MNI China Daily Summary: Tuesday, March 6

     TOP NEWS: China's National Development and Reform Commission is looking to

reform the playing field for foreign investment into China. The NDRC said

Tuesday it will cut restrictions for foreign investment as China furthers

efforts to attract offshore investors. The economic planning agency aims to

apply nationwide the less-restrictive banned list used for China's free-trade

zones, which sets fewer impediments and has more preferential policies for

foreign companies, Ning Jizhe, deputy director of the NDRC said at a press

conference.

     MARKETS: The PBOC skipped its open market operations on Tuesday, citing

current liquidity conditions at a "relatively high" level. The move resulted in

unchanged liquidity Tuesday, with no reverse repos maturing. CFETS-ICAP's

money-market sentiment index closed at 44 on Monday, up from 42 on Friday.

     RATES: Money market rates fell after the PBOC kept the liquidity condition

unchanged. The 7-day repo average fell to 2.8657% from Monday's average of

2.8755%. The overnight repo average was at 2.5913% compared with Monday's

2.6288%.

     YUAN: The yuan fell against the U.S. dollar after the People's Bank of

China set a stronger daily fixing. The yuan was last at 6.3466 against the U.S.

unit, dropping 0.09% compared with the official closing price of 6.3406

yesterday. The PBOC set the yuan central parity rate vs the U.S. dollar at

6.3386, weaker than Monday's 6.3431. 

     BONDS: The yield on benchmark 10-year China government bonds was last at

3.8350%, down from the previous close of 3.8550%, according to Wind.

     STOCKS: Stocks rose in Shanghai, led by the coal and medical sectors. The

benchmark Shanghai Composite Index closed up 1.00% AT 3,289.64. Hong Kong's Hang

Seng Index was 2.25% higher at 30,559.92.

     FROM THE PRESS: China may begin a round of reduction in banks' required

reserve ratios this year to meet liquidity demand, reported China Securities

Journal, citing analysts. The People's Bank of China is moving towards

price-based tools for managing monetary supply and away from quantity-based

tools, after the government scrapped targets of growth for M2 and social

financing, the official newspaper said. Policymakers will take a more flexible

approach free from meeting targets, it said.

     China plans to roll out measures to cut debt holdings by state-owned

companies in the first half of this year, China Securities Journal reported,

citing Xiao Yaqing, the chairman of State-owned Assets Supervision and

Administration Commission. The commission has begun soliciting input on

guidelines for SOEs' deleveraging, debt reduction and financial risk prevention,

Journal said, citing Xiao. Xiao said SOEs' debt level has declined, with

debt-to-asset ratio averaging 66.3% at the end of 2017, which was a reduction of

0.4 percentage point from a year ago, according to the Journal.

     The National Development and Reform Commission, China's top planner, plans

to raise the bar for cities that can apply to construct subways, the Paper

reported late Monday, citing a draft of rules issued to solicit feedback. Cities

that want to build subways must have fiscal revenue of at least CNY30 billion, a

bar that is three times more than the previous standard, Paper said. The

requirements for GDP and population sizes will also be increased to pass

consideration, Paper said.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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