MNI China Daily Summary: Thursday, November 21

     EXCLUSIVE: China has no more concessions to offer the U.S. to secure a

potential interim "phase one" deal to wind down the two countries' 16-month

tit-for-tat trade war, government advisors told MNI. "I think China has offered

what it can offer in the latest 13th round of negotiations," said Lv Xiang, a

researcher from the Chinese Academy of Social Science which is overseen by the

State Council. "China is waiting for Trump to make his decision," he said,

adding that previous Chinese offers of promises to buy U.S. agricultural

products would be conditional on measures taken by the U.S.

     TRADE: China is willing to work together with the U.S. to reach a phase-one

agreement, said Gao Feng, spokesman of the Ministry of Commerce at a briefing

today. Vice Premier Liu He held a constructive discussion with U.S. Trade

Representative Robert Lighthizer and Secretary of Treasury Steven Mnuchin on Nov

16, and the two sides will continue to maintain close communication, Gao said

without disclosing details.

     POLICY: China still has the capacity, including fiscal resources, to

maintain its economic growth goal above 6% next year, Wang Xiaoguang, deputy

director of economic research at the Party School of Central Committee of

Chinese Communist Party (CCP), said today at a briefing by senior scholars from

the school on the CCP's Fourth Plenum, which took place last month.

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

for the second consecutive day, leaving liquidity unchanged, according to Wind

Information. The level of liquidity in the banking system is reasonable and

ample, the PBOC said. 

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

institutions (DR007) decreased to 2.3279% from Wednesday's close of 2.3847%,

Wind Information showed. The overnight repo average fell to 1.8440% from

Wednesday's 1.8905%. 

     YUAN: The yuan weakened to 7.0374 against the dollar from Wednesday's close

of 7.0369. PBOC set the dollar-yuan central parity rate lower for a fourth day

at 7.0217, compared with Wednesday's 7.0118.

     BONDS: The yield on 10-year China Government Bond was last at 3.1675%, down

from the close of 3.1700% on Wednesday, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index edged down 0.25% to

2,903.64, as financial and consumer stocks fell. Hong Kong's Hang Seng Index

tumbled 1.57% to 26,466.88.

     FROM THE PRESS: The PBOC should maintain a prudential bias of its monetary

policy and increase counter-cyclical adjustments instead of monetary easing to

counter economic downward pressure, as any easing signals would push up housing

prices and inflation, according to an editorial in the 21st Century Business

Herald. The current international monetary environment doesn't support any

loosening because the adoption of negative interest rates in some countries

indicates increased global risk, the newspaper said.

     China may increase the issuance of special purpose government bonds to CNY3

trillion in 2020, the China Securities Journal reported citing Ming Ming, Deputy

Head of the Research Department at Citic Securities. The central government will

tolerate an increase in the deficit in 2020 and use innovative policies to

alleviate the debt burden of local governments, the newspaper said citing Zhu

Jianfang, the Chief Economist with Citic Securities. 

     The China Banking and Insurance Regulatory Commission will guide banks to

increase lending to small companies and stabilize lending interest rates, the

China Securities Journal reported citing the Commission. The regulator will also

promote the reform of the commercial banking lending model, including measure

such as reducing the reliance on collateral, increasing the proportion of credit

loans, and improving the loan renewal business, the newspaper 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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