MNI China Daily Summary: Monday, December 16
POLICY: China will significantly increase funds raised by ultra-long term special treasures to boost consumption next year and focus on improving residents' income through multiple channels, said officials from the Central Financial and Economic Affairs Commission Office.
POLICY: Officials expect China to achieve its 2024 economic goals, given major economic indicators have rebounded significantly in the fourth quarter, according to Fu Linghui, spokesperson for the National Bureau of Statistics.
POLICY:China's consumption slowed unexpectedly in November despite the "Double 11" online shopping festival, while production and investment performance remained mediocre, data released by the National Bureau of Statistics showed.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY753.1 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY706 billion after offsetting the maturity of CNY47.1 billion. There is another CNY1.45 trillion 1Y MLF mature today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8166% from 1.6887%, Wind Information showed. The overnight repo average increased to 1.4374% from 1.4161%.
YUAN: The currency weakened to 7.2822 against the dollar from 7.2795 on Friday. The PBOC set the dollar-yuan central parity rate higher at 7.1882, compared with 7.1876 set on Friday. The fixing was estimated at 7.2785 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.6975%, down from the previous close of 1.7400%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index fell 0.16% to 3,386.33 while the CSI300 index decreased 0.54% to 3,911.84. The Hang Seng Index edged down 0.88% to 19,795.49.
FROM THE PRESS: China will look to expand domestic demand especially consumption as a long-term strategic move while continuing to deepen supply-side structural reforms to improve supply, CCTV News reported citing Han Wenxiu, deputy director of the Office of the Central Financial and Economic Affairs Commission. Authorities must promote income increases and reduce the burden for middle- and low-income groups to enhance their spending capacity, stabilise spending on big-ticket items while expanding service consumption, said Han. The Chinese economy will grow around 5% this year, contributing about 30% to global economic growth, Han added.
China's macro policies will increasingly focus on the coordination of fiscal and monetary policies, as its new fiscal stimulus will result in more government debt, Quanshang China reported citing Li Yang, chairman of National Institution for Finance & Development. The economic growth rate supported by debt expansion should be faster than the growth rate of the debt ratio, to ensure debt sustainability, said Li. Meanwhile, the issuance of government debt has a strong monetary policy effect, highlighting the need for policy coordination, Li added.
China's top securities watchdog said it will strengthen joint supervision of domestic and foreign markets, on- and off-sites markets, and futures and spot markets, as well as increase monitoring of securities margin trading, over-the-counter derivatives and quantitative trading, said China Securities Regulatory Commission in a meeting following the Central Economic Work Conference last week, Yicai.com reported. CSRC will continue to increase medium- and long-term funds into the market, and steadily promote interconnection with overseas markets, the newspaper said.