MNI China Daily Summary: Monday, January 27
POLICY: China's Manufacturing Purchasing Managers Index fell by 1.0 points to 49.1 in January, falling below the breakeven 50 mark for the first time in four months, missing market expectations of 50.1 and hitting the lowest level since August, data from the National Bureau of Statistics showed.
POLICY: China’s industrial profits at large firms increased 11.0% y/y in December, rebounding from November’s 7.3% y/y fall, data from the National Bureau of Statistics showed.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY298 billion via 14-day reverse repos, with the rate at 1.65%. The operation led to a net injection of CNY175 billion after offsetting the maturity of CNY123 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.8629% from 1.9626%, Wind Information showed. The overnight repo average increased to 1.7037% from 1.6541%.
YUAN: The currency weakened to 7.2650 against the dollar from 7.2412 on Friday. The PBOC set the dollar-yuan central parity rate lower at 7.1698, compared with 7.1705 set on Friday. The fixing was estimated at 7.2451 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.6050%, down from the previous close of 1.6450%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index fell 0.06% to 3,250.60 while the CSI300 index decreased 0.41% to 3,817.08. The Hang Seng Index edged up 0.55% to 20,197.77.
FROM THE PRESS: Declining local government land-sale revenue is expected to narrow to single digits in 2025, given the ongoing structural adjustment in the property sector, according to Luo Zhiheng, chief economist at Yuekai Securities. Ministry of Finance data showed land-sale revenue fell 16% last year. Luo said authorities had increased optimism given the acceleration of high-quality plots and revitalising land, however, corporate confidence in acquiring land remained low given high debt risks. (Source: 21st Century Business Herald)
Shenzhen’s GDP increased 5.8% y/y in 2024, with primary, secondary and tertiary industries up 1.5%, 8.3% and 4.3% y/y, according to data from the Shenzhen Municipal Bureau of Statistics. The added value of computer, communication and other electronic equipment sectors grew 11.0% y/y, with 3D printing equipment, industrial robots up 35.8%, 31.8% y/y. Total retail sales of consumer goods rose 1.1% y/y. (Source: Yicai)
China’s eight major industries, which include ferrous, non-ferrous and construction sectors, have seen electricity demand grow by 43.5% since the start of the 14th Five-Year Plan, demonstrating the nation’s progress in industrial upgrading, according to Jiang Debin, deputy director at the China Electricity Council. The country’s electricity consumption is expected to increase about 6% this year, a recent report from the China Electricity Council showed. Electricity’s share of total energy demand will reach about 34% in 2030, up from 29% last year, the report noted. (Source: Yicai)