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     EXCLUSIVE: China and the U.S. may reach a deal to partially resolve their
trade dispute before the end of a 90-day negotiating period, advisors to the
Chinese government told MNI, although they were divided whether the March 1
deadline would be extended. An agreement won't have to wait for a meeting
between presidents Donald Trump and Xi Jinping, advisors said, after Trump told
reporters Feb 7 that he would not see his Chinese counterpart before the
deadline.
     DATA: China's exports in January rose 9.1% y/y to USD217.57 billion,
beating the -2.0% forecast by an MNI survey of economists, following a 4.4% drop
in December. Imports were down 1.5% y/y compared with last month's -7.6% y/y,
better than -10.5% survey projection. Trade surplus narrowed to USD39.16 billion
from USD57.06 billion in December, the smallest in three months. Exports to the
U.S. fell 2.8% y/y, while imports from the U.S. fell the most ever, by 41.1%
y/y.
     DATA: Foreign direct investment (FDI) into China in January rose 2.8% y/y
to USD12.41 billion, data by the Ministry of Commerce today showed. That
compared with 23.2% y/y gain to USD13.71 billion in December. FDI into Chinese
high-tech industries had the largest gain of 40.9% y/y, with high-tech services
receiving 113.4% y/y more investment.
     TRADE: China's vice premier and senior trade negotiator Liu He co-chaired
the opening ceremony of the Sino-US high-level economic and trade consultation
with the U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary
Steven Mnuchin today, Xinhua News Agency reported. Talks will be held in Beijing
on Thursday and Friday.
     POLICY: China will encourage foreign investors to park their money in the
area of agriculture, high technology and modern services, said Gao Feng, the
spokesman of the Ministry of Commerce at a presser in Beijing today. All the
industries encouraged to invest in will be included in the drafted investment
directory, now seeking public consultation, Gao added.
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
(OMO) for a fourth day, draining CNY200 billion as that amount of reverse repos
matured, according to Wind Information. The PBOC said the total liquidity in the
banking system is currently at a relatively high level, enough to offset cash
withdrawals, maturing of reverse repos and other factors.
     RATE: The 7-day weighted average interbank repo average rate for depository
institutions (DR007) decreased to 2.1883% from Wednesday's close of 2.2080%,
according to Wind Information. The overnight repo average rose to 1.7098% from
Wednesday's 1.6964%.
     YUAN: The yuan depreciated to 6.7701 against the U.S. dollar from
Wednesday's close of 6.7596. The PBOC set the dollar-yuan central parity rate at
6.7744 today, weaker than the 6.7675 set on Wednesday.
     BONDS: The yield on the benchmark 10-year China Government Bond was last at
3.10%, up from Wednesday's closing of 3.09%, according to brokers.
     STOCKS: The benchmark Shanghai Composite Index closed 0.05% lower at
2,719.70. Hong Kong's Hang Seng Index decreased 0.23% to 28,432.05.
     FROM THE PRESS: The U.S. appears more willing to reach an agreement with
China, as their high-ranking negotiators in Beijing as well as the U.S.
financial market reaction all have shown optimism about reaching a trade deal,
the Global Times said in an editorial late Wednesday. 
     China's economy is expected to bottom out in Q3 2019, the Economic
Information Daily said in a commentary. Although the Chinese economy still faces
many uncertainties, such as weak exports, slowing property investment and sales,
they were accounted for in policymaking so won't create another shock, the
newspaper said.
     The financial markets expect the PBOC to issue more large-scale central
bank bills overseas on a more regular basis, the Shanghai Securities News said
citing analysts. Issuing offshore bills more often will help convey the central
bank's policy intentions, the newspaper said citing Ming Ming, an analyst at
Citic Securities.  
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]