MNI China Daily Summary: Wednesday, December 30

POLICY: China has erected over 500,000 5G stations across the country but some telecom carriers have started to dismantle some as they are losing money on a venture that is still missing a viable business model, Wang Yiming, a former vice president of Development Research Center under State Council, said Wednesday.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY40 billion via 7-day reverse repos with the rate unchanged on Tuesday. This resulted in a net injection of CNY30 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 2.4578% from the 2.2322% on Tuesday, Wind Information showed. The overnight repo average increased to 0.6209% from the previous 0.6145%.

YUAN: The currency slightly weakened to 6.5307 against the dollar from 6.5305 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 6.5325 compared with the 6.5451 set on Tuesday.

BONDS: The yield on the 10-year China Government Bond was last at 3.1650%, down from Tuesday's 3.1950%, according to Wind Information.

STOCKS: The Shanghai Composite Index gained 1.05% to 3,414.45, while the CSI300 index increased 1.40% to 5,113.71. Hang Seng Index increased by 2.18% to 27,147.11.

FROM THE PRESS: Chinese regulators' two discussions with the Ant Group on financial regulation since Nov. 2 showed they are determined to break up monopolies by fintech giants and regain control of the financial market, the Economic Daily wrote in an editorial. The control of personal and transactional data by large fintech platforms poses systemic risks, as many users are connected to commercial banks through third-party payment options without oversight, wrote the newspaper. Fintech platforms may also provide illegal lending using technological advantages to bypass geographical and licensing restrictions, the Daily's editorial said.

Over 70% of respondents in a recent survey conducted by the Global Times, a newspaper owned by the Chinese Communist Party, support the aggressive stance adopted by the Ministry of Foreign Affairs, the so-called Wolf-Warrior diplomacy. About 80% of the survey respondents believe the image of China has improved this year, despite western media suggesting growing mistrust or negative views of China in western countries, the newspaper said. Nearly 30% of respondents said the new cold war between U.S. and China is highly likely or has already begun, according to the Global Times survey.

China will employ targeted policy tools as it maintains the continuity of monetary policies and the stability of yuan, the Securities Times reported citing the Q4 meeting of the PBOC monetary policy committee held on Dec. 25. The meeting stressed financial support for technology innovation to help reduce foreign reliance, the newspaper reported citing Ming Ming, the deputy director of CITIC Securities Research Institute. China may not cut policy rates in the short term as the meeting minutes focused on consolidating the reduction of real interest rate on loans, the newspaper said. The committee urged companies and banks to beware of risks and emphasized stable expectations for the yuan following its surge in recent months, according to the report.