MNI China Daily Summary: Thursday, April 11

     EXCLUSIVE: European Union moves to screen foreign investment to protect key

technology and infrastructure could complicate an investment agreement with

China, despite a commitment by the two sides to clinch the deal by 2020, a

Chinese government advisor told MNI. Cui Hongjian, director of the department of

EU studies at the China Institute of International Studies (CIIS), a government

think tank managed by the Ministry of Foreign Affairs, hailed Tuesday's China-EU

joint statement as showcasing both sides' determination to defend

multilateralism and free trade.

     DATA: CPI rose 2.3% y/y in March, up from 1.5% in February, below 2.5%

projected by economists polled by MNI, while PPI rose from the lowest in more

than two years to 0.4% y/y, meeting forecast in an MNI survey, according to data

released by the National Bureau of Statistics. The upticks are not likely to

prompt decisionmakers to change the current monetary policy, some economists

said.

     TRADE: Top negotiators from China and the U.S. discussed remaining issues

by telephone following the ninth round of high-level trade talks, Gao Feng, the

spokesman of the Ministry of Commerce, told reporters on Thursday. Both sides

will maintain close communication and spare no effort in continuing talks, Gao

added.

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

for the 16th trading day, leaving liquidity unchanged as no reverse repos

matured, according to Wind Information. Total liquidity in the banking system

remains at a reasonable and ample level, according to the PBOC.

     RATES: The 7-day weighted average interbank repo rate for depository

institutions (DR007) fell to 2.6000% from Wednesday's close of 2.6445%, Wind

Information showed. The overnight repo average increased to 2.7500% from

Wednesday's 2.2723%. 

     YUAN: The yuan weakened to 6.7167 against the dollar from Wednesday's close

of 6.7166. The PBOC set the dollar-yuan central parity rate at 6.7088 today,

compared with 6.7110 on Wednesday.

     BONDS: The yield on 10-year China Government Bond was last at 3.3000%, down

2 bps from the close Wednesday, according to brokers.

     STOCKS: The benchmark Shanghai Composite Index fell 1.60% to 3189.96,

dampened by the adjustment of consumer stocks, especially liquor shares, Wind

Information said. Hong Kong's Hang Seng Index decreased 0.93% to 29,839.45.

     FROM THE PRESS: The PBOC is under less pressure to cut reserve requirement

ratios this month and may only do so if March money supply and credit data,

expected to be released in April 10-15, suggest a weakening economy, the

Securities Daily said citing Wang Qing, an analyst at credit rating agency

Dongfang Jincheng. A possible RRR cut is more likely to be introduced in the

second quarter, Wang was cited as saying. 

     Rebounding home sales and banks' renewed willingness to loan developers

signal a property market rebound, the 21st Century Business Herald reported.

Developers have issued a total of CNY202.9 billion in bonds so far this year, up

by 33% from the same period last year, according to the newspaper. Since April,

developers have announced plans to raise CNY100 billion, the report said citing

data by Centaline Property.

     Banking regulators may have difficulty pushing a plan requiring banks to

recognize more outstanding loans as bad debt, the Securities Times commented. A

possible measure by local regulators to toughen risk control, including defining

NPL as those outstanding for more than 90 days to just 60 days, cannot be

implemented without affecting the normal operations of banks, especially those

of medium and small sizes, 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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