MNI China Daily Summary: Tuesday, October 8

     TRADE: Chinese Vice Premier and top trade negotiator Liu He will lead

China's team to Washington for the latest round of trade talks with senior U.S.

Trade Representative Robert Lighthizer and U.S. Secretary of the Treasury Steven

Mnuchin on Oct 10-11, according to a statement on the website of the Ministry of

Commerce.

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

(OMOs), net-draining of CNY250 billion given the same amount of reverse repos

matured, according to Wind Information. The total liquidity in the banking

system is relatively high, the PBOC said.

     YUAN: The yuan strengthened to 7.1295 against the dollar from the close of

7.1381 on September 30, the last trading day before the Oct 1-7 holidays. The

PBOC set the dollar-yuan central parity rate stronger at 7.0726, compared with

7.0729 on Sept 30.

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

institutions (DR007) fell to 2.6797% from the close of 2.8510% on Sept 30, Wind

Information showed. The overnight repo average decreased to 2.6301% from the

previous close of 2.6622%. 

     BONDS: The yield on 10-year China Government Bonds was last at 3.1025%,

down from the close of 3.1375% on Sept 30, according to Wind Information. 

     STOCKS: The Shanghai Composite Index edged up 0.29% to 2,913.57. Hong

Kong's Hang Seng Index increased 0.28% to 25,893.40. 

     FROM THE PRESS: China's Q3 GDP growth could slow to an annualised 6.1%

given existing downward pressure on the economy, China Business News reported

citing Wang Jun, an economist with ZY Bank. While growth could slow on an

annualised basis, macroeconomic indicators could improve from the weak

performance in July and August because the leading PMI indicator rose 0.3

percentage point to 49.8 in September. Market demand and corporate confidence

have stabilised, helped by increased policy support, the newspaper said.

     The PBOC will use targeted reserve requirement ratio cuts and targeted

medium-term lending facility (TMLF) to ensure ample liquidity in mid and late

October, the Shanghai Securities News reported. The central bank could also

inject liquidity via reverse repos in late October, given the demands of tax

payments and the front-loading of next year's quota of local government special

bonds occurring this month, the newspaper said citing unnamed analysts.

     China plans to build 127 key railway projects totaling 1,586 kilometres

with construction beginning 2020, and the new railways were expected to link 80%

of China's major cargo ports, large-scale industrial and mining enterprises with

annual traffic of over 1.5 million tons as well as the new logistics parks,

Xinhua News Agency reported citing the Nation Development and Reform Commission.

--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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