MNI China Press Digest, Jan 21:Liquidity, Yuan, GDP, Pneumonia

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

on Monday:

     China's Loan Prime Rate, the market-oriented loan price guidance, stayed

unchanged in January because liquidity is still very tight, according to a

report in Shanghai Securities News. Citing Wang Yifeng, an analyst with

Everbright Securities, the report said that liquidity was tight despite the

People's Bank of China injecting CNY 30 billion through Medium-term Lending

Facility (MLF) and lowering the required reserve ratio by 50 bps. Ming Ming,

Deputy Director of Research Department of Citic Securities, told the newspaper

he expected the PBOC to cut rates for MLF and open market operations after the

upcoming Chinese New Year holiday, which ends on Friday January 31.

     The yuan may have limited room for further appreciation against the USD in

the short term and could search for a periodical bottom if there was no more

good news, the China Business News reports. Citing economists and FX traders,

the report attributed the yuan's recent strength to a strong central parity rate

set by the central bank combined with FX selling at year end. Other factors in

the yuan's strength were the weakening USD as a result of eased trade tensions,

the continued inflow of foreign capital to China's stock and bond markets and

better expectations for the Chinese economy in 2020.

     China has the potential to achieve a growth rate of 6% in 2020, according

to a report in the Economic Information Daily. Citing Wang Jun, a member of the

academic committee of China at the China Center for International Economic

Exchanges, the Daily's report said that a combination of China's huge market,

continuous policies to boost investment, the accelerated development of

high-tech and emerging industries and increased counter-cyclical adjustment will

support the economy.

     Chinese President Xi Jinping has ordered the government to take effective

measures to curb the spread of the new strain of pneumonia first found in Wuhan,

according to Xinhua News Agency. 224 people are confirmed to be affected by the

new pneumonia across China, with four overseas as at January 20, according to a

report by Caixin.

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: flora.guo@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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