MNI China Daily Summary: Wednesday, October 25

     TOPS NEWS: China on Wednesday unveiled the new lineup of the top leadership

of the Communist Party, the Politburo Standing Committee, as chosen by the

party's Central Committee. President Xi Jinping and Premier Li Keqiang retained

the No. 1 and No. 2 positions, respectively, and were joined by five new

members: Li Zhanshu, 67; Wang Huning, 62; Wang Yang, 62 Zhao Leji, 60; and Han

Zheng, 63.

     TOPS NEWS: From an economic perspective, from now until the National

People's Congress in March next year, the leadership of the Communist Party of

China is expected to consolidate and stabilize. In the medium term, there is

expected to be no major shift in policy direction. President Xi Jinping's report

to the 19th National Party Congress, as well as comments by his ministers and

state media during the week-long congress, repeated the country's priorities:

supply-side reform; bigger and stronger state-owned enterprises, including

investment by the private sector; continued global expansion under the "One

Belt, One Road" banner; and improving social security.

     RATES: The People's Bank of China injected CNY100 billion in seven-day

reverse repos and CNY60 billion in 14-day reverse repos via open-market

operations Wednesday, resulting in no net addition or drain of liquidity for the

day, as a total of CNY160 billion in reverse repos matured on Wednesday.

     RATES: Money market rates were higher on Wednesday. The seven-day repo

average was last at 2.9281%, up from Tuesday's average of 2.7845%. The overnight

repo average was at 2.6686% compared with Tuesday's 2.6328%.

     YUAN: The yuan was weaker against the U.S. dollar on Wednesday after the

People's Bank of China set a weaker daily fixing. The yuan was last at 6.6403

against the U.S. unit, weakening 0.11% compared with the official closing price

of 6.6332 on Tuesday. The People's Bank of China set the yuan central parity

rate against the U.S. dollar at 6.6322 Wednesday, weaker than Tuesday's 6.6268.

     BONDS: The yield on benchmark 10-year China government bonds was last at

3.7800%, up from the previous close of 3.7200%, according to Wind, a financial

data provider.

     STOCKS: Stocks rose, led higher by shares in household appliance

manufacturers and furniture makers. The benchmark Shanghai Composite Index

closed 0.26% higher at 3,396.90. Hong Kong's Hang Seng Index was 0.40% higher at

28,262.80. 

     FROM THE PRESS: China's goal to establish a strong, modern socialist

country by 2050 does not mean "I win, you lose" for other countries, the Global

Times, a Chinese government mouthpiece, said in a commentary Wednesday. The goal

is not to make China a "new hegemon" or a "new empire," but to create a strong

country that shows kindness and shares the fruits of development. The "win-win"

proposal is also not an attempt to deceive the U.S. or other Western countries.

China and the U.S. need to reach a "win-win" situation in this century, but

changing the geopolitical mindset will be a challenge for political and

diplomatic leaders in both Beijing and Washington, the newspaper argued. (Global

Times)

     Consumption-based asset-backed securities have ballooned this year, with

the subset of securities related to consumer spending ranking first in the

market, the Securities Times reported Wednesday. In the first three quarters of

this year, CNY160.804 billion in consumer spending-related asset-backed

securities were issued, 4.4 times the value issued in the same period last year.

Issuers were mainly internet retail giants such as Alibaba and JD.com, because

small-scale companies face many difficulties in issuing such securities. Also,

the secondary market for asset-backed securities still lacks liquidity, although

the total amount of issuance has jumped, the newspaper said. (Securities Times)

     China has started pilot programs for real estate investment trusts (REITs)

in seven or eight cities and provinces, the Securities Times reported Wednesday,

citing an unidentified source. The China Securities Regulatory Commission is

speeding up its research on implementing the trusts and finalizing rules and

regulations, the newspaper said. (Securities Times)

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

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

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