MNI China Press Digest Apr. 20: Liquidity, Trade, Deposit Rate

     BEIJING (MNI) - The following lists highlights from the Chinese press for

Friday:

     Money supply is tight as the end of the month approaches and as the PBOC's

RRR cut has not taken effect yet, 21st Century Business Herald reported. The

CNY400 liquidity injection from the PBOC through the RRR cut will barely caused

any change in liquidity as it will balance out month-end tax payments, analysts

said, adding it shows that the central bank maintains a prudent monetary policy.

Because liquidity is tight, overnight reverse repo was 2%-3% on April 19, but

some financial institutions raised the rate to as high as 10%; seven-day was

3%-4%, with some increasing the rate to 7%, the newspaper reported. 

     The U.S.' efforts to impede China's technology development will not only

trigger retaliations from China but also motivate the country to further its

reform and improve innovation, Economic Information Daily said in a commentary.

The U.S. restricts sales of technology products by Chinese companies such as

Huawei and ZTE, and is considering prohibiting Chinese companies from providing

cloud computing. Such policies should remind Chinese companies they have to

advance their innovation and further cooperation with other countries.

     Few Chinese banks have raised their deposit interest rates over the past

week but signals from the PBOC Governor Yi Gang indicate the central bank may

reduce restrictions for banks to do so soon, China Securities Journal reported.

The PBOC's removal of restrictions on deposit rates may be a gradual process,

and is not likely to remove the restrictions at the same time for all banks,

said experts, including Li Yamin, chief securities and banking analyst at Bank

of China International, as well as anonymous managers at Chinese banks. Banks

will not raise their deposit rates too much in order to avoid a rat race, an

anonymous bank manager said.

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

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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