MNI China Daily Summary: Thursday, April 26

     TOPS NEWS: There was no further information given regarding the U.S.

officials and trade representatives' upcoming visit to China at the Ministry of

Commerce's regular press briefing, but it was reiterated that China is ready for

any fallout from trade tensions with the States. A MOFCOM official told MNI that

they were not yet allowed to reveal information. China will continue to observe

U.S. actions and take measures to counter them, said Gao Feng, spokesman of the

ministry, at the briefing. China hopes the U.S. acts in a way "in line with the

stream of global economic development" for the long-term growth and development

of the world, Gao noted.

     LIQUIDITY: The PBOC injected CNY100 billion in 7-day reverse repos, with

the rate unchanged at 2.55%, which it announced on its website Thursday morning

without further explanation. This resulted in a net drain of CNY150 billion as a

total of CNY250 billion reverse repos matured today. CFETS-ICAP's money-market

sentiment index closed at 56 on Wednesday, down from 76 on Tuesday.

     MONEY MARKET RATES: The 7-day repo average fell to 2.9475% from 2.9909% on

Wednesday, after PBOC net drained CNY150 billion via its open-market operations.

The overnight repo average dropped to 2.7846% from Wednesday's 2.8016%.

     YUAN: The yuan rose against the U.S. dollar despite PBOC setting a weaker

daily fixing. The yuan strengthened 0.03% to 6.3145 against the U.S. unit,

compared with the official closing price of 6.3204 yesterday. The People's Bank

of China set the yuan central parity rate at 6.3283 Thursday, weaker than

Wednesday's 6.3066.

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

3.6200%, unchanged from the previous close, according to Wind Information.

     STOCKS: Shares declined in Shanghai, led lower by gas coal companies, with

Foshan Gas down by more than 5%. The benchmark Shanghai Composite Index closed

1.38% lower at 3,075.03. Hong Kong's Hang Seng Index dropped 1.29% to 29,938.34.

     FROM THE PRESS: In the new international and domestic environment, China's

financial policies will continue to focus on strong regulation and risk

prevention, and economic policies will set high standards for the new economy

and replace old growth engines with new ones, the Economic Information Daily

said. Increasing domestic demand mentioned in the recent Politburo meeting will

not stimulate infrastructure investment and property investment as they did in

the past, the report said. Infrastructure investment will grow steadily as a

counter-cyclical stabiliser, and will not see its growth fall sharply, the

report also noted.

     China Securities Regulatory Commission and the Ministry of Housing and

Urban-Rural Development published on Wednesday the first document supporting

house-leasing asset-backed securities (ABS) since the promotion of leasing

market development was first proposed, Shanghai Securities News reported. The

government will encourage house-leasing companies to issue ABS backed by leasing

properties, and will experiment on issuing real-estate investment trusts, the

report said. However, leasing properties as underlying assets will not generate

acceptable yields for ABS unless the government also lowers land prices and

taxes as it raises rent, noted the report, citing Ouyang Jie, the senior vice

president at Future Land, a Shanghai-based property developer.

     Seven new tax-cutting measures to support new businesses, innovation, and

the development of micro-sized and small companies were announced during the

executive meetings of the State Council on Wednesday, held by Premier Li

Keqiang, reported China Securities Journal. These seven measures will save more

than CNY60 billion for companies this year, the report said. The meeting also

emphasised that regulators will include inclusive finance in bank tests to

ensure that companies see their funding costs fall, and the government will try

to significantly cut the funding costs of micro-sized and small companies before

the end of third quarter, the report said.

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

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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