MNI China Daily Summary: Tuesday, January 7

     DATA: China's forex reserves rose by USD12.3 billion to USD3.1079 trillion

in Dec 2019 from USD3.0956 trillion in November, the State Administration of

Foreign Exchange (SAFE) said on Tuesday. The "small-scale" increase was due to

exchange rate conversions and asset price changes, it said. The value of the

reserves was 1.1% higher than at the beginning of this year, according to SAFE

data. The yuan gained 0.85% against the U.S. dollar through December, Wind data

showed.

     LIQUIDITY: The People's Bank of China (PBOC) skipped open market

operations, leaving liquidity unchanged as no reverse repos mature today,

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 2.0408% from 1.8516% on Monday, Wind Information

showed. The overnight repo average increased to 1.2119% from 0.9986% on Monday.

     YUAN: The yuan strengthened to 6.9376 against the dollar from 6.9745 on

Monday, the highest since August. PBOC set the dollar-yuan central parity rate

lower at 6.9690, compared with last Monday's 6.9718.

     BONDS: The yield on 10-year China Government Bonds was last at 3.1625%, up

from the close of 3.1575% on Monday, according to Wind Information.

     STOCKS: The Shanghai Composite Index gained 0.69% to 3,104.80. Hong Kong's

Hang Seng Index increased 0.34% to 28,322.06.

     FROM THE PRESS: China and the U.S. shouldn't rush to sign the phase one

trade deal as some details were yet to be finalised, the Global Times said in an

editorial late Monday. While the U.S. has disclosed information on Chinese

purchases of U.S. products as well as the date and location of the deal signing,

these details haven't been confirmed by Chinese officials, the newspaper said.

Both sides should focus on finalizing the agreement and committing to its

implementation, the newspaper said.

     China won't change its agricultural import quotas to accommodate its

commitment of increasing grain purchases from the U.S., Caixin reported citing

Han Jun, a Vice Minister of Agriculture and Rural Affairs. China maintains corn

import quotas at 7.2 million tons for 2020 with 60% kept for state-owned

enterprises (SOE), while 90% of the 9.64 million tons wheat for 2020 is also

reserved for SOEs.

--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

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