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DATA: China inflation surged to 4.5% y/y las month, the highest in almost
eight years, after 3.8% in October, as a pork supply shortage persists.
Economists had expected 4.3%. It exceeded the government-imposed 3% ceiling for
a second month. Producer prices slightly eased to -1.4% y/y from -1.6% in
October, better than economists' -1.5% projection.
DATA: China's aggregate financing to the economy surged to CNY1.75 trillion
in November, almost three times October's level and beating market consensus of
CNY1.5 trillion. New loans totalled CNY1.39 trillion, more than the projected
CNY1.2 trillion and doubling October's CNY661.3 billion. M2 rose 8.2% y/y,
slowing from 8.4% in October, and below the 8.4% forecast by most economists.
LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
for the 15th day, leaving liquidity unchanged, according to Wind Information.
Total 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) fell to 2.3724% from 2.4510% on Monday, Wind Information
showed. The overnight repo average decreased to 2.1838% from 2.3243% on Monday.
YUAN: The yuan strengthened to 7.0385 against the dollar from 7.0403 on
Monday. PBOC set the dollar-yuan central parity rate lower at 7.0400 on Tuesday
from 7.0405 Monday.
BONDS: The yield on 10-year China Government Bonds was last at 3.1900%,
down from the close of 3.2000% on Monday, according to Wind Information.
STOCKS: The Shanghai Composite Index edged up 0.10% to 2,917.32, as
technology, semiconductor, and 5G shares advanced. Hong Kong's Hang Seng Index
decreased 0.22% to 26,436.62.
FROM THE PRESS: China still needs to maintain medium-to-high rate of
growth, though on the basis of "quality and efficient return," Wang Yiming,
Deputy Director at the Development Research Center of the State Council wrote in
People's Daily. For China as the biggest developing country, development is the
"foundation and essential" to solving all problems, the influential advisor Wang
wrote. Stabilizing growth must be placed in important position, countercyclical
adjustment must be strengthened and the economy shall operate in "reasonable
range," Wang said. If growth rate is too low, employment won't be assured,
structural adjustment won't progress and the macro level will be difficult to
stabilize, Wang wrote.
Real estate regulations in China will remain tight to keep the market
stable despite some cities loosening the home purchase limits to attract new
talents, the Securities Times said in a front page commentary. Regulations to
combat speculation and stabilize land prices and housing prices will not change,
the newspaper said.
China will continue to lower tariffs levels, reduce costs and boost imports
to promote trade, the China Securities Journal reported citing Li Xingqian, head
of the Foreign Trade Bureau at the Ministry of Commerce. China will also
actively participate in the negotiation of the WTO Trade Facilitation Agreement
and fully implement the agreement by February 2020, the newspaper cited Li as
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