MNI China Daily Summary: Friday, November 1

     BEIJING (MNI) - POLICY: China will further open up its markets and improve

rights protection for private and foreign companies despite trade conflicts, Han

Wenxiu, a deputy director of the Office of the Central Commission for Financial

and Economic Affairs, said at a conference today following the conclusion of the

Fourth Plenary Session of the 19th Central Committee of the Communist Party of

China yesterday. China will positively boost the development of the Belt & Road

Initiative and diversify external markets to manage a changing global

environment, said Han when asked about the difficult China-U.S relationship.

     DATA: Caixin said today that its own manufacturing purchasing managers

index (PMI) rose for the fourth month to 51.7 in October from 51.4 in September,

a nearly two-month high suggesting more expansion. "Robust" new orders rose to

the highest since Feb 2013, while external demand expanded to the highest since

Mar 2018, when trade conflicts with the U.S. began, Caixin said by email. The

uptrend suggested by the Caixin gauge contradicted with official PMI released

Thursday, which lost 0.5 pp to 49.3 in Oct from Sept. Caixin said its PMI tracks

small and medium-sized manufacturers not surveyed by the statistics authority.

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

for the fifth day, with CNY30 billion drained due to the maturity of reverse

repos, according to Wind Information. The total liquidity in the banking system

is relatively high, enough to offset the maturity of reverse repos, PBOC said.

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

institutions (DR007) decreased to 2.4986% from Thursday's close of 2.6962%, Wind

Information showed. The overnight repo average fell to 2.2757% from Thursday's

2.5950%.

     YUAN: The currency weakened to 7.0376 against the dollar from Thursday's

close of 7.0350. PBOC set the dollar-yuan central parity rate firmer for a

fourth day at 7.0437, compared with previous 7.0533.

     BONDS: The yield on 10-year China Government Bonds was last at 3.2700%,

down from the close of 3.2750% on Thursday, according to Wind Information.

     STOCKS: The Shanghai Composite Index rallied 0.99% to 2,958.20. Home

appliance stocks led the gain, followed by finance and real estate shares. Hong

Kong's Hang Seng Index edged up 0.72% to 27,100.76.

     FROM THE PRESS: The yuan may continue to appreciate against the dollar in

the near term on expectation that the Chinese economy may stabilize in Q4 while

the U.S. economy faces increasing pressure, the China Securities Journal

reported citing analysts. Foreign investors may buy yuan assets given yuan's

recent appreciation, the newspaper said. The yuan reached a two-month high

yesterday at above 7.04 per dollar.

     PBOC plans to issue CNY30 billion offshore bills in Hong Kong on Nov 7 to

"enrich high credit rating yuan products and improve yuan yield curve," the

central bank said on its website today. Included are CNY20 billion 3-month

tranche and CNY10 billion 1-year tranche, according to the statement.

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

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