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Free AccessMNI China Daily Summary: Monday, March 5
BEIJING (MNI) - DATA: China aims to keep its economy growing at a
moderately slower pace of about 6.5% this year, compared with actual 6.9%
expansion in 2017, according to Premier Li Keqiang's report at the National
People's Congress. That is the same target though as last year. Inflation will
be capped at about 3%, the government said. While seeking continuity and
consistency in macro policies, China will keep its fiscal policy "proactive,"
with 2.6% targeted debt-to-GDP ratio, a reduction of 0.4 percentage point from
last year.
DATA: Growth in China's services sector remained strong in February with
both business activity and new orders rising, according to the latest survey of
purchasing managers jointly released by Caixin and Markit Monday. The Caixin
Service PMI eased to 54.2 in February from 54.7 in January, but still marked the
second highest reading since March 2013.
RATES: Interbank market rates diverged after the PBOC refrained from
conducting Open Market Operations, effectively draining CNY100 billion into the
market. The 7-day repo average fell to 2.8755% from 2.9150% Friday, while
overnight repo average is down at 2.6288% from 2.7646%.
YUAN: The yuan edged up against the U.S. dollar to trade at 6.3403 compared
with Friday's close of 6.3472. PBOC set the yuan central parity rate vs the U.S.
dollar at 6.3431 on Monday, weaker than last Friday's 6.3334.
YUAN: China's currency rebounded from its dip last week on a trade-weighted
basis against the currencies of its major trading partners, according to weekly
data released on Monday by the PBOC. The CFETS Weekly RMB Index, which measures
the yuan relative to a basket of 24 currencies, gained 0.49% last week from a
week ago to 96.27 - catching up on ground lost in the past two weeks.
BONDS: The yield on benchmark 10-year China Government Bond was at 3.8551%,
compared with the previous close of 3.8373%.
STOCKS: The Shanghai Composite Index edged up 0.1% to close 3,256.93, while
the Hang Seng Index was down 2.3% to 29,874.03.
FROM THE PRESS: China must control monetary supply and limit increases in
lending, which are the most important steps in preventing financial risks,
reported the official Shanghai Securities News on Sunday citing Yang Weimin, the
deputy head of Central Leading Group on Financial and Economic Affairs. China
must further increase supervision of the financial industry, not loosen it, Yang
was cited as saying. China must continue to deepen supply-side reform, and
remove zombie companies and excess capacity, Yang said. Local governments most
borrow with prudence, not excessively nor through hidden means, Yang said. China
needs to contain "some bubbles" in the property market of some top three-tier
cities and it needs to not actively "pinch" the bubbles, or make them bigger,
the newspaper reported Yang as saying.
China will strengthen its economic monitoring, forecasting and warning
systems to help improve the government's foresight, Xinhua News Agency reported
Sunday, citing a communique from the Communist Party's Third Plenum concluded
over the weekend. China will "strengthen and optimize financial management
capabilities," and increase coordination among monetary policies,
macro-prudential policies and financial regulations. China must guard its last
line of preventing system financial risks and defend the country's financial
safety, it said. Overall, China will strengthen the control of power by the
Communist Party, which is lacking in some areas of the government. It will also
deepen reform of the governing structure and allow the market to better allocate
resources.
China will keep strict controls over the property markets this year, the
21st Century Business Herald reported, citing unidentified analysts. More
second- and third-tier cities are set to introduce policies that will curb real
estate growth, the Herald said. Overall property transactions will decline this
year, the newspaper said, citing analysts. Cities of Sanya, Wuhan and Kunming
have recently published guidelines to strengthen controls, including limiting
prices, sales volume and regulation of purchase deposits, reported the Herald.
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: beijing@mni-news.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.