MNI China Daily Summary: Tuesday, December 29

POLICY: The bilateral investment accord between the E.U. and China has has made strong progress in recent weeks and there are good hopes of a deal being concluded in the near future, said Wang Wenbin, spokesman for China's Foreign Ministry, laying out China's most upbeat statement on the issue in recent days.

LIQUIDITY: The PBOC injected CNY20 billion via 7-day reverse repos with the rate unchanged. This resulted in a net injection of CNY10 billion given the maturity of CNY10 billion of reverse repos today, according to Wind Information. The operations aim to maintain stable liquidity at the end of the year, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.2322% from the 2.0772% on Monday, Wind Information showed. The overnight repo average decreased to 0.6145% from the previous 0.6485%.

YUAN: The currency strengthened to 6.5305 against the dollar from 6.5375 on Monday. The PBOC set the dollar-yuan central parity rate higher at 6.5451, compared with the 6.5236 set on Monday, marking the biggest increase since Nov.20th.

BONDS: The yield on the 10-year China Government Bond was last at 3.1950%, down from Monday's 3.2000%, according to Wind Information.

STOCKS: The Shanghai Composite Index lost 0.54% to 3,379.04, while the CSI300 index down 0.42% to 5,042.94. Hang Seng Index increased 0.96% to 26568.49.

FROM THE PRESS: China will continue to allow more share offerings as a greater source of capital raising and reduce the reliance on debt, the Financial News reported on Monday citing Yi Huiman, chairman of the China Securities Regulatory Commission. China will also promote competition and access to the stock market, said Yi. He said that China would support capital market innovation and the use of long-term incentives, according to the report.

Three provinces in southern China have been ordered to remove power usage restrictions, according to the China Securities Journal citing an unnamed official from the National Development and Reform Committee. The government has ordered coal mines to increase production and is asking plants to stock coal, as about half of China prepares for a cold spell with temperatures dropping more than 10 degrees.

Chinese authorities are canceling gatherings and restricting the operating capacity of entertainment facilities to contain rising cases of Covid-19, the China Daily reported on Monday. Fifteen local cases were reported on Dec. 28, including seven in Beijing and eight in Liaoning province, according to data from the National Health Commission. China has banned flights from the U.K. after reports of a virus variant, the China Daily said. China plans to inoculate 50 million people with its domestically developed vaccines by mid-February, the newspaper reported.