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MNI China Daily Summary: Thursday, May 28

     EXCLUSIVE: China's reviving real estate market looks set to be a driver of
economic recovery from the Covid-19 slowdown, likely prompting Beijing to hold
off from moving ahead with a tax on property, policy advisors told MNI. The
central government recently toned down long-considered plans for the imposition
of a property tax, stating in a document on May 18 that legislation for the levy
should be introduced "properly". This word contrasted with "steadily", which it
had used in 2019, and probably indicates a more cautious approach, noted Zhang
Yiqun, director of a fiscal studies institute affiliated with the Jilin province
finance department.
     POLICY: China will likely see positive growth this year even if there isn't
a quantifiable GDP goal, Premier Li Keqiang said Thursday in his annual address
to the media. China has set six tasks instead of a hard growth target, including
protecting jobs, people's welfare and businesses. Achieving these goals will
lead to positive and high growth, he said. According to Li, China has fiscal,
financial and social welfare policies in reserve to manage future crisis and
will enact them in a timely fashion, Li said at the conclusion of the National
People's Congress.
     LIQUIDITY: The People's Bank of China (PBOC) injected CNY240 billion via
7-day reverse repos with the rate unchanged at 2.2% on Thursday, according to a
statement on the PBOC website. The injection aims to offset the impact of
government bond issuance and enterprise income tax settlement and other factors,
the PBOC said. It also aims to keep liquidity reasonable and ample, the PBOC
added.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.1825% from Wednesday's close 2.0248%, Wind
Information showed. Overnight repo average increased to 2.1102% from 2.1093%
yesterday.
     YUAN: The yuan weakened to 7.1600 against the dollar from Wednesday's close
7.1540. PBOC set the dollar-yuan central parity rate higher at 7.1277, compared
with the 7.1092 set on Wednesday.
     BONDS: The yield on 10-year China Government Bonds was last at 2.6900%,
down from Wednesday's close of 2.7100%, according to Wind Information.
     STOCKS: The Shanghai Composite Index gained 0.33% to 2,846.22. Hong Kong's
Hang Seng Index lost 0.72% to 23132.76. 
     FROM THE PRESS: The Canadian court ruling to keep Huawei CFO Meng Wanzhou
in custody may further worsen bilateral relations between Canada and China
including trade, Global Times reported by quoting He Weiwen, a former senior
trade official and an executive council member of the China Society for World
Trade Organization Studies. 
     China can cut rates further as the CPI continues to fall, helping reduce
high financing costs for small businesses, which is the core challenge in the
monetary environment, Securities Times said in a commentary. 
     China is publishing a series of documents to overhaul its financial system,
covering reforms in capital markets and bond markets, and the recapitalisation
of small-and-medium-sized banks, the People's Bank of China said.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

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