MNI China Daily Summary: Thursday, February 6

     BEIJING (MNI) - TOP NEWS: China will cut punitive tariffs on $75 billion

U.S. goods from Feb. 14, according to a statement on the website of the Ministry

of Finance. Punitive tariffs announced on Sept. 1 last year will be lowered to

5% from 10%, and the others to 2.5% from 5%. China is willing to work with the

U.S. and remove all the additional tariffs imposed since last year, according to

the statement. 

     EXCLUSIVE: China is likely to ask the U.S. to accept delays in promised

purchases of American goods under the Phase One trade deal signed last month, as

it copes with the economically disruptive coronavirus outbreak, former Vice

Minister of Commerce Wei Jianguo told MNI.

     EXCLUSIVE: China's regulators have steered domestic banks to support policy

bank special bonds issued to raise funds to help contain the coronavirus

epidemic by pushing the initial coupon lower, according to two traders contacted

by MNI.

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

for the second day, leaving liquidity unchanged, according to Wind Information.

Total liquidity is sufficient to meet market demand, PBOC said.

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

institutions (DR007) fell to 2.2092% from Wednesday's close of 2.2952%, data by

Wind Information showed. The overnight repo average decreased to 1.7198% from

Wednesday's 1.9430%.

     YUAN: The currency strengthened to 6.9696 against the dollar from

Wednesday's 6.9997 close. PBOC set the dollar-yuan central parity rate higher

for the sixth consecutive trading day at 6.9985, compared with Wednesday's

6.9823. The rate is now at the highest point since Dec. 25, 2019.

     BONDS: The yield on 10-year China Government Bonds was last at 2.8625%,

down from Wednesday's close of 2.8700%, according to Wind Information.

     STOCKS: The Shanghai Composite Index gained 1.72% to 2,866.51, extending a

rebound to a third day. Hong Kong's Hang Seng Index rallied 2.64% to 27,493.70.

     FROM THE PRESS: The Chinese government will subsidize half the interest

payments on loans to key medical companies to keep their borrowing rate below

1.6% amid the epidemic, according to an official statement following the weekly

State Council meeting held yesterday. The government will support banks in

providing preferential interest rates to help companies producing and selling

key medical material and daily necessities, according to the statement.

     Some Chinese local authorities including those in Beijing and Shanghai

offered to rebate companies' payments on unemployment social insurance to

encourage companies not to lay off workers amid the outbreak of coronavirus, The

Paper reported.

     China must improve its governance capacity and provide effective legal

protection for epidemic prevention and control works, President Xi Jinping told

a party conference yesterday, according to a statement on the People's Daily's

front-page. Xi urged cadres to increase law enforcement and market supervision,

punish those sabotaging disease-prevention efforts and spreading rumours and

properly update progress of the outbreak, according to the statement. 

     Chinese Vice Premier Hu Chunhua urged agricultural authorities to ensure

food supplies during the coronavirus outbreak, Xinhua News Agency reported.

Officials must ensure crop planting, resolve transportation snags that impacted

animal farming and help rural migrant workers return to work, Hu said according

to Xinhua.

--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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