MNI China Daily Summary: Monday, October 11

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2% on Monday. The operations lead to a net drain of CNY190 billion after offsetting the maturity of CNY200 billion reverse repos today, according to Wind Information. The operation aims to keep the liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.1643% from 1.8266% on Friday, Wind Information showed. The overnight repo average increased to 2.0871% from the previous 1.5717%.

YUAN: The currency strengthened to 6.4377 against the dollar from 6.4491 on Friday. The PBOC set the dollar-yuan central parity rate lower at 6.4479, compared with the 6.4604 set on Friday.

BONDS: The yield on 10-year China Government Bond was last at 3.0000%, up from 2.9125% on Saturday, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.01% to 3,591.71 while the CSI300 index rose 0.13% to 4,936.19. Hang Seng Index rallied 1.96% to 25,325.09.

FROM THE PRESS: China's authorities should keep commodity prices stable by preventing speculators from misusing bank loans and trust funds to bet on products such as coal, steel and non-ferrous metals, the government-run Economic Daily said in an editorial. The producer prices index is expected to remain high as domestic commodities demand outstrips supply while high prices persist on the international markets, said the daily. The authorities should ensure prioritized funding to companies engaged in supplying thermal coal and heating, and they should support importers to ensure adequate imports to supplement domestic supply, the newspaper said. China's electricity usage boosted by heating usage is expected to surge this winter, outstripping demand peaks in the summer and last winter, said the newspaper citing the National Development and Reform Commission.

China's northeast city Harbin, the capital of Heilongjiang province, is giving fresh graduates and new residents as much as CNY100,000 incentives and other favorable terms to courage them to buy homes and settle in the city, Yicai.com reported citing the local government. Harbin is joining many other Chinese cities seeking to arrest the falling markets, which reflects a growing divergence in China' regional housing markets, said Yicai.com. Some have published price floors to prevent developers from selling for too cheap and disrupting the markets, said the newspaper. Many Chinese cities now face the challenge of overly bearish housing markets, which cause financial difficulties for developers and impact financial stability, the newspaper said citing analysts. Harbin average new home price slid 0.3% in August from July, or 0.6% lower than a year ago, said Yicai.

China's drive for web security has entered a "fast lane," with positive progress made in many cases, the Xinhua News Agency said in a commentary. The cybersecurity agency has effectively prevented risks to national security resulting from the procurement, data treatment and overseas listings by investigating online platforms including ride-hailing Didi Chuxing Technology, logistics firms Yunmanman and online recruiter Boss Zhipin, the official news carrier said.