MNI China Daily Summary: Tuesday, January 14

     BEIJING (MNI) - POLICY: China's December trade performance reached a

record, with both imports and exports surged to the most ever, helped by easing

trade tensions with the U.S. and higher commodity prices, Zou Zhiwu, a spokesman

of the General Administration of Customs, told reporters on Tuesday. U.S.

Treasury's removal of China's designation as a currency manipulator is "the

right choice with positive implications," Zou said.

     DATA: China's exports grew at 5% y/y in 2019 when valued in yuan while

imports increased 1.6% y/y. However, total trade value calculated in dollar

fell, while exports rose 0.5%, according to Zou of the customs authority. Trade

surplus rose 25.4% from a year ago to CNY2.92 trillion, data showed.  

     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 relatively high, PBOC said.

     RATES: The seven-day weighted average interbank repo rate for depository

institutions (DR007) rose to 2.6865% from Monday's close of 2.4451%, Wind

Information showed. Overnight repo average increased to 2.5336% from Monday's

2.0598%.

     YUAN: The currency strengthened to 6.8854 against the dollar from Monday's

close of 6.8942. PBOC set the dollar-yuan central parity rate 309 bps lower at

6.8954.

     BONDS: The yield on 10-year China Government Bonds was last at 3.1300%, up

from Monday's close of 3.1175%, according to Wind Information.

     STOCKS: The Shanghai Composite Index fell 0.28% to 3,106.82. Hong Kong's

Hang Seng Index lost 0.24% to 28,885.14.

     FROM THE PRESS: The yuan is supported by positive factors this year

including inflow of investments in Chinese securities, the Financial News, a

PBOC-owned newspaper, reported citing Wen Bin, the chief analyst at China

Minsheng Bank. The index of yuan against the currency basket may rise in the

short term given the easing trade tensions and a strong expectation of a stable

Chinese economy, the newspaper said citing Cao Yuanyuan, technical director at

the research department of Golden Credit Rating.  

     The phase one deal with the U.S. is a mutually beneficial deal even if it's

limited in scope, according to a WeChat blog re-posted on the homepage of Xinhua

News Agency. China's philosophy of "seeking agreement while keeping differences"

broke the stalemate as the U.S. had insisted on a "grand bargain" to address all

issues, said the blog titled Longdongqiang. While critics argued the agreement

is too fragile and failed to address both sides' core demands, it allowed both

sides to keep their positions on principles of equality and mutual respect, the

blogger said according to Xinhua's repost.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

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