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     TOP NEWS: China's economy is expected to bottom out and stabilize after the
second quarter, then grow faster at the end, said Sheng Songcheng, former member
of the central bank's Monetary Policy Committee in an article published on
Wallstreet CN. The economy has already entered the bottom territory, while the
trade friction with the U.S. is likely to ease temporarily, the investment may
accelerate with structural upgrade, and some policies to stabilize the growth
and promote restructuring have been adopted, Sheng said.
     TRADE WAR: China and U.S. teams of negotiators maintain communications on
economic and trade consultation, said Hua Chunying, the spokesman of the
Ministry of Foreign Affairs at a presser in Beijing today, when pressed whether
the U.S. has declined China's offer to hold a preparatory talk this week due to
the lack of progress on technology transfer and structural reform.
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
(OMOs) for a third day, resulting in a net drain of CNY350 billion which is the
total of reverse repos maturing, according to Wind. The central bank also
conducted a CNY257.5 billion one-year Targeted Medium-term Lending
Facility(TMLF) today, Wind said.
     RATE: The 7-day weighted average interbank repo average rate for depository
institutions (DR007) increased to 2.5363% from Tuesday's close of 2.5057%, Wind
Information showed. The overnight repo average increased to 2.2455% from
Tuesday's 2.2371%.
     YUAN: The yuan appreciated to 6.7888 against the U.S. dollar from Tuesday's
close of 6.8103. The PBOC set the yuan's central parity rate against the dollar
at 6.7969 on Wednesday, against 6.7854 yesterday.
     BONDS: The yield on the benchmark 10-year China Government Bond was last at
3.1400%, up from the closing of 3.1300% on Tuesday, according to Wind
Information.
     STOCKS: The benchmark Shanghai Composite Index closed up 0.05% at 2,581.00.
Hong Kong's Hang Seng Index increased 0.01% to 27,008.02.
     FROM THE PRESS: China's economy is bound to slow down this year, mainly due
to the trade war and a cooling real estate market, The Paper reported late
Tuesday, citing Fang Xinghai, deputy director of China Securities Regulatory
Commission. However, he underlined that but it was a slowdown, not a collapse.
If the situation worsens, China still has room for fiscal expansion, such as
increasing the issuance of local government special bonds and CGBs, Fang said.
     There are expectations of accelerated reform of the housing and rental
market, land supply and property tax following President Xi Jinping's latest
meeting with provincial and central party cadres, calling for setting up a
long-term mechanism to stabilize the smooth development of the real estate
sector, said Securities Daily today.
     Canada may face a "severe backlash" from China if the extradition of
Huawei's CFO Meng Wanzhu proceeds, the government-run Global Times said in an
editorial. Effort by Canadian envoy to Washington pressing for quicker action
and shirking Canada's responsibilities may only backfire and further alienate
China, the newspaper said.
--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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