MNI China Daily Summary: Friday, October 11

     EXCLUSIVE: The chances of a partial deal between China and the U.S. have

fallen significantly following Washington's latest moves to target Chinese

companies and officials, Chinese policy advisors and trade experts told MNI,

with one adding that Beijing is increasingly focusing on ensuring that what it

sees as a long-term dispute does not escalate. While some advisors thought there

was still a possibility of an interim agreement, they pointed to this week's

U.S. move to add 28 companies and organization to a blacklist and place visa

restrictions on Chinese officials in response to a "repressive campaign" in

Xinjiang. President Donald Trump said talks with China could be impacted should

anything "bad" happen in the handling of anti-government protests in Hong Kong.

     TRADE: China is approaching the U.S. trade talks with great sincerity and

is willing to make serious exchanges with the U.S. on key issues, including the

trade balance between the two countries, market access and investor protection,

said Chinese Vice Premier Liu, Xinhua News Agency reported late Thursday. China

wants positive progress from the trade negotiations and is willing to work with

the U.S. to prevent any further escalation in trade friction, Liu said according

to Xinhua.

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

(OMOs). This resulted in a net drain of CNY30 billion given the same amount of

reverse repos matured, according to Wind Information. The total liquidity in the

banking system is relatively high, the PBOC said.

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

institutions (DR007) decreased to 2.3456% from Thursday's close of 2.5006%, Wind

Information showed. The overnight repo average fell to 1.9099% from Thursday's

2.0028%. 

     YUAN: The currency strengthened to 7.1000 against the dollar from

Thursday's close of 7.1246. The PBOC set the dollar-yuan central parity rate

stronger at 7.0727, compared with 7.0730 on Thursday.

     BONDS: The yield on 10-year China Government Bonds was last at 3.1525%, up

from the close of 3.1250% on Thursday, according to Wind Information. 

     STOCKS: The Shanghai Composite Index increased 0.88% to 2,973.66. Hong

Kong's Hang Seng Index rallied 2.34% to 26,308.44. 

     FROM THE PRESS: The Chinese yuan rebounded on Thursday as expectations of

more easing from the U.S. Federal Reserve weighed on the dollar, China

Securities Journal reported citing unidentified analysts. The jump in the yuan

shows the market expects the Chinese economy to stabilize and the trade

environment to improve and the depreciation pressure on the yuan may ease, the

newspaper said.

     China is planning to roll out new policies to boost private investment,

including more tax and fee cuts, the Economic Information Daily reported. China

will also encourage private investment in major infrastructure projects, and

local governments should introduce projects with clear return mechanisms and

high commercial potential for private companies, 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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