MNI China Daily Summary: Monday, February 24
MNI (BEIJING) - POLICY: China’s NPC Standing Committee has met to prepare for the third annual session of the 14th National People's Congress to be held in Beijing on March 5, 2025, state media outlet Xinhua News has said.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY292.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY102 billion after offsetting the maturity of CNY190.5 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.0550% from 2.2156%, Wind Information showed. The overnight repo average decreased to 1.8774% from 1.9499%.
YUAN: The currency strengthened to 7.2484 against the dollar from 7.2554 on Friday. The PBOC set the dollar-yuan central parity rate higher at 7.1717, compared with 7.1696 set on Friday. The fixing was estimated at 7.2532 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.8000%, up from the previous close of 1.7500%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index edged down 0.18% to 3,373.03 while the CSI300 index decreased 0.22% to 3,969.72. The Hang Seng Index fell 0.58% to 23,341.61.
FROM THE PRESS: China is expected to reduce the required reserve ratio by between 0.5 to 1.0 percentage points throughout 2025, according to Lian Ping, chairman at the China Chief Economist Forum. Lian said more liquidity was needed to address a deficit increase of about CNY500 billion, ultra-long-term special treasury bonds of about CNY1 trillion and local special bonds of about CNY500 billion, as well as more financing demand from enterprises and residents. Lian noted the central bank's pivot to moderately loose policy has medium- to long-term considerations. (Source: Yicai)
China’s railway services transported 513 million passengers and 415 million tonnes of goods during the 40 day Spring Festival season, a year-on-year increase of 6.1% and 5.4%, a record high, according to data released by the China Railway Group. A total of 3,230 China-Europe trains were operated, an increase of 0.7% year-on-year, while the China-Laos railway transported 642,000 tonnes of cross-border goods, up 8.1% y/y.
China’s CPI growth target will likely be around 2% in 2025, down from 3% last year, while maintaining an annual GDP growth target at around 5%, Securities Times reported, citing analysts. Lowering the inflation policy would help build consensus around promoting a price rebound amid weak demand, said Wu Chaoming, chief economist of Chasing Securities, noting the previous CPI target was unchanged since 2004 when authorities tried to prevent prices from rising too quickly. Zhu Baoliang, former chief economist at the State Information Center of China, said a CPI increase should be clearly defined as a major policy target and 5% GDP growth was necessary to address employment issues.