MNI China Press Digest, May 8: Chinese Bonds, PBOC, Sino-U.S.

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

Wednesday:

     Foreign capital has largely flowed into China via the Bond Connect scheme,

with CGBs becoming more popular for international investors seeking hedging

risks, Shanghai Securities Journal reported today. Foreign investors brought

CNY35.6 billion of China bonds via Bond Connect in April, a rise of 60% m/m, the

newspaper said citing data by China Central Depository & Clearing. As of April,

foreign investors held CNY1.11 trillion of CGBs, 70% of their total holdings of

Chinese bonds, followed by policy bank bonds, the paper said citing CCDC data.

     The PBOC aims to boost market confidence via small liquidity adds via

reverse repos this week, although with no plans to loosen liquidity via larger

liquidity injections, said China Securities Journal today. Generally, the PBOC

does not inject liquidity at the beginning of a month, as month-end fiscal funds

already add, the newspaper added.

     Consultation is the way to solve trade frictions, and it is imperative that

the U.S. should work with China to reach a win-win agreement based on mutual

respect, Xinhua News Agency said in a commentary late Tuesday. Sino-U.S.

economic relations are a win-win relationship, not a zero-sum game, Xinhua

added.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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