MNI China Daily Summary: Wednesday, August 19

EXCLUSIVE: China, already mulling debt relief for partners in its Belt and Road initiative, should take a leading role in negotiating restructurings for developing nations around the globe which are struggling from the economic impact of the Covid-19 pandemic, policy advisors told MNI. Other major economies, including the U.S., have failed so far to take the initiative to assist indebted developing countries, and China should step in to spearhead the necessary international cooperation, the advisors said.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY150 billion via 7-day reverse repos with the rate unchanged. This resulted in a net injection of CNY10 billion due to the maturity of CNY140 billion of reverse repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.2051% from Tuesday's close of 2.1868%, Wind Information showed. The overnight repo average decreased to 2.1530% from the previous 2.1161%.

YUAN: The currency strengthened to 6.9168 against the dollar from 6.9257 on Tuesday. The PBOC The PBOC set the dollar-yuan central parity rate lower for a sixth trading day at 6.9168, following Tuesday's 6.9325.

BONDS: The yield on 10-year China Government Bond was last at 2.9900%, up from the close of 2.9750% on Tuesday, according to Wind Information.

STOCKS: The Shanghai Composite Index lost 1.24% to 3,408.13, while the CSI300 index fell 1.50% to 4,740.68. Hang Seng Index edged down 0.74% to 25,178.91.

FROM THE PRESS: China will likely refrain from drastically reducing interest rates and RRRs in Q3 as the recovery gains traction, though policies might not lean towards tightening given the worsening international environment, the China Daily reported citing Wang Qing, the chief macro analyst at Golden Credit Rating. Future policy directions will focus more on structural changes, such as guiding existing financial resources into the non-financial sector, the newspaper said referring to Premier Li Keqiang's executive meeting notes from Monday.

Land sales in some of China's top cities are cooling as authorities in housing hotspots began to tighten regulations from July, the Economic Information Daily reported. Local authorities including Beijing, Hangzhou, and Nanjing city have significantly reduced land supply, especially high-value land parcels in the past month, the newspaper said. Land premium rates fell by 0.2 pp to 16.1% in July from June, the newspaper said citing data by CRIC. Land transactions have declined in the last two weeks with volume last week down to the lowest level since Q2, the newspaper said citing CRIC.

A Chinese vaccine against African swine fever will undergo expanding clinical trials and be prepared for production, the official Xinhua News Agency said Tuesday citing the Ministry of Agriculture and Rural Affairs. The vaccine appeared to be safe when applied to commercial piglets and sows, Xinhua said citing Bu Zhigao, head of the Harbin Veterinary Research Institute. Pork prices in China have stayed near record levels in the last two years as the ASF decimated herds.