MNI China Daily Summary: Friday, April 14

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY15 billion via 7-day reverse repos, with the rates unchanged at 2.00%. The operation has led to a net drain of CNY2 billion after offsetting the maturity of CNY17 billion reverse repos today, according to Wind Information. The operation aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.0151% from 1.9935%, Wind Information showed. The overnight repo average increased to 1.6136% from the previous 1.3088%.

YUAN: The currency strengthened to 6.8495 against the dollar from 6.8721 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.8606, compared with 6.8658 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.8475%, up from Thursday's close of 2.8400%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.60% to 3,338.15, while the CSI300 index rose 0.57% to 4,092.00. The Hang Seng Index was up 0.46% to 20,438.81.

FROM THE PRESS:

China should raise the level of social security to promote the economy, according to a Yicai editorial. The government should invest more fiscal resources in healthcare and education, unburdening households and giving them more freedom to participate in the economy. Regulators must prioritise the construction of a unified national market and create a business environment to empower entrepreneurs. Authorities in Beijing had hoped recent strong growth in broad money supply would support the real economy, however Yicai noted tepid inflation data in March indicated this had not happened.

Beijing wants to cultivate "unicorn firms" that support the high-quality upgrading of the economy, according to Li Qiang, China’s Premier. Speaking on a recent tour, Li said unicorns have a role to play in China’s high-level technological self-reliance and self-strengthening strategy. The government at all levels should promote a better ecosystem for innovative firms to develop and highlight the importance of energy storage, semiconductors and satellite network industries, Li added. (Source: Yicai).

The Hainan Free Trade Zone (FTZ) wants foreign banks to participate in its development and will pursue favourable financial policies to attract the institutions, according to Xing Wei, vice chairman of the China Banking Association. Foreign banks can find synergy between their operations across the Hainan, Greater Bay and RCEP region, Xing said. Overseas firms have growth opportunities in cross-border finance, trade finance and risk management, which can be combined with Hainan's tourism, green and tech industries. (Source: China Securities Daily).