MNI China Daily Summary: Monday, July 22

     TOP NEWS: China's STAR market began trading today, with 16 new listings

more than doubled, according to Wind Information. ANJI Technology became the

hottest and gained more than 400%. The 25 companies listed were all in high-tech

or strategic emerging industries including information technology, high-end

equipment, and biomedicine. Their R&D investment are significantly higher than

that of the existing A-share comparable companies, according to the Xinhua News

Agency.

     POLICY: China should seek to join regional trade deals and provide a fairer

playing field for foreign investors as it copes with tension with the U.S., the

threat of a wider spread of global protectionism and potentially rising market

volatility as the Federal Reserve eases monetary policy, a former head of the

Chinese Academy of International Trade and Economic Cooperation told MNI. "As

long as foreign investment and trade, the two key areas impacted by trade

conflicts, can be stabilised, economic growth should not take a big hit, and

then forex and financial stability should be easy to address," Huo Jianguo,

former head of the think tank run by the Ministry of Commerce, said in an

interview.

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY50 billion via

7-day reverse repos, adding liquidity for a fifth day. This resulted in a net

injection of CNY50 billion as no reverse repos matured, according to Wind

Information. The reverse repo rate was kept unchanged at 2.55%, according to the

PBOC's trading announcement.

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

institutions (DR007) fell to 2.6918% from Friday's close of 2.8324%, Wind

Information showed. The overnight repo average decreased to 2.6576% from

Friday's 2.8283%.

     YUAN: The yuan weakened to 6.8804 from Friday's close of 6.8765. The PBOC

set the dollar-yuan central parity rate higher at 6.8759 today, compared with

6.8638 on Friday.

     BONDS: The yield on the 10-year China Government Bond was last at 3.1475%,

down from Friday's close of 3.1550%, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index fell 1.27% to 2,886.97. Hong

Kong's Hang Seng Index decreased 1.37% to 28,371.26.

     FROM THE PRESS: Some Chinese companies have applied for tariff exemptions

as they inquired about importing U.S. agricultural products, the Xinhua News

Agency reported on Sunday. The exemption applications will be evaluated by

experts appointed by the Customs Tariff Commission, the agency said. Chinese

companies are willing to continue importing some U.S. products to meet

consumers' needs, Xinhua said.

     China will lift some restrictions on foreign investment in the financial

sector in 2020, one year earlier than planned, according to a statement on the

PBOC website on Saturday. Removal of limits on foreign ownership of securities,

insurance and fund management firms have been fast tracked, and investors will

be encouraged to set up wealth management firms, forex brokers and pension

management companies, the PBOC said. 

     The PBOC and the National Association of Financial Market Institutional

Investors are further expanding the business scope for foreign bank operations

in China, the Shanghai Securities News reported today. Eligible foreign banks

may be able to apply to underwrite all types of bond issuances in addition to

panda bonds, the newspaper 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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