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     TOPS NEWS: - China's economy grew stronger than expected in the fourth
quarter of 2017, with real GDP gaining annualize 6.8% y/y. The full-year growth
in 2017 was 6.9%, the same as Premier Li Keqiang had indicated last week.
Officials said the growth underlined stable economic conditions. 
- Retail sales rose 9.4% y/y in December, lower than the expected 10.2% gain in
an MNI survey, but in line with the weak import data 
- Industrial output grew 6.2% in December, as MNI expected in its '5 Things To
Look For' preview that industrial output tends to pick up in the last month of a
quarter 
- Infrastructure investment grew 19% y/y, a strong performance supporting GDP
growth 
- Real estate investment grew 7.0% y/y in 2017, a bit higher than 6.9% in 2016
though the government's strict controls on the sector bit. 
     DATA: China banks were net buyers of foreign exchange from their clients in
December, another sign that capital inflows are gaining momentum as the stronger
yuan and capital outflow controls achieved intended effect, according to data
released today by the State Administration of Foreign Exchange (SAFE). SAFE said
that Chinese banks bought a net CNY44.5 billion from clients in December,
compared with a net sale of CNY31.2 billion in November. The number indicates
the level of capital flowing in and out of the country. The larger RMB purchase,
the less the outflow.
     DATA: China new home prices gained at the fastest pace in five months in
December, signaling the strong impulse to invest in property has overcome the
many curbs imposed by authorities concerned with excessive speculation. Average
price of new homes for 70 cities monitored by the National Bureau of Statistics
rose 0.5% m/m in December, up from the 0.4% m/m gain in November and was the
biggest monthly gain since July, according to MNI's calculations based on NBS
data. The survey excluded government-subsidized housing. December's housing
prices were 5.8% higher than a year ago, compared with the 5.5% annual gain in
November.
     LIQUIDITY: PBOC injected CNY80 billion in 7-day reverse repos, CNY70
billion in 14-day reverse repos, CNY10 billion in 63-day reverse repos in Open
Market Operation (OMO) on Thursday. 
- Net CNY90 billion injection after CNY70 billion reverse repos mature. 
- CFETS-ICAP money-market sentiment index ended at 58 on Wednesday. 
     RATES: Money market rates were higher after PBOC injected a net of CNY90
billion via its open-market operations. 
- 7-day repo average was last at 2.9083%, up from Wednesday's average of
2.8343%. 
- The overnight repo average was at 2.7814% compared with Wednesday's 2.7670%.
     YUAN: The yuan gained against the U.S. dollar even as PBOC set a weaker
daily fixing. 
- The yuan was last at 6.4242 against the U.S. unit, rising 0.13% compared with
the official closing price of 6.4325 yesterday 
- PBOC set yuan central parity rate vs U.S. dollar at 6.4401 on Thursday, weaker
than Wednesday's 6.4335 
-PBOC has set the fixing lower for the first time after five trading days of
increase.
     BONDS: The yield on benchmark 10-year China government bonds was last at
3.9700%, up from the previous close of 3.9550%, according to Wind Information.
     STOCKS: Stocks rose in Shanghai, led by bank shares, with China Merchants
Bank leading the gain. The benchmark Shanghai Composite Index rose 0.87% at
3,474.75. Hong Kong's Hang Seng Index was 0.43% higher at 32,121.94.
     FROM THE PRESS: An increasing number of regional Chinese governments has
been found to have inflated their fiscal data, Economic Information Daily
reported. 
- 10 cities and counties in four provinces fabricated total CNY1.5 billion
fiscal revenue last year: daily cited the National Audit Office 
- In addition to Liaoning, long known for 'falsifying its books', Inner
Mongolia, Yunnan, Hunan and a number of other provinces were also found with
false reporting, added the publication 
- Fabricating economic data overestimates the debt-paying ability of the local
governments, posing risks to the economy: daily. 
***TAKEAWAY: Ahead of Thursday's 2017 GDP data release, this may be a preemptive
move to address criticisms over the quality of its data by displaying that it is
already addressing the issue.
     China must effectively strengthen financial supervision and contain risks
in the banking sector, the official People's Daily said in a commentary. 
- To have effective financial supervision, regulators must have clear identities
without attachment to the industries that they oversee
- Draft rules released on asset management jointly formulated by the so-called
"one bank, three commissions" must be implemented despite industry opposition
- Regulators must not become the "nanny" of the industry: People's Daily.
***TAKEAWAY: China's central authorities is drumming up tighter controls over
the financial sector and promoting the newly formed financial regulatory
structure with  PBOC coordinating efforts among three regulators in securities,
banking and insurance.
     China should closely watch housing price in Tier-3 and Tier-4 cities, Fan
Hengshan, vice secretary-general of the National Development and Reform
Commission, said at a forum on Thursday, Beijing News reported. Fast growth of
home prices in these cities should be curbed, Fan said.
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]