MNI China Daily Summary: Wednesday, January 22

     POLICY: The death toll from the coronavirus rose to nine in China as of

Tuesday with a total of 440 cases confirmed countrywide, Li Bin, a deputy

director of the National Health Commission, told reporters. The virus may mutate

and the epidemic is at risk of spreading further given more frequent travels

during the Chinese New Year holiday period, Li said at a press conference in

Beijing Wednesday. The government has warned people not to travel to or from the

city of Wuhan, the centre of the outbreak, with the city's airport, train and

bus stations all implementing passenger screenings, he said.

     POLICY: China may need more proactive fiscal policies to avert a slowdown,

allowing a budget deficit of as much as 3% of gross domestic product, Liu Huan,

a counsellor to the State Council, said at a briefing on Tuesday, in which he

advised officials not to underestimate the potential economic impact from an

outbreak of coronavirus.

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY30 billion via

14-day reverse repos with the rate unchanged at 2.65%, according to a statement

on the PBOC website. The injection aims to keep the liquidity in the banking

system at a reasonable and ample level, PBOC said.

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

institutions (DR007) rose to 2.6154% from Tuesday's close 2.5727%, Wind

Information showed. The overnight repo average decreased to 1.4808% from 1.8569%

yesterday.

     YUAN: The yuan strengthened to 6.9012 against the dollar from Tuesday's

close 6.9065. PBOC set the dollar-yuan central parity rate higher at 6.8853,

compared with 6.8606 on Tuesday.

     BONDS: The yield on 10-year China Government Bonds was last at 3.0500%,

flat from Tuesday's close, according to Wind Information.

     STOCKS: The Shanghai Composite Index gained 0.28% to 3,060.75. Hong Kong's

Hang Seng Index rallied 1.27% to 28,341.04.

     FROM THE PRESS: China's infrastructure investment growth is expected to

rebound to around 6% in 2020 helped by the more and faster issuance of local

government special-purpose bonds, the China Securities Journal reported citing a

report by Shenwan Hongyuan Securities. The scale of special bond issuance may

expand to as much as CNY3.2 trillion this year with the aim of stabilizing

investment growth in the short term, the newspaper said.

     China will further relax market access for foreign investors, continue to

reduce the "negative list" of banned areas for foreign investment and allow

foreign ownership in more areas, Xinhua News Agency said citing Vice Premier Han

Zheng. China will increase imports of goods and services, lower tariff levels,

and cut administrative costs during the import process, Xinhua cited Han as

saying. 

--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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