MNI China Daily Summary: Wednesday, August 28

     LIQUIDITY: The People's Bank of China (PBOC) kept a tight hold on interbank

liquidity conditions through August, according to the latest MNI liquidity

survey, although there was still an overall perception of looser central bank

policy. MNI's Liquidity Conditions Index inched higher to 65.4 in August after

settling at 64.3 in July, indicating moderately tighter conditions than in the

previous month. 

     LIQUIDITY: The PBOC injected CNY60 billion via 7-day reverse repos, adding

liquidity for a second consecutive day. This offsets the maturity of CNY60

billion in reverse repos, leaving liquidity unchanged, according to Wind

Information.

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

institutions (DR007) rose to 2.7144% from Tuesday's close of 2.7056%, Wind

Information showed. The overnight repo average fell to 2.5979% from Tuesday's

2.6710%.

     YUAN: Dollar-yuan was last at 7.1635 from Tuesday's close of 7.1670. The

PBOC set the dollar-yuan central parity rate higher at 7.0835, compared with

7.0810 on Tuesday.

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

3.0475%, down from 3.0500% on Tuesday, according to Wind Information.

     STOCKS: The benchmark Shanghai Composite Index decreased 0.29% to 2,893.76.

Hong Kong's Hang Seng Index edged down 0.19% to 25,615.48.

     FROM THE PRESS: China's State Council has released 20 new policies to boost

consumption, according to a statement on the government website late Tuesday.

These include policies to relax or remove purchase restrictions on automobiles,

to promote consumption in the night time economy and during holidays, to support

the replacement of old intelligence products with new ones, and to develop chain

convenience stores.

     More than 20 provinces including Guangdong, Sichuan and Zhejiang have used

up their annual quota of local government special bonds issuance and only

CNY287.73 billion of special bonds are left to be issued this year, Shanghai

Securities News reported. It is possible that those provinces which have used up

their quota this year could use the remaining balance of special bond issuance

from last year, the newspaper said.

     New 5G technology will be officially commercialised by September this year

and will boost China's digital economy by CNY15.2 trillion in the years from

2020 to 2025, according to the Science and Technology Daily. Citing Wang Zhiqin,

associate dean of the China Academy of Information and Communications

Technology, the Daily reports that the integration of 5G with artificial

intelligence and big data will promote a profound transformation in the digital

economy, spanning areas of management and production.

--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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