MNI China Daily Summary: Monday, October 23

     TOPS NEWS: New China housing price data for September show fewer cities

showing housing price growth on a month-on-month basis but more cities showing

accelerating prices on the month. Data suggest that while government curbs on

price growth are working in some cities, existing curbs need to be strengthened

or, in smaller cities, need to be implemented for the first time. 

     RATES: The PBOC injected CNY110 billion in seven-day reverse repos and

CNY90 billion in 14-day reverse repos via open-market operations Monday. This

resulted in a net injection of CNY140 billion for the day, as a total of CNY60

billion in reverse repos matured on Monday. A total of CNY480 billion in reverse

repos mature this week. The benchmark seven-day repo average was last at

2.6562%, compared with 2.8265% on Friday.

     YUAN: The yuan weakened against the U.S. dollar on Monday after the PBOC

set a slightly weaker daily fixing. The yuan was last at 6.6370 against the U.S.

unit, weakening 0.26% compared with the official closing price of 6.6200 on

Friday. The central bank set the yuan central parity rate against the U.S.

dollar at 6.6205 on Monday, compared with Friday's 6.6092. 

     BONDS: The yield on benchmark 10-year China government bonds was last at

3.7200%, unchanged from the previous close, according to Wind, a financial data

provider.

     STOCKS: Stocks edged up slightly, led by the environmental protection and

biomedical shares. The benchmark Shanghai Composite Index rose by 0.06% to

3,380.70. Hong Kong's Hang Seng Index was 0.54% lower at 28,332.19. 

     FROM THE PRESS: China's real economy still faces downward pressures as

lower returns discourage investments, NDRC chairman He Lifeng told reporters in

Beijing on Sunday. China's key economic tasks are to boost private investment

and steer capital to the real economy away from speculation, He said.

(China.com.cn)

     China will resolutely stick to its targets for controlling the real estate

market, said Wang Menghui, the minister in charge of housing, according to a

report in the China Security Journal. Wang predicted property sales growth would

likely slow further and transaction prices would stabilize. The government will

stick to the "housing isn't for speculation" principle and boost housing supply,

particularly rental units, the report said. (China Security Journal)

     China will further deepen its supply-side reform measures to strength the

real economy and nurture new drivers for its next phase of growth, Economic

Information Daily said in an editorial over the weekend. Economic troubles are

caused by the real economy's structural imbalances in supply and demand, by the

deviation of speculative financing from the real economy and the deviation of

investor and home-owner demand in the housing sector, the editorial said. China

will remove excess industrial capacity, continue property controls and

deleveraging, and support weak sectors including municipal services and

environmental protection, it said. (Economic Information Daily)

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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