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(Adds detail, comments and background) SHANGHAI, Aug 29 (Reuters) - China's yuan extended losses for the 11th day on Thursday, knocked down by corporate demand for dollars as Washington and Beijing prepare to impose new tariffs on each other's goods. The Chinese currency stumbled lower in spite of firmer-than-expected central bank guidance via its daily fixing and state bank support. The Trump administration on Wednesday made official its extra 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15. China said last week it would impose additional tariffs in retaliation for the impending U.S. actions. Prior to market opening, the People's Bank of China (PBOC) lowered its official midpoint marginally to a fresh 11-1/2-year low of 7.0858 per dollar, but at a much firmer level than traders had expected. It is the third straight day that the PBOC has fixed its guidance rate firmer than market expectations, a sign investors have read as an official attempt to steady the declines. The onshore spot yuan opened at 7.1633 per dollar and was changing hands at 7.1668 by midday, 23 pips weaker than the previous late session close and 1.14 percent softer than the midpoint. If the yuan closes at these levels, it will be the longest losing streak for the currency since China unified official and market exchange rates in 1994, while August will also likely be its worst month in 25 years. The central bank will keep on managing the pace of the decline rather than defending any particular level, Eugenia Fabon Victorino, head of Asia strategy at SEB Markets in Singapore, said in a note. "Considering the large move in the currency market of late, we note an increased reliance on the counter-cyclical factor in the daily fixing mechanism," she said, expecting that the authorities will not tolerate a "free fall" in the yuan even as it guides the fixing lower. Thursday's official guidance rate, 23 pips weaker than the previous fix of 7.0835, was the weakest since March 18, 2008. And it was 379 pips or 0.53% stronger than Reuters' estimate of 7.1237 per dollar. In addition, major state-owned banks were seen supporting the yuan by receiving dollar liquidity in the forwards market before selling the greenback in the onshore spot market around the 7.17 per dollar level, three traders said. "Recent dollar purchase were strong. (The state banks) were offering at around (7.17 per dollar), but did not seem to control the price at any specific level," said one of the traders. A second trader who also spotted state bank action said dollar sales in the spot market were to meet higher corporate demand, indicating market views were generally sceptical that Beijing and Washington would be able to reach a trade deal in the near term. Such state bank action in the forwards market dragged one-year dollar/yuan swap points down to the weakest level in three weeks. Market participants believe state-run banks usually act on behalf of the central bank in China's foreign exchange market, although the big banks can also trade on their own behalf. The offshore yuan was trading at 7.1731 per dollar as of midday. The yuan market at 0408 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 7.0858 7.0835 -0.03% Spot yuan 7.1668 7.1645 -0.03% Divergence from 1.14% midpoint* Spot change YTD -4.10% Spot change since 2005 15.48% revaluation Key indexes: Item Current Previous Change Thomson 90.84 90.75 0.1 Reuters/HKEX CNH index Dollar index 98.189 98.21 0.0 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2 percent from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 7.1731 -0.09% * Offshore 7.227 -1.95% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Winni Zhou and John Ruwitch; Editing by Sam Holmes)