MNI China Daily Summary: Thursday, April 18

     POLICY: China's strong growth in the first quarter lifted the government's

confidence in being able to meet all economic and social development targets

this year, said Yuan Da, the spokesman of the National Development and Reform

Commission, in a briefing today. The advancement of traditional and emerging

industries, robust consumer demand, stable investment and recovering trade

growth assured policymakers that they are on the right path. Q1's economic

indicators are usually the bellwether of the whole-year growth, Yuan added.

     POLICY: China's current account may continue a surplus in the first quarter

on exports of goods and services remaining strong, said Wang Chunying, the

spokeswoman of State Administration of Foreign Exchange (SAFE) in a briefing.

The capital account will be balanced as outbound investments, including direct

investment, securities investment and loans, increase, Wang said.

     POLICY: Chinese 5G providers should not be discriminatorily or unreasonably

excluded by any members of the World Trade Organization, spokesman Gao Feng of

the Ministry of Commerce said today. These exclusions disrupt global supply

chain and impede technology development without adding perceived national

security, Gao said.

     TRADE: China and the U.S. continue to make progresses on the consultation

about the text of agreements, the MOFCOM spokesman Gao Feng told reporters. The

two sides will maintain close communications "by all effective means" to resolve

remaining issues, including implementation mechanism, Gao said.

     DATA: Chinese banks net sold less foreign exchange for their clients in

March, indicating a slower capital outflow, according to data released by the

SAFE. Banks sold net CNY16.6 billion equivalent FX on behalf of clients, less

than CNY102.3 billion deficit in February. 

     DATA: Foreign direct investment (FDI) into China in March rose 4.9% y/y to

USD14.11 billion, data released by the MOFCOM showed. That compared with 3.3%

y/y gain to USD9.28 billion in February. FDI into China grew 3.7% y/y in Q1

totaling $35.8 billion.

     LIQUIDITY: The PBOC injected CNY80 billion via 7-day reverse repos, adding

liquidity for the third day. This net injected CNY80 billion as no reverse repos

mature today, according to Wind Information. The reverse repo aims to offset the

tax season and keep the liquidity of the banking system reasonable and ample,

the PBOC said.

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

institutions (DR007) fell to 2.7000% from Wednesday's close of 2.7916%, Wind

Information showed. The overnight repo average decreased to 2.8500% from

Wednesday's 2.9800%. 

     YUAN: The yuan weakened to 6.7040 against the dollar from Wednesday's close

of 6.6858. The PBOC set the dollar-yuan central parity rate at 6.6911 today,

compared with 6.7110 on Wednesday.

     BONDS: The yield on 10-year China Government Bond was last at 3.3600%, down

from the close of 3.3800 on Wednesday, according to brokers.

     STOCKS: The benchmark Shanghai Composite Index fell 0.4% to 3250.20. Hong

Kong's Hang Seng Index decreased 0.54% to 29,963.26.

     FROM THE PRESS: China's declining foreign trade surplus won't lead the yuan

to further depreciation, but will instead help stabilize the exchange rate, Guan

Tao, a senior researcher at China Finance 40 Forum, wrote in a report published

by China Business News today. China's improving economy and the inclusion of its

stocks and bonds in global indexes will draw capital inflow, Guan wrote.

     The PBOC is unlikely to cut reserve requirement ratios in the short term

after injecting liquidity by reverse repos and medium-term lending facility,

said China Securities Journal on its frontpage today. With better-than-expected

Q1 economic data, the PBOC is under less pressure to cut RRR, and it is expected

to continue reserve repo injection with greater intensity in the near future,

the newspaper said.

     The pace of China's local government bond issuances will slow in Q2 after

half of the target this year has been met in Q1, said Securities Daily citing

Zhang Yiqun, a researcher at the Society of Public Finance. LGB issuance

year-to-date reached CNY1.5358 trillion on Tuesday, the newspaper said citing

its calculations. The funds were invested in affordable housing, railways,

highways, urban infrastructure, and water conservancy projects, the daily 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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