MNI China Daily Summary: Thursday, November 12

EXCLUSIVE: China should seek to join the 11-nation CPTPP Asia-Pacific trade agreement and enact market-oriented reforms if the U.S. enters the pact under a future President Joe Biden, a senior Chinese foreign policy advisor told MNI. In response to a more multilateral approach under the next U.S. administration, Beijing should also accelerate the negotiation of the China-EU Investment Agreement as well as the Regional Comprehensive Economic Partnership with countries in the Asia Pacific region, said Wang Huiyao, the founder of Center for China and Globalization and an advisor to the State Council.

POLICY: China is maintaining an official diplomatic silence on the outcome of the U.S. election as publically at least, as Beijing clearly doesn't want to unnecessarily rile President Donald Trump, who will remain in office till early next year, a former senior diplomat told MNI. Noting that countries traditionally allied to Washington, including the U.K., Japan and Australia, have sent congratulatory message to the Democratic candidate, the ex-official said Beijing has a policy of "not interfering other countries domestic affairs".

POLICY: G20 nations should step up policy collaboration to tackle the recession following the pandemic, said Zhu Guangyao, former vice minister of finance at the 6th China and Globalization Forum 2020 in Beijing on Thursday. The European Central Bank and the Bank of Japan are adopting negative interest rates, while the yield on the 10-year U.S. Treasury bond is also in the negative range after adjusting for inflation. "This (monetary policy) requires coordination," said Zhu.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY120 billion via 7-day reverse repos with rates unchanged at 2.2% on Thursday. This resulted in a net injection of CNY90 billion given the maturity of CNY30 billion of reverse repos today, according to Wind Information. The operations aim to maintain the liquidity in the banking system reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.5829% from close of 2.3857% on Wednesday, Wind Information showed. The overnight repo average rose to 2.5649% from the previous 2.3467%.

YUAN: The currency weakened to 6.6297 against the dollar from 6.6200 on Wednesday. The PBOC set the dollar-yuan central parity rate higher at 6.6236 for a second day, compared with the 6.6070 set on Wednesday.

BONDS: The yield on 10-year China Government Bond was last at 3.2550%, up from Wednesday's 3.2450%, according to Wind Information.

STOCKS: The Shanghai Composite Index declined 0.11% to 3,338.68 while the CSI300 index increased by 0.07% to 4908.46. Hang Seng Index lost 0.22% to 26169.38.

FROM THE PRESS: The use of perpetual loans is seen by the PBOC as optimal in alleviating capital shortages in the real economy and replenishing large banks' capital, the PBOC-run Financial News said. The central bank is likely to further boost market-based Central Bank Bill Swap (CBS) operations and extend their use to support small-to-medium banks, the newspaper said.

China is right to take active anti-trust measures to prevent E-commerce sites from monopoly behaviour as it represses innovation and drives the accumulation of disproportionate wealth, the 21st Business Herald reported on Thursday citing Zhou Xiaochuan, the former President of the PBOC. China should beware how these firms control user data and personal information as they are now serving many public service areas, said Zhou. Better governance of the Internet is urgently needed to improve the efficiency of the digital economy and the Chinese voice in the global cyberspace, Zhou told the Herald.

China should see a more controlled pace of lending growth in November and December, taking total aggregate new lending for the year to just under CNY20 trillion, the Financial News reported citing Wang Yifeng, an analyst from the Research Institute of Everbright Securities. China is also likely to avoid strong credit tightening in 2021, Wang said. Social financing in November is likely to be around 13.5% to 13.7%, compared with 13.7% in October, he said.