The risk appetite buying underpinned after Chinese President Xi Jinping's government has taken steps this week to soothe the U.S., including a plan to cut tariffs on U.S. cars to 15 percent from 40 percent. China also intends to resume purchases of American soybeans soon. China said last week it would deepen reforms in the area of science and technology and put more effort into protecting intellectual-property rights.
The Chinese regime is reportedly planning to scrap an industrial policy criticized by the Trump administration as protectionist, in favor of a program more hospitable to foreign companies. The industrial planMade in China 2025″proposes to transform China into a high-tech manufacturing powerhouse by 2025, in fields including artificial intelligence, cloud computing, and big data. As per reports, China's top planning agency is preparing a new plan to replace Made in China 2025, which would play down China's bid to dominate manufacturing and allow more access for foreign firms. The new policy is set to be introduced early next year.
The move comes as the President Donald Trump and Chinese leader Xi Jinping agreed to a temporary trade truce in Argentina on 1 December 2018. The two sides are expected to negotiate over U.S. demands for stronger Chinese protections for U.S. intellectual property, an end to forced technology transfers and greater market access to China for U.S. companies.
NEWS FROM THE PRESS: Yuan loans surge in November -- Banks extended more new loans than expected in November after a sharp drop the previous month, in a sign that recent government pressure on lenders to help smaller firms may be starting to bear fruit. Chinese banks extended 1.25 trillion yuan (US$182 billion) in net new yuan loans in November, up from the previous month, according to data published by the People's Bank of China on Tuesday. October's weak readings had largely been attributed to seasonal factors, with November loans seen snapping back for the same reasons. Total social financing (TSF), a broad measure of liquidity and credit in the economy, jumped to 1.52 trillion yuan in November from 728.8 billion yuan in October. But growth of outstanding TSF slowed to a new all-time low of 9.9 percent from 10.2 percent in October, as regulators continued to crack down on riskier types of financing despite indications that it is weighing on broader business activity. TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales. New bank loans in the first 11 months of 2018 totalled 15.09 trillion yuan, up 16.6 percent from a year earlier and eclipsing last year's full-year record of 13.53 trillion yuan.
CURRENCY NEWS: China yuan strengthened against greenback on Thursday, after central bank stronger mid-point rate. Prior to market opening, the People Bank of China set the yuan reference rate at 6.8769, strengthened 295 basis points from previous day. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2% from the central parity rate each trading day.
OFFSHORE MARKET NEWS: US share market closed higher on Wednesday, after a series of developments boosted expectations that a U.S.-China trade deal could be reached in the coming months. The Dow Jones Industrial Average rose 157.03 points, or 0.6%, to end at 24,527.27, while the S&P 500 index advanced 14.29 points, or 0.5%, to 2,651.07. The Nasdaq Composite Index climbed 66.48 points, or 1%, to 7,098.31.
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