MNI China Daily Summary: Wednesday, January 9

     POLICY: The People's Bank of China (PBOC) will provide a Targeted

Medium-term Lending Facility for the first time in late January, Xinhua News

Agency reported, citing Yi Gang, the PBOC's governor. The tool is intended to

spur lending to small and private firms.

     LIQUIDITY: The PBOC skipped open market operations for a third day. This

resulted in a net drain of CNY40 billion as the same amount of reverse repos

matured, according to Wind Information. The PBOC said liquidity in the banking

system is at a relatively high level.

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

institutions (DR007) increased to 2.3866% from Tuesday's close of 2.2131%, Wind

Information showed. The overnight repo average increased to 1.5583% from

Tuesday's 1.3794%.

     YUAN: The yuan appreciated to 6.8330 against the U.S. dollar from Tuesday's

close of 6.8561. The PBOC set the dollar-yuan central parity rate weaker for the

first time in four days at 6.8526, compared with 6.8402 on Tuesday.

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

3.1250%, down from the closing of 3.1300% on Tuesday, according to Wind

Information.

     STOCKS: The benchmark Shanghai Composite Index closed 0.71% higher at

2,544.34. Hong Kong's Hang Seng Index increased 2.27% to 26,462.32.

     FROM THE PRESS: Trade talks between China and the U.S. in Beijing are going

into overtime, which indicates that officials from both sides are determined to

reach an agreement, Global Times said. The talks, originally set for two days,

will continue on Wednesday, the newspaper said.

     China's National Development and Reform Commission will promote foreign

investment projects, with the main focus on the new-energy industry, Xinhua News

Agency reported, citing Deputy Director Ning Jizhe. China will also devise

policies to boost spending on automobiles and home appliances and encourage

consumption in rural areas, including online shopping and tourism, Xinhua said,

citing Ning.

     China's housing market is declining too fast, with home sales, real estate

investment and housing prices all falling, said China Securities Journal, citing

Gu Yunchang, deputy director of the Housing Policy Expert Committee under the

Ministry of Housing and Urban-Rural Development.

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

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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