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     EXCLUSIVE: Policy advisors expect China to signal a more expansionary
fiscal policy later this month to keep economic growth at 6% or more in 2020,
including a boost to infrastructure spending to power a new drive for regional
development, they told MNI. "The deficit ratio and quotas for the issuance of
government special-purpose bonds will continue to increase. This means the
government will pursue a more expansionary fiscal policy," said Tang Duoduo,
Deputy Director of Macro-Economy Research at the Chinese Academy of Social
Sciences, a research institute overseen by the State Council.
     POLICY: China shouldn't use stimulus to keep GDP growth above 6%, as doing
so would be at the expense of future growth and would places the economy at the
risk of a sharp correction, Liu Shijin, deputy director of the Economic
Committee of the Chinese People's Political Consultative Conference, said
Saturday. China's growth could fall by one percentage point in the next two
years, Liu said, noting it had now entered a new growth stage of 5%-6%, said
Liu, a member of the People's Bank of China monetary committee. The challenge of
managing the economy will be even greater next year as slowdown continues after
Q1.
     DATA: China's imports rose 0.3% y/y to $183.01 billion in November, the
first yearly increase in seven months, as the annual Double 11 online sales
campaign boosted demand for imported goods. Exports continued to fall 1.1% y/y
to $221.74 billion, faster than last month's 0.9% y/y drop, data from the
customs administration released on Sunday showed.
     DATA: China FX reserves fell for the first time in four months, by $9.6
billion in Nov from $3.1052 trillion in Oct, data by the State Administration of
Foreign Exchange (SAFE) on Saturday showed. The decrease was due to a slight
rise of the dollar index and falling prices of major government bonds, according
to SAFE. Reserves rose $22.9 billion, or 0.7%, from the beginning of this year,
SAFE said. The yuan gained 0.13% against the U.S. dollar in Nov, Wind data
showed. 
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
for the 14th day, leaving liquidity unchanged, according to Wind Information.
Total liquidity in the banking system is reasonable and ample, the PBOC said.
     RATES: The seven-day weighted-average interbank repo rate for depository
institutions (DR007) rose to 2.4510% from Friday's close of 2.3678%, Wind
Information showed. The overnight repo average increased to 2.3243% from
Friday's 2.0647%.
     YUAN: The yuan weakened to 7.0403 against the U.S. dollar from Friday's
close of 7.0340. PBOC set the dollar-yuan central parity rate higher at 7.0405,
compared with Friday's 7.0383.
     BONDS: The yield on 10-year China Government Bond was last at 3.2000%, down
from Friday's close of 3.2025%, according to Wind Information. 
     STOCKS: The Shanghai Composite Index gained 0.08% to 2,914.48. Hang Seng
Index edged down 0.01% to 26,494.73. 
     FROM THE PRESS: Fixed asset investment in China may rise by 3-4% percentage
points under a series of policy measures to stabilize growth, the Security Daily
reported citing Wang Qing, chief macroeconomic analyst at credit rating agency
Dongfang Jincheng. Reductions on taxes and fees may be maintained next year to
reverse stalling profits in the manufacturing sector. Fixed asset investment
grew by 5.2% y/y in the period Jan-Oct this year.
     The PBOC is likely to roll over the maturity of CNY286 billion of
medium-term lending facility (MLF) next Monday and use MLF to add more
liquidity, the Securities Daily reported citing Yan Se, chief economist at
Founder Securities. The PBOC is less likely to cut the reserve requirement
ration (RRR) in December, but may do so in January, as the market will see more
special purpose bond issuance by local government authorities in January, and
bank lending should also move higher by then, the daily reported Yan as saying.
     China's 2020 economic policies must serve goals set in the 13th Five-Year
Plan, according to a commentary published by the Economic Information Daily. A
key focus of economic policy next year will be making better use of
macroeconomic policies and counter-cyclical adjustment tools, the daily 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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