MNI China Daily Summary: Thursday, April 4

     POLICY: China has asked Canada to investigate three Canadian rapeseed

exporters over 'incidents', two of which have  now been denied export

certificates, and to prevent such cases from occurring again, the Ministry of

Commerce said. There was no update offered by MOFCOM on the status of the trade

talks between the U.S. and China. China's decision to again delay any tariff

increase on U.S. vehicles is aimed at creating a favourable atmosphere for the

current round of trade talks between the world's two largest economies, MOFCOM

said. China will defend their basic rights as a developing country, Gao

stressed, when asked whether China will give up on its special treatment granted

by the WTO.

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

for the 12th trading day on Thursday, leaving liquidity unchanged as no reverse

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

system is at a relatively high level, according to the PBOC. The CFETS-NEX

money-market sentiment index closed at 42 on Wednesday vs 35 on Tuesday.

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

institutions (DR007) rose to 2.2692% from Wednesday's close of 2.1917%, Wind

Information showed. The overnight repo average decreased to 1.4196% from

Wednesday's 1.6517%. 

     YUAN: The yuan depreciated against the dollar to 6.7185 from Wednesday's

close of 6.7076. The People's Bank of China (PBOC) set the dollar-yuan central

parity rate at 6.7055 on Thursday, compared with 6.7194 on Wednesday.

     BONDS: The yield on 10-year China Government Bond was last at 3.265%, down

3 bps from the close Wednesday, according to brokers.

     STOCKS: The benchmark Shanghai Composite Index rose 0.94% to 3246.57, Wind

Information said. Hong Kong's Hang Seng Index dropped 0.17% to 29,936.32.

     FROM THE PRESS: China will continue to advance the opening of the bond

market and also encourage engagement with international ratings agencies,

according to an unidentified PBOC official quoted by the Shanghai Securities

News. The newspaper quoted the official as saying that China's ratings system

lags behind international standards and needed to be enhanced if it was to win

international recognition. The official said China should study when to allow

foreign financial institutions to fully participate in repurchases of bonds, and

advance the use of yuan-denominated derivatives. The debut of China's bond

market on the Bloomberg Barclays Global Aggregate Index on Monday is expected to

force further reform, and the lack of trading mobility of bonds needed to be

resolved, the newspaper said.

     China has confirmed it will cut CNY300 billion in administrative fees

collected by the Government, China Securities Journal reported Thursday. The

newspaper also reported the Government had approved drafts of regulations under

the new foreign investment law. Starting from July 1, registration fees for

immovable property IP will be removed, while fees for trademark registration,

passport and visa pictures and wifi services for cars will also be reduced, said

officials led by Premier Li Keqiang at China's State Council regular meeting.

Taxes on certain goods taken by individuals into China, including food,

medicine, textiles, and electronics will also be cut from April 9, according to

the Journal. Laws covering Administration Permission, Trade Marks, Construction

and Electronic Signatures have also been approved and will be submitted for

approval by the National People's Congress, the Securities Journal said.

     China should be cautious about increasing speculation in the property

sector and needed to act to curb such behaviour, the Economic Information Daily

said in a front-page commentary on Thursday. After two years' of tight property

policies, housing prices have fallen and market demand is building, the

newspaper said. The commentary also said that lower mortgage rates were having a

positive impact on demand in some cities. However, it warned against local

governments stimulating the property sector for short term growth.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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