is for living not speculation,

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

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