MNI China Daily Summary: Tuesday, November 27

     TOP NEWS: The People's Bank of China (PBOC) on Tuesday published new

regulations calling for tightened supervision over "systemically important

financial institutions" to prevent financial risks. As a policy framework, the

new rules will cover commercial and policy lenders, brokerages and insurers, and

particularly target large-scale financial institutions with complex structures

and interconnected counterparties, according to a statement on the central

bank's website.(See full story: https://www.marketnews.com/node/1839640)

     DATA: China October industrial profits rose 3.6% y/y to CNY548.02 billion,

continuing a downward trend after September's already slowing 4.1% y/y gain.

Accumulated profits for Jan-Oct rose by 13.6% y/y to CNY5.52 trillion,

decelerating from the previous 14.7% y/y, data released by the National Bureau

of Statistics Tuesday showed. The drop in October is mainly due to lower

industrial product ex-factory price gains and y/y base effects, NBS said.

     LIQUIDITY: The PBOC skipped open market operations (OMOs) for a 23rd

straight trading day Tuesday, leaving liquidity unchanged as no reverse repos

mature, according to Wind Information. The central bank said increased fiscal

expenditure near month-end will push up the total liquidity in the banking

system.

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

depository institutions (DR007) increased to 2.6417% from Monday's close of

2.6401%, Wind Information showed. The overnight repo average rose to 2.5479%

from Monday's 2.4886%.

     YUAN: The yuan depreciated to 6.9490 against the U.S. dollar after Monday's

close of 6.9351. The PBOC set the dollar/yuan central parity rate at 6.9463

Tuesday, higher than Monday's 6.9453.

     BONDS: The yield on the benchmark 10-year China Government Bond was last at

3.4000%, down from the closing price of 3.4100% on Monday, according to Wind

Information.

     STOCK: The benchmark Shanghai Composite Index closed 0.04% lower at

2,574.68, and Hong Kong's Hang Seng Index dropped 0.17% to 26,331.96. 

     FROM THE PRESS: Breaking the 3% deficit-to-GDP ratio is no big deal if it

offers an opportunity to support large-scale tax cuts and help sustain fiscal

operations, Time Weekly reported Tuesday, citing Yang Zhiyong from CASS's

National Academy of Economic Strategy. By reducing the corporate tax burden, it

will help to improve productivity and lower prices of goods and services,

helping stimulate consumption, hopefully expanding the tax base and creating a

greater overall tax take for the government, the newspaper said citing Yang.

(Link to the story: https://bit.ly/2SgbKOC)

     Many of China's leading policy planners, including the National Development

and Reform Commission(NDRC), the Ministry of Commerce and local governments,

have launched extensive research on private sector enterprises, planning to

propose a new round of support policies, the Economic Information Daily said

Tuesday. The private sector is expected to gain better access to major areas of

the economy, including electricity, oil, natural gas, railways, aviation,

communications and the military, the newspaper reported, citing Ning Jizhe,

deputy director of the NDRC. (Link to the story: https://bit.ly/2RnbKfi)

     Nanjing's municipal government will set up a CNY10 billion bailout funds

alongside CNY1 billion of refinancing funds to help ease financing difficulties

for private-sector firms, Xinhua news agency reported Tuesday. Beijing's

municipal government will also establish a total CNY2.05 billion fund to support

20 private enterprises in the Daxing district that have 'potential', but facing

financing difficulties, Beijing Daily said on Tuesday. The total includes a

CNY300 million sub-fund for "Internet+" sectors, CNY5 million for cultural and

creative industries, and CNY1.25 billion for the the biomedical industry. (Link

to the story: https://bit.ly/2DMKbIE, https://bit.ly/2TMisgJ)

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

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

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