MNI China Daily Summary: Monday, April 8

     TRADE: China and the U.S. should make more compromises and exchange

interest in non-core areas, overcome domestic opposition, reduce political and

security frictions and patiently seek final settlement of the trade talks, the

Global Times said in a commentary today. The trade talks have made substantial

achievement and entered a final sprint, with both sides continuing consultations

through video conferencing next week, the newspaper said.

     TRADE: China and the U.S. have made progress on intellectual property

protection, non-tariff measures, services, agriculture, trade balance and

implementation mechanisms, Xinhua News Agency said on Sunday following the

latest round of trade talks. Both sides decided to further negotiate on the

remaining issues through various means, Xinhua said.

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

for the 13th straight trading day, leaving liquidity unchanged as no reverse

repos matured, according to Wind Information. Total liquidity in the banking

system is at a relatively high level, enough to offset financial institutions'

payment of reserve requirement, the PBOC said.

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

institutions (DR007) fell to 2.2000% from the close of 2.2692% on Thursday, Wind

data showed. The overnight repo average rose to 1.4300% from 1.4196% on

Thursday.

     YUAN: The yuan weakened to 6.7203 against the U.S. dollar from the close of

6.7185 on Thursday. The PBOC set the dollar-yuan central parity rate at 6.7201

today, compared with 6.7055 on Thursday.

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

3.285%, up 2 bps from the close of Thursday, according to brokers.

     STOCKS: The benchmark Shanghai Composite Index fell 0.05% to 3,244.81,

failing to continue the previous consecutive five-day gain. Chemical industry,

steel and cement shares rallied, while IT stocks related to chips, AI and 5G led

the drop, according to Wind Information. Hong Kong's Hang Seng Index increased

0.47% to 30,077.15, the highest level since June 19, 2018.

     FROM THE PRESS: The recent bounce in the housing market may not lead to a

robust rebound of the real estate, and media should not speculate on the

recovery, according to the Financial News, a newspaper run by the PBOC in an

op-ed piece today. The paper said it is normal for both turnover and prices to

pick up in March, recovering from a low base following Chinese New Year in

February. Continued speculation will continue to put short-term pressure on

housing demands, dampening the healthy development of the market, the newspaper

said.

     The State Council issued a guidance to increase rediscount support for

small and micro-sized enterprises (SMEs), helping them discount small bills

valued no more than CNY5 million, according to a statement on the government

website Sunday. Medium and small banks, including new internet-based banks, will

be included in the refinancing program aimed at expanding lending to SMEs.

Additionally, a loan to a small company of no more than CNY10 million will be

recognized as qualifying collateral for the medium-term lending facility.

     China hopes to promote a better integration of the Belt and Road initiative

with EU development strategies, so as to better achieve common development,

wrote Premier Li Keqiang in an article published on Handelsblatt, a German

newspaper. China and EU will focus on matching the timetable and roadmap of the

bilateral investment treaty (BIT) during the EU Summit in Brussels, Li wrote.

--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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