MNI China Daily Summary: Tuesday, December 10

     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

saying.

--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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]