MNI China Daily Summary: Thursday, August 15

     EXCLUSIVE: U.S. President Donald Trump's delayed imposition of tariffs on a

range of China exports until mid-December is a bid to keep consumers onside

ahead of the busy holiday shopping period and not upset his 2020 re-election

campaign, China government advisors told MNI. By pushing back the introduction

of duties on cellphones, laptops and other consumer items, any adverse impact on

domestic shoppers before the Christmas seasons should be avoided, and Trump

could seek increased agricultural product exports to China in exchange, said Mei

Xinyu, a researcher at Chinese Academy of International Trade and Economic

Cooperation affiliated with the Ministry of Commerce.

     TRADE: The U.S. and China remain headed for a trade war that could a

trigger a global recession even after Donald Trump's delay of some tariffs,

because the move ignores the main fight around technology, a former Canadian

trade official told MNI. The tensions are already causing damage by forcing

companies to upend global supply chains and there's little clear evidence

Washington is chasing a breakthrough agreement that will significantly boost the

global economy, said Dan Ciuriak, a former deputy chief economist in Canada's

trade department. President Xi Jinping won't be able to match the success of

Canada and Mexico in turning Trump's threats around rigged trade into a new pact

because the U.S. sees China as a geopolitical threat, he said.

     DATA: The pace of residential property price gains in 70 large and medium

sized Chinese cities eased in July as local governments enacted policies to

stabilize the property market. The average price of new homes in 70 major

cities, excluding subsidized units, slowed for a third month to 10.1% y/y in

July from the previous 10.8% y/y growth, marking the smallest increase so far

this year.

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY30 billion via

7-day reverse repos, adding liquidity for a fourth consecutive day. This

resulted in a net injection of CNY30 billion as no reverse repos matured,

according to Wind Information.

     The PBOC also injected CNY400 billion via one-year medium-term lending

facility (MLF) on the same day, according to a statement on its website. The

injection is CNY17 billion more than MLFs maturing today. This aims to offset

the tax season and the maturity of MLF, and keep the liquidity in the banking

system reasonable and ample, the PBOC said.

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

institutions (DR007) fell to 2.6816% from 2.6965% on Wednesday, Wind Information

showed. The overnight repo average decreased to 2.6605% from 2.6911% yesterday.

     YUAN: The yuan weakened to 7.0300 against the dollar from Wednesday's close

of 7.0165. The PBOC set the dollar-yuan central parity rate lower at 7.0268,

compared with 7.0312 set on Wednesday.

     BONDS: The yield on 10-year China Government Bond was last at 3.0050%, down

from the close of 3.0100% on Wednesday, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index rose 0.25% to 2,815.80. Hong

Kong's Hang Seng Index increased 0.76% to 25,495.46.

     FROM THE PRESS: The U.S. threat to hike tariffs and its accusations that

China is a "currency manipulator" are without basis but have intensified global

market turmoil, People's Daily reported. Citing a number of experts, the

People's Daily report said China should focus on promoting reform and market

opening in its pursuit of high-quality economic development.

     China should increase counter-cyclical financial adjustments in the

following months, China Securities Journal reported. Citing Liu Xuezhi, a senior

researcher at the Financial Research Center of the Bank of Communications, the

Journal report said that while tax and fee cuts continued, fiscal pressure

should also be eased through collecting profits from local state-owned

enterprises. Monetary policy should be marginally relaxed along with targeted

cuts to the reserve requirement ratio, Liu said.

     The massive and rapid issuance of U.S. Treasury bonds cannot solve the

fundamental problems of the U.S. economy which is based on unsustainable levels

of debt, Economic Information Daily said in a front-page commentary. There was

less demand for T-bonds due to the lack of investment confidence overseas, the

commentary said. When the creditor country sells T-bonds to avoid risks this

would put greater pressure on bond issuance, the newspaper said.

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

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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]