MNI China Daily Summary: Wednesday, January 8

     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations

for the 11th day, leaving liquidity unchanged, according to Wind Information.

Total liquidity in the banking system is relatively high, PBOC said.

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

institutions (DR007) rose to 2.1147% from Tuesday's close 2.0408%, Wind

Information showed. The overnight repo average increased to 1.5414% from 1.2119%

yesterday.

     YUAN: The yuan weakened to 6.9420 against the dollar from Tuesday's close

6.9376. PBOC set the dollar-yuan central parity rate lower at 6.9450, compared

with Tuesday's 6.9690.

     BONDS: The yield on 10-year China Government Bonds was last at 3.1600%,

down from Tuesday's close of 3.1625%, according to Wind Information.

     STOCKS: The Shanghai Composite Index tumbled 1.22% to 3,066.89, led by

agricultural, coal, steel and 5G shares. Hong Kong's Hang Seng Index lost 0.83%

to 28,087.92.

     FROM THE PRESS: China and the U.S. should avoid conflicts, coexist and

co-operate for mutual benefit, the Global Times said in an editorial late

Tuesday. China must admit that the overall strength of the U.S. economy,

technology, and military is above China and none of China's countermeasures

should be based on the assumption that its strength will soon surpass that of

the U.S., the newspaper said.

     Seasonal sales of foreign exchange, positive market sentiment, continued

inflow of foreign capital, a weaker dollar, and the recovering Chinese economy

helped push the yuan to a five-month high of 6.93 against the dollar yesterday,

the Shanghai Securities News reported citing analysts.

     China's tax and fee cuts last year exceeded CNY2 trillion, or over 2% of

GDP, boosting GDP growth by 0.8 percentage point, the People's Daily reported

citing the State Taxation Administration.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

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