MNI China Daily Summary: Thursday, March 31

EXCLUSIVE: Signs China wants a deal with U.S. authorities to allow firms including Weibo to keep listings on U.S. stock markets do not mean Beijing will allow full access to information contained in the companies’ audit papers which it regards as sensitive to its national security, policy advisors and a market analyst told MNI.

POLICY: China will act to safeguard the legitimate rights and interests of Chinese enterprises, and the U.S. should stop abusing state power to suppress them, said Shu Jueting, spokeswoman for the Ministry of Commerce at a briefing.

DATA: The China Purchasing Managers' Index (PMI) fell to 49.5 in March from February's 50.2, sliding into contraction for the first time in five months, amid wider resurgences of local Covid-19 cases and increased geopolitical instability, data from the National Bureau of Statistics showed. Both the production and new order sub-indices fell below 50, the divide between contraction and expansion, as manufacturers in infected areas cut or suspended production. Some export orders were also reduced or canceled due to the escalating Russia-Ukraine conflict.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY150 billion via 7-day reverse repos with the rates unchanged at 2.10%. The operation has led to a net injection of CNY130 billion after offsetting the maturity of CNY20 billion repos today, according to Wind Information. The operation aims to keep liquidity stable at the end of the quarter, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.2449% from the close of 2.2284% on Wednesday, Wind Information showed. The overnight repo average rose to 1.9489% from the previous 1.5033%.

YUAN: The currency strengthened to 6.3433 against the dollar from 6.3526 on Wednesday. The PBOC set the dollar-yuan central parity rate lower for the fourth day at 6.3482, compared with 6.3566 set on Wednesday.

BONDS: The yield on the 10-year China Government Bond was last at 2.8100%, up from 2.7975% of Wednesday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.44% to 3,252.20, while the CSI300 fell 0.74% to 4,222.60. The Hong Kong's Hang Seng Index lost 1.06% to 21,996.85.

FROM THE PRESS: The PBOC is likely to increase support for the real economy through stable growth of overall credit expansion and encouraging structural policy support to sectors including small businesses, green development, farming and innovation, the China Securities Journal said interpreting a statement following the central bank's Q1 Monetary Policy Committee meeting. The central bank is also likely to keep ample liquidity with cuts to interest rates or reserve requirement ratios remaining possible, the newspaper said. The PBOC also reiterated policy support for meeting reasonable housing purchases and healthy real estate development, which could help the property market recover, said the newspaper.

The PBOC may still cut reserve requirement ratios (RRR) in April and step up monetary policy support given a likely weakened economic performance in March, the Securities Daily said citing analysts. The yuan has remained relatively strong and cross-border capital flow has been overall stable, supporting a possible RRR cut, it said. The central bank has this week consistently added net liquidity injections to stabilize funding costs and support the real economy, the newspaper said.

China urges faster issuances of special local government bonds to help boost investment and drive consumption as the economy faces increasing headwinds, Xinhua News Agency said late Wednesday following a State Council meeting. China has planned a total of CNY3.65 trillion local government special bonds for this year and seeks to have all the allocated amount issued by the end of September, Xinhua said. China will also begin some qualified water conservancy projects, which will lead to CNY800 billion investment this year, Xinhua said citing the government.