MNI China Daily Summary: Tuesday, July 23

     POLICY: China's 12 pilot Free Trade Zones (FTZs) attracted CNY69.47 billion

foreign investment in the first half, a gain of 20.1% y/y, accounting for 14.5%

of FDI into China, Yuan Yuan, a deputy director of the Department of Foreign

Investment Administration at the Ministry of Commerce, said at a briefing today.

     LIQUIDITY: The People's Bank of China injected CNY297.7 billion targeted

medium-term lending facility (TMLF) and CNY200 billion of medium-term lending

facility (MLF) on Tuesday, and the total CNY497.7 billion is CNY4.3 billion less

than the amount of MLF that matured today. The central bank didn't conduct other

open market operations. The liquidity in the banking system is at a reasonable

and ample level, the PBOC said.

     RATES: The 7-day weighted average interbank repo rate for depository

institutions (DR007) fell to 2.5960% from Monday's close of 2.6918%, Wind

Information showed. The overnight repo average decreased to 2.5543% from

Monday's 2.6576%.

     YUAN: The yuan strengthened to 6.8794 from Monday's close of 6.8804. The

PBOC set the dollar-yuan central parity rate weaker at 6.8818 today, compared

with 6.8759 on Monday. 

     BONDS: The yield on the 10-year China Government Bond was last at 3.1475%,

flat from Monday's close, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index rose 0.45% to 2,899.94. Hong

Kong's Hang Seng Index edged up 0.34% to 2,8466.48.

     FROM THE PRESS: The PBOC is expected to inject liquidity into the financial

system this week to offset the maturity of around CNY1 trillion of reverse repos

and the medium-term lending facility (MLF), China Securities Journal reported.

The PBOC may conduct targeted MLF or selectively reduce the reserve requirement

ratio (RRR) to ensure ample liquidity conditions, the newspaper said citing

unnamed market sources. This week's opening of the tech-focused STAR equities

market also provided a good funding environment, the journal said.

     Chinese private investment made a clear recovery in H1 this year, the

Shanghai Securities News reported. More than 10 provinces had private investment

growing over 10%, with growth in Yunnan province exceeded 30%, the newspaper

said. Private investment has accelerated in the manufacturing sector, especially

in high-tech manufacturing and high-end equipment, it said.

--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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