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MNI China Daily Summary: Monday, May 18

     POLICY: China has called on the rest of the world to increase coordination
of economic and trade policies to ensure global logistics function properly and
that trade, industrial and supply chains remain secure and open, Vice Minister
of Commerce Wang Shouwen said at a press conference today. The members of the
World Trade Organization should oppose unilateralism and protectionism, Wang
added.
     POLICY: China's economy has shown clear signs of recovery in the second
quarter and further accommodative measures can be taken under the current fiscal
and financial framework without adopting drastic easing that incurs long-term
financial risks, Ma Jun, a member of the People's Bank of China's monetary
policy committee, wrote in Financial News on Sunday. China can further lower the
reserve requirement ratio, or provide targeted liquidity to some banks
supporting thier new treasury bond purchases, said Ma.
     POLICY: The PBOC will step up countercyclical monetary policies but "with
more focus on flexibility", Governor Yi Gang wrote in Qiushi, a magazine run by
the Communist Party's central committee on Saturday. Signaling more expansionary
policies to stabilize the economy, Yi said the central bank will fully utilize
the tools of re-lending, rediscounting and loan forbearances to support
companies and stabilize the employment.
     LIQUIDITY: The PBOC skipped open market operations, leaving liquidity
unchanged, according to Wind Information. Liquidity in the banking system is
reasonable and ample, the PBOC said on its website.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) fell to 1.2910% from Friday's close of 1.4958%, Wind
Information showed. The overnight repo average increased to 0.9129% from the
previous 0.8555%.
     YUAN: The currency weakened to 7.1133 against the dollar from 7.0995 on
Friday. PBOC set the dollar-yuan central parity rate higher at 7.1030, up from
the 7.0936 set on Friday.
     BONDS: The yield on 10-year China Government Bond was last at 2.7075%, up
from the close of 2.6550% on Friday, according to Wind Information. 
     STOCKS: The Shanghai Composite Index edged up 0.24% to 2,875.42. Hang Seng
Index rallied 0.58% to 23,934.77.
     FROM THE PRESS: China is expected to unveil another raft of expansionary
fiscal and monetary policies to stimulate domestic demand, as the supply side
recovers faster than the demand side in the country, the Economic Information
Daily reported citing Wang Qing, chief macroeconomy analyst with Golden Orient
Ratings. The central bank should make more cuts to the reserve ratio at an
appropriate time to lower financing costs in the economy, the newspaper said
citing Wen Bin, chief analyst with Mingsheng Bank.
     China Mobile and China Unicom aim to build 550,000 5G stations in 2020, and
more than 200,000 5G stations were put into use, the Beijing Youth Daily
reported citing Chen Zhaoxiong, a vice minister of industry and information
technology. The ministry will encourage carriers to provide more subsidies with
the aim of attracting customers to upgrade and purchase new 5G mobile phones,
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
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

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