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     TOPS NEWS: China's latest Politburo meeting emphasized the importance of
stable economic growth, putting maintained economic growth higher up the agenda
and hinting at more easing policies, a source close to the People's Bank of
China told MNI. "Although the policymaker has not addressed the change directly,
there are already signs," the PBOC source said. "So we would see more RRR
(reserve requirement ratio) cut and M2 growth is expected to rebound above 9%
this year," he added. Monday's Politburo meeting stressed that meeting the
annual target "will require painstaking efforts", in sharp contrast to Premier
Li Keqiang's press conference during National People's Congress Session a month
ago stating the government is very confident about meeting the annual growth
     POLICY: China's housing sales volume this year may drop as much as 5% on
tight control policies while prices may stay flat, S&P Global Ratings said
Wednesday in a webcast. Momentum in markets of lower-tiered cities, which drove
the growth of the sector last year, is unlikely to be sustained, said Cindy
Huang, director of the corporate ratings. The government will maintain tight
controls with campaign against shadow banking restricting developers' financing
and thus growth of the sector, S&P said.
     LIQUIDITY: The PBOC refrained from new Open Market Operations on Wednesday,
stating that the cut in required reserve ratio taking effect today will inject
liquidity to absorb the impact from  maturing reverse repos. This resulted in
net drain of CNY150 billion as the same amount of reverse repos matured today,
said Wind Information. CFETS-ICAP's money-market sentiment index closed at 76 on
Tuesday, down from 81 on Monday.
     MONEY MARKET RATES: 7-day repo average dropped to 2.9991% from 3.0358% on
Tuesday, after the PBOC net drained CNY150 billion. The overnight repo average
fell to 2.7806% from Tuesday's 2.8089%.
     YUAN: The yuan fell 0.03% to 6.3145 against the U.S. dollar, compared with
the official closing price of 6.3092 yesterday. The PBOC set the yuan central
parity rate stronger for the first time in six days at 6.3066, compared with
Tuesday's 6.3229.
     BONDS: The yield on benchmark 10-year China Government Bond was last at
3.6100%, up from the previous close of 3.5750%, according to Wind Information.
     Stocks: Shares declined in Shanghai, led by property companies on recently
issued property controls in areas such as Hainan and Shenyang, with Fujian
Sannong Group down by close to 6%. The benchmark Shanghai Composite Index closed
0.35% lower at 3,117.97. Hong Kong's Hang Seng Index dropped 1.07% to 30,308.59.
     FROM THE PRESS: Chinese officials are drafting a guideline to expand
imports to further balance trade with other countries, China Securities Journal
reported, citing unidentified people with knowledge of the issue. The guidance
will include details about China's lowering duties for consumer goods such as
medicine and necessities, policies to encourage imports of advanced technology
and key machine components, the newspaper said, citing experts including Zhao
Ping, director of international trade research department at China Council for
the Promotion of International Trade. Tariff reduction should be based on
China's reality, differentiated and step-by-step to allow domestic companies to
adjust, Bai Ming, deputy head of international market research institute under
the MOFCOM, told the journal.
     China's monetary policy will likely see more minor adjustments even though
the overall principle is prudent and neutral, China Securities Journal said in a
commentary. There may be more targeted small changes, the newspaper said. A
Politburo meeting on April 23 attended by top leaders including Chairman Xi
Jinping didn't mention controlling M2 growth, which may hint monetary policy
could lean neutral-to-loose if the economy needs it, the journal said. It is not
necessary for monetary policy to be loosened too much to prevent too much credit
in the financial market, the newspaper said.
     China must acquire critical advanced technologies such as semiconductors so
that other countries wont' be able to blunt its rise, the People's Daily said in
a commentary. China must be determined to make break-through in core
innovations; it may also import some technology and seek to advance it, the
daily said. ***Comment: After the U.S. banned selling equipment including chips
to Chinese mobile phone maker ZTE, causing the company to halt production, China
iterated the importance of innovation and producing its own technological
components such as chips.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

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