MNI China Daily Summary: Friday, January 13

POLICY: China faces further downward pressure on exports in 2023 due to the volatile external environment, a spokesperson from the General Administration Of Customs said Friday.

POLICY: The People Bank of China (PBOC) will monitor inflation for signs of strengthening and enhance the flexibility of the yuan exchange rate, officials of the Bank told reporters on Friday in a briefing.

POLICY: China's exports grew 7.0% y/y in 2022 and imports gaining 1.1% y/y, both recorded on the back of a tough international and domestic outlook, China Customs said at its data press conference on Friday.

LIQUIDITY: The PBOC conducted CNY55 billion via 7-day reverse repos and CNY 77 billion via 14-day reverse repos with the rates unchanged at 2.00% and 2.15%, respectively. The operation has led to a net injection of CNY130 billion after offsetting the maturity of CNY2 billion reverse repos today, according to Wind Information. The operation aims to keep banking system liquidity stable before Chinese New Year, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.8447% from 1.9865% on Thursday, Wind Information showed. The overnight repo average decreased to 1.2528% from the previous 1.4526%.

YUAN: The currency strengthened to 6.7099 against the dollar from 6.7565 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.7292, compared with 6.7680 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.9250%, up from Thursday's close of 2.9000, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 1.01% to 3,195.31 while the CSI300 index was up 1.41% to 4,074.38. The Hang Seng Index was up 1.04% to 21,738.66.

FROM THE PRESS: China’s economy has momentum towards recovery, but support must be given to boost employment and consumption, Premier Li Keqiang said at a recent symposium. The Premier stressed support to the platform economy and said tax reductions for SME firms should go ahead as planned. Financial instruments should be used to back major projects, update equipment and boost consumption. Raw material supply chains should be secured, and focus should be made to resume production rapidly after the Chinese New Year holiday. (Source: Yicai.com)

China’s urban surveyed unemployment rate would drop below 5.5% should its GDP manage to reach 5% in 2023, the 21st Century Business Herald reported citing experts. The country still faces a challenge to stabilize employment this year, since new labour market entrants are expected to total 150 million, including 100 million graduates. Policy makers have to make effort to bolster consumption, safeguard companies, particularly state-one ones, and increase flexibility of the labour market, the experts suggested.

China’s regulators have further eased refinancing controls and have allowed more developers to issue new debt in a bid to ensure house delivery, China Business Network reported on Friday. Some developers which were struggling to repay domestic and overseas debt have been approved for bond issuance recently, indicating regulators are expanding the scale of the bailout, analysts pointed out. As a result, the property sector is expected to accelerate debt raising in the first half of the year as all financing channels, including bank credit, bond issuance, as well as equity will be available, analysts noted.