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     TOP NEWS: China's economy grew 6.6% y/y in 2018, the slowest pace since
1990, while GDP expanded 6.4% in the fourth quarter, the slowest in a decade,
according to data released today by the National Bureau of Statistics(NBS). One
brighter spot is industrial output rose 5.7% y/y in December, bouncing back from
10-year low of 5.4% in November, and beating the 5.4% forecast by economists
polled by MNI. FAI grew 5.9% y/y in 2018, meeting the 5.9% median forecast in an
MNI survey, and maintained the same pace as Jan-Nov. Retail sales improved to
8.2% y/y in December from a historical low 8.1% in November, beating the median
of 8.1% forecast in an MNI survey.
     POLICY: The targets for infrastructure spending can be expected to be
stronger this year. They will be important to help balance urban-rural
development, revitalize the countryside and bridge regional growth differences.
This will help boost consumption and increase rural spending. Transportation
systems linking the countryside, including major trunks, rail, roads and
subways, as well as public services such as access to hot water, are still
insufficient, lagging behind developed nations. China will also spend on hydro
projects and water supplies, Ning Jizhe, the head of the NBS said at a press
briefing in Beijing today.
     TRADE WAR: The on-going trade frictions with the U.S. have had some impact
on the Chinese economy, including trade and investment, according to the NBS
head Ning Jizhe. However, Ning said the two countries' negotiations on resolving
conflicts have had some positive progress.
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
(OMOs) today, resulting in a net drain of CNY80 billion -- the total of reverse
repos maturing today, according to Wind. The central bank said the current
liquidity in the banking system is at a reasonable and ample level.
     RATE: The 7-day weighted average interbank repo rate for depository
institutions (DR007) increased to 2.5527% from Friday's close of 2.5472%, Wind
data showed. The overnight repo average increased to 2.2336% from Friday's
2.1623%.
     Yuan: The yuan depreciated to 6.7901 against the U.S. dollar from Friday's
close of 6.7706. The PBOC set the yuan's central parity rate against the dollar
at 6.7774 on Monday, compared with the 6.7665 on Friday. 
     STOCKS: The benchmark Shanghai Composite Index rose 0.56% to 2,610.51. Hong
Kong's Hang Seng Index increased 0.39% to 27,196.54.
     BONDS: The yield on the benchmark 10-year China Government Bond was last at
3.1400%, up from the closing of 3.1200% on Friday, according to Wind
Information.
     FROM THE PRESS: China's main priority in 2019 is to deepen the reform of
the financial system, as China maintaining an average growth rate of 6% in the
next three years depends and joining the rank of high-income country all depend
on it, Sina Finance reports, citing a report published by Li Daokui, a professor
at Tsinghua University School of Economics and Management. The excessive
tightening in the financial sector is the main reason China's economy underwent
another round of adjustment since mid-2018, with low confidence among private
and small companies and slowing GDP growth, Li was cited as saying.
     Nine provinces and cities across China have issued their key project
investment plans for 2019, totaling about CNY25 trillion, the Shanghai
Securities News reported. Traditional infrastructure projects including
railways, highways, airports, electricity, natural gas and water conservancy
projects, as well as major industrial and eco-environment protection projects
remain the main areas of investment, the newspaper said.
     China's economy has all the conditions to maintain steady growth in a
reasonable range, the People's Daily overseas edition said. A more precise macro
policy package, continuously improving infrastructure, 5 to 10 more years of
labor dividend and the process of urbanization will support the long-term
development of the economy ahead, the Daily said, citing Chen Wenling, chief
economist at China Center for International Economic Exchanges.
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]