MNI China Daily Summary: Tuesday, March 23

EXCLUSIVE: A virtual meeting between Joe Biden and Xi Jinping looks likely to take place on the sidelines of the Global Leaders' Climate Summit Apr. 22 despite last week's rancorous China-U.S. meeting in Alaska, Beijing policy advisors told MNI. The public rebukes exchanged by U.S. Secretary of State Antony Blinken and China's foreign policy chief Yang Jiechi were partly driven by the need to demonstrate toughness to domestic audiences, the advisors said, adding that the talks paved the way for improvements in many areas and even raised hopes for a fresh trade agreement by the end of the year.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2% on Tuesday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 2.0985% from Monday's close of 2.1064%, Wind Information showed. The overnight repo average fell to 1.9608% from 2.0433% on Monday.

YUAN: The currency weakened to 6.5108 against the dollar from Monday's close of 6.5100. The PBOC set the dollar-yuan central parity rate lower at 6.5036, compared with the 6.5191 set on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 3.2500%, down from Monday's close of 3.2700%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.93% to 3,411.51, while the CSI300 index lost 0.95% to 5,009.25. The Hong Kong's Hang Seng Index tumbled 1.34% to 28,497.38.

FROM THE PRESS: China's five-year Loan Prime Rate, a benchmark for residential mortgages, may rise this year if the property market continues to heat up, the Shanghai Securities News said citing Wang Qing, chief macro analyst of Golden Credit Rating. The one-year LPR for corporate loans is likely to remain stable with an interest rate of 3.85%, Wang said. The PBOC is likely keeping a cap on lenders' LPR quotes after having recently tightened banks' deposit rates and reduced competition for deposits, the newspaper said. On Monday, the central bank for the 11th month kept its published benchmark 1Y and 5Y LPRs, which are decided based on quotes submitted by lenders.

China is likely to beat the "above 6%" government-set growth target this year, but it will seek to curb energy consumption and pollution, Premier Li Keqiang said in a speech to the China Development Forum participants on Monday night. China must balance growth, income and employment, and strive to create 11 million new jobs this year, Li said. China must also urge urbanization to expand domestic demand and let consumption be a bigger growth driver, Li said.

China and Russia won't form a western-style alliance or bloc as they did during the Cold War despite closer partnerships in the face of increasing sanctions from the U.S. and its western allies, the Global Times said in an editorial on Tuesday as Russian Foreign Minister Sergei Lavrov visits China. However, observing the non-interference principle, the two nations will be determined to co-operate in all spheres possible, and take care of each other's core interests wherever and whenever it is necessary to do so, the newspaper said.