MNI China Daily Summary: Friday, June 7

DATA: China's exports rose 7.6% y/y in May, beating the market consensus of a 5.3% y/y rise and far ahead of the 1.5% y/y growth seen in April, data released by Customs showed, with the increase driven mainly by recovering external demand. Imports increased 1.8% y/y during the month, lower than the market consensus for a 4.6% y/y pick up, slowing from last month's 8.4% y/y rise.

DATA: China’s service trade grew rapidly in the first four months of 2024, with travel services contributing the most, according to data released on the Ministry of Commerce website. Export of services rose 11% y/y in the first four months, while imports of services jumped 21.2%, both accelerating from the 9.4% and 18.7% growth in Q1.

DATA: China's foreign exchange reserves rose to USD3.232 trillion in May, up by USD31.2 billion from April, as the U.S. dollar index fell in the month, data released by the State Administration of Foreign Exchange showed.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY2 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The operation has led to a net drain of CNY98 billion after offsetting the CNY100 billion maturity today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7718% from 1.7859% on Thursday, Wind Information showed. The overnight repo average increased to 1.7266% from the previous 1.6587%.

YUAN: The currency strengthened to 7.2426 against the dollar from 7.2473 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 7.1106, compared with 7.1108 set on Thursday. The fixing was estimated at 7.2425 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 2.2845%, down from Thursday's close of 2.2850%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged up 0.08% to 3,051.28, while the CSI300 index was down 0.50% to 3,574.11. The Hang Seng Index lost 0.59% to 18,366.95.

FROM THE PRESS: China will establish a high-quality inclusive insurance system in the next five years, according to the latest guideline released by the National Financial Regulatory Administration. Inclusive insurance will focus on improving the protection level of farmers and low-income groups, increasing the risk resistance capabilities of SMEs and participating in risk protection in key areas, the guideline said. The development of inclusive insurance will be added to the performance assessment of large insurance companies and the weight of the assessment of inclusive insurance shall not be less than 5%. (Source: Shanghai Securities News)

China’s new energy vehicle capacity utilisation rate stands at 76%, making U.S. and EU accusations of overcapacity and low-price dumping unfounded, said Wang Xia, president at the automotive branch of the China Council for the Promotion of International Trade. Wang noted China is launching a new era of inclusive international technology and capital cooperation. The country's passenger car exports account for 15.9% of total sales, much lower than that of Germany, Japan and South Korea, Wang continued. (Source: Securities Daily)

Car buyers have accelerated applications for the national automobile scrapping and renewal subsidy programme, Ministry of Commerce Spokesperson He Yadong has said. MOFCOM’s trade-in platform recently received 10,000 applicants in four days, marking a jump in the growth rate, He noted. Automakers sold 1.7 million retail passenger cars in May, up about 10% m/m, of which NEV sales totalled 790,000 units. From January to May, major e-commerce platforms saw home appliance trade-ins up 81.8% y/y, He added.