MNI China Daily Summary: Tuesday, May 19

     TOP NEWS: China on Tuesday began charging anti-dumping and anti-subsidy

duties on barley from Australia at rates of 73.6% and 6.9% for five years, after

an investigation showed the domestic farming industry has been subjected to

substantial damages inflicted by Australian barley exports, the Ministry

Commerce said in a final ruling after investigations that started on Nov. 19 and

Dec. 21 of 2018. 

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

for the second day, leaving liquidity unchanged, according to Wind Information.

Liquidity in the banking system is reasonable and ample, the PBOC said on its

website.

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

institutions (DR007) rose to 1.4395% from 1.2910% on Monday, Wind Information

showed. The overnight repo average increased to 1.3712% from 0.9129%.

     YUAN: The yuan strengthened to 7.1071 against the dollar from 7.1133 on

Monday. PBOC set the dollar-yuan central parity rate lower at 7.0912, down from

the 7.1030 set on Monday.

     BONDS: The yield on 10-year China Government Bonds was last at 2.7150%, up

from the close of 2.7075% on Monday, according to Wind Information.

     STOCKS: The Shanghai Composite Index gained 0.81% to 2,898.58. Hong Kong's

Hang Seng Index rallied 1.89% to 24,388.13.

     FROM THE PRESS: The PBOC should maintain normal monetary policy while

increasing counter-cyclical adjustment, as well as stabilize growth and

employment while preventing risks and restructuring the economy, Guo Shuqing,

party secretary of the central bank, said in a statement on its website, urging

more "cautious" control over financial regulation and more "creative"

implementation of monetary and macro-prudential policies.

     China's power generation increased 5.6% y/y in the first half of May after

turning positive in April, the fastest this year, as improving economy boosted

industrial power consumption, Xinhua News Agency reported. The growth reflected

significant progress in resuming production, Xinhua said citing Shan Baoguo,

deputy chief economist at the State Grid Energy Research Institute. Power

generation grew 0.3% y/y in April, following 4.6% decline in March, Xinhua

added.

     China should encourage SMEs to gain capital through innovative bonds and

easing requirements, the Securities Times reported a policy proposal by Lai

Xiufu, the director of the trust department of the China Banking and Insurance

Regulatory Commission. Regulators should accept SMEs' smaller-size net assets

and higher debt ratios when they apply for bond issuance, and institutional

investors could be encouraged to invest in some of the SME bonds, the newspaper

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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