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

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