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     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
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