MNI China Daily Summary: Tuesday, February 20

EXCLUSIVE: China’s bigger-than-expected cut to the Loan Prime Rate’s five-year plus tenor has sent a strong signal of support to the property market and will make further central bank easing more likely should the economy continue to soften and the U.S. Federal Reserve turns dovish.

POLICY: The hefty cut to Loan Prime Rate's five-year plus tenor will benefit investment and consumption while reducing interest payment of house buyers, Financial News, a newspaper affiliated with the central bank.

LIQUIDITY: The PBOC conducted CNY41 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The reverse repo operation has led to a net drain of CNY298 billion reverse repos after offsetting CNY339 billion maturity today, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8060% from 1.7855%, Wind Information showed. The overnight repo average increased to 1.6268% from the previous 1.6023%.

YUAN: The currency strengthened to 7.1976 against the dollar unchanged from Monday. The PBOC set the dollar-yuan central parity rate higher at 7.1068, compared with 7.1032 set on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 2.4110% up from 2.4357% at Monday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.42% to 2,922.73 while the CSI300 index rose 0.21% to 3,410.85. The Hang Seng Index was up 0.57% to 16,247.51.

FROM THE PRESS: The China Securities Regulatory Commission said it will strictly control IPO access, strengthen firm supervision and quality, and increase investment returns at a recent symposium. CSRC head Wu Qing held in-depth discussions with industry representatives regarding the promotion of high-quality development in the capital market, with a focus on promoting long-term funds and boosting investment value. Participants put forward suggestions to improve market listings, such as shareholding reduction, dividend distribution, and paying more attention to small and medium-sized investors. (Source: Yicai)

China needs to reform its land management system to more efficiently connect with macro policy and regional development, according to President Xi. Chairing a meeting of the Central Committee for Comprehensive Deepening Reforms, Xi called for improvements to land allocation accuracy, utilisation efficiency, and orderly land development. China must remove restrictions to the deep integration of science and technology with the economy, and promote comprehensive green transformation to solve resource and environmental problems, Xi added. (Source: Yicai)

China should support automobile firms to produce and operate in foreign markets as a response to increasing tariffs against Chinese car exports, according to Zhao Fujun, director at the Foreign Economic Research Department of the State Council. Zhao said China should deepen cooperation with Belt and Road nations to create strong opportunities for future automobile exports. (Source: Yicai)