MNI China Daily Summary: Thursday, November 28

     EXCLUSIVE: The U.S. may send officials to China for talks in order to

clinch a phase-one preliminary trade deal by the end of the year, a senior

advisor to China's cabinet told MNI, adding that the main issue to be resolved

was whether the U.S. would roll back tariffs. "Other issues are almost settled,"

Wang Huiyao, the founder and president of the Center for China and Globalization

in Beijing, said in an interview on Wednesday. "We are now waiting for Trump to

decide whether some tariffs will be removed," he said. 

     POLICY: China will continue to increase the imports of meat and sell

supplies from government reserves to ease a pork shortage and meet rising demand

ahead of the Chinese New Year in late January, spokesman Gao Feng of the

Ministry of Commerce said at a briefing today.

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

for the seventh day, leaving liquidity unchanged as no reverse repos mature

today, according to Wind Information. The total liquidity in the banking system

is reasonable and ample, PBOC said.

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

institutions (DR007) rose to 2.5962% from Wednesday's close of 2.5041%, Wind

Information showed. The overnight repo average fell to 2.0609% from Wednesday's

2.2182%. 

     YUAN: The yuan weakened to 7.0328 against the dollar from Wednesday's close

of 7.0260. PBOC set its central parity rate lower at 7.0271, the strongest in

five days, against Wednesday's 7.0349.

     BONDS: The yield on 10-year China Government Bond was last at 3.175%, down

from the close of 3.1850% on Wednesday, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index lost 0.47% to 2,889.69, as

steel, metal and cement stocks fell. Hong Kong's Hang Seng Index decreased 0.22%

to 26,893.73.

     FROM THE PRESS: China moved to tighten regulations on capital for

infrastructure projects, stipulating that borrowed funds and shareholder loans

should not be used as project capital, Xinhua News Agency reported citing a

document released by the State Council late Thursday. Raising capital for

investment projects should not increase the hidden debts of local government or

violate requirements on the asset-liability ratio of state-owned enterprises,

according to the document.

     The PBOC does not need to tighten monetary policy despite surging CPI, its

own newspaper Financial News reported citing Ming Ming, an analyst with Citic

Securities. China's CPI may peak in Q1, and the current inflation, driven by

high pork prices, isn't likely to lead to broad inflation as the money supply

stays stable, the newspaper said citing Wang Jingwen, an analyst with Mingsheng

Securities.

     The government should keep the real estate market stable and manage

expectations for housing prices, according to a commentary published in the

China Securities Journal. Tight controls over speculation in the real estate

market should be maintained, and the government should also prevent a sudden

drop in prices, 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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