MNI China Daily Summary: Friday, May 8

     BEIJING (MNI) - EXCLUSIVE: The U.S. may target some of China's industries

such as medical equipment suppliers with increased tariffs and other measures,

Chinese policy advisors and other sources in Beijing believe, but they told MNI

that President Donald Trump will not put the two countries' Phase 1 trade deal

in jeopardy even as bilateral relations hit their lowest point in years.

     TOP NEWS: Chinese Vice Premier and top trade negotiator Liu He held a phone

call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary

Steven Mnuchin Friday morning, Xinhua News Agency reported. The two sides agreed

to enhance macroeconomic and public health cooperation, create a favorable

atmosphere and conditions for implementing the Phase 1 trade deal, and strive

for positive outcomes, Xinhua said.

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

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

Liquidity in the banking system is reasonable and ample, the PBOC said on its

website.

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

institutions (DR007) rose to 1.5509% from Thursday's close 1.4478%, Wind

Information showed. The overnight repo average decreased to 0.9115% from 1.1322%

on Thursday.

     YUAN: The currency strengthened to 7.0751 against the dollar from

Thursday's close of 7.0913. PBOC set the dollar-yuan central parity rate lower

at 7.0788, down from the 7.0931 set on Thursday, the biggest downward adjustment

since April 30.

     BONDS: The yield on 10-year China Government Bonds was last at 2.6025%,

down from Thursday's close of 2.6100, according to Wind Information.

     STOCKS: The Shanghai Composite Index gained 0.83% to 2,895.34. Hong Kong's

Hang Seng Index rallied 1.04% to 24,230.17.

     FROM THE PRESS: Shanghai released a three-year CNY270 billion plan to

promote building technology infrastructure, with CNY210 billion in private

investment, the 21st Century Business Herald reported. The Shanghai government

will also support banks in setting up CNY100 billion concessional loans to guide

more private investment in technology investments, the newspaper said.

     Car sales in China are recovering rapidly with May's figure expected to

match that of last year, the Economic Information Daily reported. April sales of

leading automakers such as SAIC Motor and Geely already matched that of last

year and other companies are likely to perform well this month, the newspaper

said citing Wu Yingqiu, chairman of Global Auto. Used vehicle sales in May may

rise from last year, 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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