MNI China Daily Summary: Thursday, June 13

     POLICY: China's foreign exchange reserve is "an important and responsible

investor" in the global financial markets, and it operates by market-based

principles while respecting global market rules and industry norm, Pan

Gongsheng, head of China's State Administration of Foreign Exchange, said at the

Lujiazui forum in Shanghai today. China has the "basis, confidence and ability"

to keep the smooth operations of its forex market and the yuan exchange rate

"basically stable at a reasonable and balanced level", Pan said. 

POLICY: China hasn't implemented new restrictions on the trading of rare earths,

said Gao Feng, spokesman of the Ministry of Commerce (MOFCOM) at a briefing

today. Gao attributed a 16% m/m reduction in May rare earths exports to "the

change of the market". Gao said no new information can be given when asked about

the possibility of a Xi-Trump meeting at the G20 summit in Japan later this

month.

     DATA: Foreign direct investment (FDI) into China rose 4.6% y/y to $9.47

billion in May, data released by the MOFCOM today showed. That compared with a

2.8% y/y gain to $9.34 billion in April. FDI into China for the first five

months grew 3.7% y/y totalling $54.61 billion.

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY100 billion via

7-day reverse repos, adding liquidity for the eighth day. This resulted in a net

injection of CNY90 billion given that CNY10 billion of reverse repos matured,

according to Wind Information. The injection aims to stabilize midyear liquidity

conditions, the PBOC said.

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

institutions (DR007) fell to 2.3500% from Wednesday's close of 2.4918%, Wind

Information showed. The overnight repo average decreased to 1.9200% from

Wednesday's 1.9300%.

     YUAN: The yuan weakened to 6.9220 against the dollar from Wednesday's close

of 6.9167. The PBOC set the dollar-yuan central parity rate weaker at 6.8934,

compared with 6.8932 set on Wednesday.

     BONDS: The yield on 10-year China Government Bond was last at 3.2700%, down

from the close of 3.2800 on Wednesday, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index edged up 0.05% to 2,910.74.

Hong Kong's Hang Seng Index decreased 0.05% to 27,294.71.

     FROM THE PRESS: China's State Council urged the further opening of the

Chinese market and the diversification of trade partners during its executive

meeting yesterday, according to a statement on the government website. The

Council also said China should actively boost imports, the statement said.

--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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