MNI China Daily Summary: Friday, April 21

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY88 billion via 7-day reverse repos, with the rates unchanged at 2.00%. The operation has led to a net injection of CNY73 billion after offsetting the maturity of CNY15 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 2.2670% from 2.1327%, Wind Information showed. The overnight repo average increased to 2.2739% from 2.2212%.

YUAN: The currency weakened to 6.8898 against the dollar from 6.8796 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.8752, compared with 6.8987 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.8550%, up from Thursday's close of 2.8525%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 1.95% to 3,301.26, while the CSI300 fell 1.96% to 4,032.57. The Hang Seng Index was down 1.57% to 20,075.73.

FROM THE PRESS: China can not sustain March's strong export performance beyond the initial rapid resumption of production after the Spring Festival, according to Huo Jianguo, former president of the International Trade Research Institute of the Ministry of Commerce. Speaking at a recent conference, Huo said March's data showed China’s exports were still in demand, but external pressure on foreign trade remains unchanged. China should not only focus on new growth areas such as new energy vehicles, solar panels and lithium batteries, but also work to maintain competitive advantages in traditional exports such as mobile phones and computers, he said. (Source: China Economic Review).

China’s real-estate market will continue its steady Q1 recovery into Q2, according to Chai Qiang, chairman of the Chinese Society of Real Estate Appraisers. Chai said he expects strong growth in the leasing market, with one-third of the population, mainly young people, expected to require leasing accommodation once the urbanisation rate reaches 75%. Although real-estate investment in Q1 had fallen 5.8% y/y, the rate of decline slowed significantly and strong policy support was now leading to a sustainable recovery. (Source: China Economic Journal)

China must boost household incomes to ensure the consumption rebound is sustainable, according to Guo Liyan, director of the Comprehensive Situation Research Office of the China Macroeconomic Research Institute. Speaking at a recent forum, Guo said the service industry and consumption had shown positive signs of recovery in Q1, but households need to see rising and stable incomes to facilitate a sustained rebound in spending. The government must support SMEs and construct a unified national market this year, she said. (Source: China Economic Journal)