MNI China Daily Summary: Wednesday, March 4

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

for the 12th day, leaving liquidity unchanged, according to Wind Information.

Liquidity in the banking system is reasonable and ample, PBOC said on its

website.

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

institutions (DR007) decreased to 1.8844% from Tuesday's close 1.9624%, Wind

Information showed. Overnight repo average fell to 1.4578% from 1.6036%

yesterday.

     YUAN: The yuan strengthened to 6.9331 against the dollar from Tuesday's

close 6.9808. PBOC set the dollar-yuan central parity rate lower at 6.9514 on

Wednesday compared with 6.9516 on Tuesday.

     BONDS: The yield on 10-year China Government Bonds was last at 2.7125%,

down from Tuesday's close of 2.7850%, according to Wind Information.

     STOCKS: The Shanghai Composite Index gained 0.63% to 3,011.67. Hong Kong's

Hang Seng Index lost 0.24% to 26,222.07.

     FROM THE PRESS: China should lower policy interest rates following rate

cuts by other major central banks including the Federal Reserve, the China

Securities Journal said in a commentary. The PBOC could possibly lower policy

rates this month as current money market rates are already lower than the policy

rates, the commentary said.

     The PBOC is likely to increase the quotas for refinancing and rediscounting

amid the coronavirus, the Economic Information Daily reported citing Wang Qing,

chief macroeconomic analyst at credit rating agency Dongfang Jincheng. Overall

monetary easing is still needed in addition to targeted tools supporting small

businesses as the government aims to stabilize employment and achieve its growth

target, the newspaper said citing Ming Ming, chief fixed-income analyst at CITIC

Securities.

     China's infrastructure investment will be on technology such as 5G and

cloud-computing rather than traditional infrastructure around railways, roads

and airports, the Shanghai Securities News said in a front page commentary. This

technology infrastructure can stabilize the economy and unlock consumption, the

newspaper added.

--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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