MNI China Daily Summary: Monday, December 16

     TRADE: China scrapped additional tariffs on automobiles and auto parts from

the U.S., along with a list of other products, starting Dec 15, after the

progress in trade talks announced on Friday, Xinhua News Agency reported.

     POLICY: The People's Bank of China (PBOC) will push for the further opening

of the financial sector and policies to facilitate foreign investment, according

to a deputy governor from the central bank. The central bank planned to improve

capital account convertibility and reform the exchange rate mechanism to

minimize risk while also stabilizing market expectations and facilitating

foreign investment.

     POLICY: China should fix economic growth target around 6% to ensure

employment, corporate profits and fiscal revenue in 2020, said Yao Jingyuan, a

councillor with the State Council and former head of the national statistics

agency, on Saturday.

     DATA: China's November industrial activities and consumption data

strengthened from October while investment stayed flat, data released by the

National Bureau of Statistics showed. Industrial output growth accelerated to

6.2% y/y in November from Oct's 4.7% y/y, more than projected 5.0% and the

highest since July. Retail sales rose 8% y/y to register a 5-month high, up from

7.2% in Oct, beating 7.6% forecast. Fixed-asset Investment recorded 5.2% in

Jan-Nov, unchanged from Jan-Oct and in line with the 5.2% median forecast.

     LIQUIDITY: The PBOC injected CNY300 billion on Monday via the 1-year

medium-term lending facility (MLF) with the rate unchanged at 3.25%. The central

bank skipped conducting reverse repos today, it said in a statement posted on

its website. The amount of the MLF is CNY14 billion more than the maturity, the

PBOC said. There are CNY286 billion in MLF which matured today, according to

Wind Information.

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

institutions (DR007) increased to 2.4964% from Friday's close of 2.4122%, Wind

Information showed. The overnight repo average rose to 2.4331% from Friday's

2.1268%.

     YUAN: The yuan weakened to 7.0027 against the U.S. dollar from Friday's

close of 6.9839. PBOC set the dollar-yuan central parity rate lower for the

fifth consecutive trading days at 6.9915, compared with last Friday's 7.0156.

     BONDS: The yield on 10-year China Government Bond was last at 3.1975%, flat

from Friday's close, according to Wind Information. 

     STOCKS: The Shanghai Composite Index gained 0.56% to 2,984.39, as brokerage

and defense shares advanced. Hang Seng Index edged down 0.65% to 27,508.09. 

     FROM THE PRESS: Government departments and local authorities in China have

been urged to innovate incentives to boost financial services offered to small

and private companies at a State Council meeting held by Vice Premier Liu He,

according to a statement on the Government website. Agencies were required to

improve the financial guarantee system and build up credit information platforms

to facilitate financing for smaller companies, and also encourage technology

firms to go to public markets for financing.

     China should promote regional development and strengthen the capacity of

city clusters and core cities to drive the economy and contain populations,

President Xi Jinping said in an article published by Qiushi, an official

publication.

--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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]