MNI China Daily Summary: Tuesday, May 21

     TRADE: Foreign investments in China won't be affected despite U.S. threats

to hike tariffs, the Ministry of Foreign Affairs spokesman Lu Kang said in a

briefing today. When asked if the tariff hikes force manufacturers move

production from China to other Asian countries as the U.S. president claimed, Lu

said the U.S. government often releases information for domestic political gain

while disregarding facts. While the U.S. violating trade rules may cause some

disruptions in international markets, companies invest based on economic

prospects, Lu said.

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY80 billion by

7-day reverse repo today. The net injection was the same amount as no reverse

repos matured, according to Wind Information. The reverse repo aims to offset

the impact of the tax season and government bond issuance, the PBOC said.

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

institutions (DR007) increased to 2.7500% from Monday's close of 2.6931%,

according to Wind Information. The overnight repo average rose to 2.7400% from

2.5907% on Monday.

     YUAN: Yuan weakened to 6.9166 against the U.S. dollar from Monday's close

of 6.9141. The PBOC set the dollar-yuan central parity rate higher for a ninth

trading day at 6.8990, bringing to 2.0% the accumulated weakened range since May

9.

     STOCKS: The benchmark Shanghai Composite Index rose 1.23% to close at

2,905.97, held by a strong rally of 5G shares following Huawei CEO Ren

Zhengfei's tough stance against the U.S. blacklisting the company. Rare-earth

stocks also soared after Chinese President Xi Jinping visited a domestic

rare-earth mining base yesterday. Hong Kong's Hang Seng Index fell 0.47% to

27,657.24.

     BONDS: The yield on the 10-year China Government Bond was last at 3.2900%,

up from Monday's close of 3.2650, according to Wind Information.

     FROM THE PRESS: Ren Zhengfei, founder and CEO of Huawei Technologies Co.

that is barred by Washington from sourcing in the U.S., said his company has a 2

to 3 year lead over global peers in 5G technology and won't be impeded by the

ban, China Central Television reported. Ren also dismissed a 90-day postponement

of the ban handed down by the U.S. Commerce Department, saying it is meaningless

to the company.

     The People's Daily, the official newspaper of the Communist Party of China,

doubted the sincerity of the U.S. resolving the trade war by negotiations in a

commentary, claiming that some American politicians are hostile towards China

and want to suppress its rise. U.S. hostility reflects a wrong and outdated

mindset mired in the ideological bias of the Cold War, the newspaper said. 

     China's top housing regulator intends to tighten control over the property

market and warned cities with soaring property prices twice in the last month,

according to a report in the Securities Daily. The regulator signalled that

allowing local governments to regulate its own markets isn't easing control, 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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]