MNI China Daily Summary: Monday, October 29

     TOP NEWS: Beijing remains determined to curb excessive house price gains

and maintain current property market regulations, Xinhua News Agency said on

Monday. The report's publication follows recent speculation that China's slowing

economic momentum may prompt a relaxation of real estate controls, which have

been increased in recent years. 200 regulatory policies were introduced by local

governments in the first half of this year alone, and controls are unlikely to

be relaxed any time soon, Xinhua said.

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

(OMOs) for a second consecutive trading day on Monday, resulting in a net

liquidity drain of CNY120 billion, as the same amount of reverse repos mature

today, according to Wind Information. The 7-day weighted average interbank repo

average rate for depository institutions (DR007) increased to 2.6030% from

Friday's close of 2.5743%, Wind Information showed. The overnight repo average

decreased to 1.8206% from Friday's 2.0214%.

     YUAN: The yuan depreciated to 6.9589 against the U.S. dollar from Friday's

close of 6.9478. The PBOC set the yuan central parity rate stronger at 6.9377 on

Monday, following four consecutive weaker fixings.

     BONDS: The yield on the benchmark 10-year China Government Bond was last at

3.5075%, down from 3.5375% on Friday, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index closed 2.18% lower at

2,542.10. Hong Kong's Hang Seng Index increased 0.38% to 24,812.04.

     FROM THE PRESS: China's National Development and Reform Commission has

accelerated approvals for infrastructure projects valued at more than CNY100

billion this month, which may boost Q4 fixed asset investment, the Securities

Daily said Monday. The Ministry of Finance has called on local governments to

accelerate bond issuance and use the funds to support the economy. This should

continue to bolster the growth of infrastructure construction, the daily said,

citing Li Chao, chief analyst at Huatai Securities. (Link to the story:

https://bit.ly/2OcY4kG)

     Beijing is expected to take further measures to ease the tax burden,

including simplifying and reducing VAT and cutting businesses' social insurance

contributions, the China Securities Journal reported Monday, citing unidentified

sources. Cutting unnecessary fiscal expenditures, optimising the spending

structure and strengthening tax collection would allow for further tax cuts

without commensurately increasing the national deficit and debt, the newspaper

said, citing Liu Shangxi, the dean of the China Academy of Fiscal Sciences under

the Ministry of Finance. (Link to the story: https://bit.ly/2zeUqkS)

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

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

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