MNI China Daily Summary: Monday, June 24

     POLICY: Chinese President Xi Jinping and Donald Trump should agree to

restart stalled trade talks later this month, but, while Washington faces

domestic pressure to reach an agreement, Beijing is increasingly looking beyond

its traditional commerce to prioritise the continent-spanning Belt and Road

infrastructure drive and yuan internationalisation, a former deputy Chinese

trade minister told MNI.

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

(OMOs) on Monday, leaving liquidity unchanged as no reverse repos matured,

according to Wind Information. Total liquidity in the banking system is at a

reasonable and ample level, PBOC said in a statement on its website. 

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

institutions (DR007) fell to 2.2700% from last Friday's close of 2.2765%, Wind

Information showed. The overnight repo average decreased to 0.9931% from last

Friday's 1.1007%.

     YUAN: The yuan weakened to 6.8788 from last Friday's close of 6.8750. The

PBOC set the dollar-yuan central parity rate lower for the first time in four

days at 6.8503 today, compared with 6.8472 set last Friday.

     BONDS: The yield on the 10-year China Government Bond was last at 3.2505%,

up from last Friday's close of 3.2500 , according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index rose 0.21% to 3,008.15. Hong

Kong's Hang Seng Index rose 0.14% to 28,513.00. 

     FROM THE PRESS: China should strive for "as high as possible" economic

growth while at the same time adjusting its structures and guaranteeing quality,

according to a report in China Business News on Sunday. The newspaper quoted Yu

Yongding, a former member of the PBOC monetary policy committee, who said that

while core CPI is easing and future inflationary pressure is controllable, China

still had room for a proactive fiscal policy and a moderately loose monetary

policy.

     The issuance of local government bonds in China sped up in June and

amounted to CNY900 bln, China Securities Journal reported on Monday. The journal

said the issuance may represent the peak over the last three year period.

Issuance would supplement local government revenue and support economic growth,

the journal said citing market insiders.

     Interest rate marketization in China is like a marathon which, after years

of steady improvement, is now is in its final sprint stage, People's Daily said

in a commentary on Monday. The merging of rates was not only to "decontrol"

prices, but was a key part of a complete set of policies. The commentary said

that such reform was not "felled at one stroke" and the rhythm of reform needed

to be well grasped by policy makers.

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: flora.guo@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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