MNI China Daily Summary: Friday, November 22

     BEIJING (MNI) - EXCLUSIVE: China may marginally relax its tough

property-market regulations as economic growth falls close to 6% next year, but

major moves are unlikely as authorities express determination not to resort to

stimulating the speculation-prone sector, government advisors told MNI.

"Regulations will maintain the current tight bias, as the trend for large

amounts of capital to flow into the real estate sector has not changed," said

Liu Xiahui, head of the economic growth office at the Institute of Economic of

Chinese Academy of Social Sciences, but he added that "any tougher regulation on

home purchase limits, or developers' financing is unlikely."

     POLICY: China will pursue larger-scale tax and fee cuts to stimulate

growth, but will "resolutely" oppose quantitative easing, Xinhua News Agency

reported citing Premier Li Keqiang. Li repeated that China won't open the credit

floodgate, according to Xinhua's report on the premier, who spoke at the "1+6"

roundtable with world leaders including the World Bank and IMF. China will

maintain the continuity and stability of its macroeconomic policies, utilize

countercyclical tools, prioritize employment and further implement policies

opening up its financial sectors, Li said according to Xinhua.

     POLICY: China's economy has great resilience, potential and room for

adjustments, and its long-term improving trend won't change, Xinhua News Agency

reported President Xi Jinping as saying in a Friday meeting with International

Monetary Fund Managing Director Kristalina Georgieva. China resolutely opposes

protectionism and defends the multilateral trading system with the WTO at its

core, Xi said according to Xinhua. 

     POLICY: China's large-scale tax and fee cuts this year are expected to top

CNY2.3 trillion, said Minister of Finance Liu Kun, at a forum today. The finance

ministry will more efficiently implement tax cuts by closely monitoring changes

of companies' tax burdens and evaluate relevant policies, Liu said.

     DATA: China revised up its 2018 gross domestic product (GDP) by 2.1% to

CNY91.93 trillion after conducting an economic census that it said gathered more

comprehensive and accurate data. The revision showed the service industry now

accounted for 53.3% of GDP, up from the original 52.2%, according to a statement

from the National Bureau of Statics (NBS). The revision should not have an

apparent impact on growth of this year, the NBS said.

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

for the third consecutive day on Friday, leaving liquidity unchanged, according

to Wind Information. The level of liquidity in the banking system is reasonable

and ample, PBOC said.

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

institutions (DR007) rose to 2.4194% from Thursday's close of 2.3279%, Wind

Information showed. The overnight repo average increased to 1.9462% from

Thursday's 1.8440%.

     YUAN: The currency strengthened to 7.0356 against the dollar from

Thursday's close of 7.0374. PBOC set the dollar-yuan central parity rate lower

for a fifth day at 7.0306, compared with Thursday's 7.0217.

     BONDS: The yield on 10-year China Government Bonds was last at 3.1675%,

flat from the close of Thursday, according to Wind Information.

     STOCKS: The Shanghai Composite Index trimmed 0.63% to 2,885.29, as medical

and consumer electronics shares tumbled. Hong Kong's Hang Seng Index increased

0.48% to 26,595.08.

     FROM THE PRESS: China has relaxed market access to the aged care and public

welfare industry to stimulate growth, the People's Daily reported. The new list

of restricted sectors has been shortened by 13% from 2018, removing some social

and national security regulations, the newspaper cited analysts as saying.

     China's relatively higher interest rates among developing economies allow

policy tools to deal with another global financial crisis, China News Services

reported citing former PBOC governor Zhou Xiaochuan. China should avoid moving

to negative rates too soon, while the world should attach importance to trade

frictions and the dangers of bubble economics so to avoid financial crisis, the

newspaper cited Zhou as saying.

--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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