MNI China Daily Summary: Friday, Jan 12

POLICY: China's foreign trade will remain competitive and resilient in 2024 as positive factors outweigh negatives, Wang Ling Jun, vice minister for the General Administration of Customs (GACC) said at a press conference.

POLICY: China's exports registered a 4.6% y/y decline in 2023, compared with the 10.5% growth made in 2022, the first yearly decrease in seven years, data released by Customs showed.

POLICY: China's Consumer Price Index fell by 0.3% y/y in December, narrowing from November's three-year low of -0.5%, while the Producer Price Index -- a measure of factory-gate inflation -- also witnessed a narrowed decline, data from the National Bureau of Statistics showed.

DATA: China’s new yuan loans and aggregate finance both grew less than expected in November, while money supply also slowed more than foreseen, the People's Bank of China data released showed Friday. Banks extended CNY1.17 trillion in new yuan loans in November, underperforming the CNY1.38 trillion expectation though slightly rising from November's CNY1.09 trillion.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY65 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The reverse repo operation has led to a net drain of CNY10 billion reverse repos after offsetting CNY75 billion maturity today, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8415% from 1.8353%, Wind Information showed. The overnight repo average increased to 1.6825% from the previous 1.6302%.

YUAN: The currency weakened to 7.1622 against the dollar from 7.1594 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 7.1050, compared with 7.1087 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.5800%, up from 2.5650% at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.16% to 2,881.98 while the CSI300 index fell 0.35% to 3,284.17. The Hang Seng Index was down 0.35% to 16,244.58.

FROM THE PRESS: The Ministry of Commerce will promote the construction of a fair, stable, inclusive and convenient automobile market, and support car companies to improve products and services for consumers worldwide, said MOFCOM spokeswoman Shu Jueting at a presser. China’s automobile exports contributed 55.7% to the total auto sales growth. The country’s automobile exports reached 4.91 million units, a rise of 57.9% y/y, among which fuel vehicles accounted for 75.5%, while electric-vehicle exports grew rapidly by 77.6% y/y, about 25 percentage points quicker than traditional vehicles, data by China Association of Automobile Manufacturers showed. (Source: 21st Century Business Herald)

The China Securities Regulatory Commission will promote the diversification of bond investment funding sources, guide exchanges to build repurchase and market-making mechanisms, and lower costs of tech-innovation and green bonds, Yicai.com reported, citing an unnamed official from CSRC Bond Department. The issuance of tech-innovation and green bonds reached CNY306.7 and CNY152.6 billion on the Shanghai Stock Exchange last year, a rise of 204% and 6% y/y. So far, a total of CNY21.5 billion of double-labeled bonds ticking green and technology were issued, of which central government-owned enterprises accounted for 96%.

China will vigorously develop green finance, support qualified companies to issue green bonds, and guide financial institutions and social capital to increase investment, according to the State Council's published guideline “Promoting the Construction of a Beautiful China”. China will also innovate financial support for regional environmental protection projects and promote innovation in climate investment and financing, the document said. (Source: Xinhua News Agency)