MNI China Daily Summary: Friday, April 12

POLICY: China's exports fell 7.5% y/y in March, underperforming market consensus for a 1.8% y/y fall and behind last month's 5.6% y/y growth, data released by Customs on Friday showed. The drop was mainly driven by weak external demand, with a low base effect also impacting.

POLICY: China will take measures to attract more medium- and long-term funds into stocks, the South Council said on Friday as it announced tighter rules for companies to maintain listings and a crackdown on improper trading practices in a drive to establish a high-quality equity market within five years.

LIQUIDITY: The PBOC conducted CNY2 billion via 7-day reverse repos on Friday, with the rates unchanged at 1.80%. The operation led to a net injection of CNY2 billion as no reverse repo matured, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8336% from 1.8239%, Wind Information showed. The overnight repo average decreased to 1.7127% from 1.7223%.

YUAN: The currency weakened to 7.2375 against the dollar from 7.2369 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 7.0967, compared with 7.0968 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.3450%, down from 2.3625% at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.49% to 3,019.47 while the CSI300 index fell 0.81% to 3,475.84. The Hang Seng Index was down 2.18% to 16,721.69.

FROM THE PRESS: China’s March CPI of 0.1% y/y, down 0.6% from February, shows consumption remains in the post-epidemic recovery stage, according to Luo Zhiheng, chief economist of Guangdong Securities. Luo noted tourism increased by 10.1% y/y but communication tools and transportation decreased by -2.1% and -5.2%, showing current consumption of mobile phones, cars and other commodities remains weak. Wu Ge, chief economist of Changjiang Securities said authorities need to implement policies to expand domestic demand and promote economic growth back to potential. (Source: 21st Century Herald)

Authorities in Hainan will break the province's economic reliance on real estate and construct a modern industrial system with high productivity, Liu Xiaoming, deputy secretary of the Hainan Provincial Party Committee, told reporters at a recent press conference. The provincial government will focus on new economic drivers in tourism, modern services, and high-tech industries, and high-efficiency tropical agriculture, Liu added. The island will receive support to become a hub for high-end shopping, medical care, and education. (Source: 21st Century Business Herald)

China’s annual demand for equipment investment and renewal in key areas totals more than CNY5 trillion, of which replacement of automobiles and home appliances can be more than CNY1 trilion, Zhao Chenxin, deputy director of the National Development and Reform Commission, said at a recent press conference. The government's action plan to increase equipment trade-ins and upgrades can promote consumption, stimulate investment, decrease carbon emissions and reduce safety hazards, Zhao added.