MNI China Daily Summary: Monday, April 29

     TOP NEWS: China's Ministry of Commerce plans to release a shorter so-called

negative list of areas barred from foreign investment before the end of June in

a bid to further attract foreign capital, said Minister Wang Shouwen at a

briefing today. The ministry is also producing a list of areas where foreign

investment is encouraged and guiding investment to less-developed central and

western regions, Wang added.

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

today, leaving liquidity unchanged as no reverse repos matured, according to

Wind Information. Total liquidity in the banking system is at a relatively high

level due to increasing fiscal spending at the end of the month, according to

the PBOC.

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

institutions (DR007) fell to 2.6900% from the close of 2.7059% on Sunday, Wind

data showed. The overnight repo average fell to 1.5000% from 2.0340% on Sunday.

     YUAN: The yuan strengthened to 6.7350 against the U.S. dollar from the

close of 6.7381 on Friday. The PBOC set the dollar-yuan central parity rate at

6.7310 today, compared with 6.7307 on Friday. Today's rate was the lowest

against the dollar since March 29.

     BONDS: The yield on the 10-year China Government Bond (CGB) was last at

3.4200%, up from the close of 3.3900% on Sunday, according to brokers.

     STOCKS: The benchmark Shanghai Composite Index fell 0.77% to 3,062.50. Hong

Kong's Hang Seng Index increased 0.97% to 29,892.81.

     FROM THE PRESS: Steel producers' enthusiasm to expand production amid

infrastructure stimulus could undermine earlier policies focused on cutting

overcapacity, Xinhua News Agency reported, citing record quarterly output in Q1

following last year's all-time high. Big increases in output would exceed market

demand and squeeze profits, Xinhua said citing Qu Xiuli, vice president of the

China Iron and Steel Association. It is imperative to establish a long-term

mechanism to prevent overcapacity in the industry, Xinhua said citing Li

Xinchuang, director of the China Metallurgical Industry Planning and Research

Institute.

     China is expected to accelerate the release of new policies to promote the

development of the high quality manufacturing industry, the China Securities

Journal said in a front-page report. These policies will focus on developing

advanced manufacturing clusters, applying leading information technology in the

sector and improving the business environment for the industry, the newspaper

said. The development of high quality manufacturing will be one of China's key

tasks in the near future and is expected to help underpin economic growth, the

newspaper said.

     The China Securities Regulatory Commission has not relaxed profit

requirements for IPO approvals, and will strictly control the quality of listed

companies in areas such as corporate governance, standardized operations and

information disclosure, according to a statement posted on Saturday on the

commission's website.

--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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