MNI China Daily Summary: Monday, Sept 9

MNI (MNI (BEIJING)) - POLICY: China's daily crude steel production decreased 6.3% m/m to 1.96 million tonnes in August, a 1.3 percentage points expansion from June-July, but down 8.3% year-on-year, Lange Steel Research Group reported, citing statistics from the China Iron and Steel Industry Association.

POLICY: The worldwide green and low-carbon transition will boost the global use of the yuan thanks to the expansion of related trade and investment, said Wang Xin, director at Research Bureau of People's Bank of China, at the 2024 Bund Summit in Shanghai over the weekend.

POLICY: China's Consumer Price Index rose 0.6% y/y in August to a six-month high, accelerating from July’s 0.5% but underperforming the 0.7% consensus, data from the National Bureau of Statistics showed.

LIQUIDITY: The PBOC conducted CNY91.5 billion via 7-day reverse repos, with the rate unchanged at 1.70%. The operation led to a net injection of CNY88 billion after offsetting maturities of CNY3.5 billion, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8250% from 1.6890%, Wind Information showed. The overnight repo average increased to 1.7998% from 1.7188%.

YUAN: The currency weakened to7.1148 against the dollar from 7.0882 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 7.0989, compared with 7.0925 set on Friday. 

BONDS: The yield on 10-year China Government Bonds was last at 2.0450%, down from 2.0600% at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 1.06% to 2,736.49 while the CSI300 index decreased 1.19% to 3,192.95. The Hang Seng Index fell 1.42% to 17,196.96.

FROM THE PRESS: 

China will permit wholly foreign-owned hospitals in nine areas, including Beijing and Shanghai, to boost foreign investment, Securities Times reported, citing a Ministry of Commerce document released on Sunday. Foreign investors can develop and apply human stem cells and gene diagnosis in Free Trade Zones in Beijing, Shanghai, Hainan and Guangdong, the document said. Meanwhile, the 2024 negative list for foreign investment has fully opened the manufacturing sector by removing publication printing and production of Chinese medicine, the newspaper noted.

Homebuyer sentiment improved in August with 24% of respondents taking a wait-and-see approach, down two percentage points from last month, Securities Times reported, citing a survey of 11,000 residents by the China Index Academy. Developers’ promotions had improved home buying appetite, with 16% of respondents increasing their willingness to buy, up 1.2% m/m, while 31% reported a weaker willingness, down from July's 34%, the survey showed.

Yicai news agency’s Chief Economist Confidence Index reached 49.96 in September, down from August’s 50.3, and below 50.0 for the first time since January 2023. Cai Wei, chief economist at KPMG, said Q3 data showed the economy was under pressure with PMI declining and market imbalances remaining prominent. Looking ahead, Cheng Shi, chief economist at ICBC International, expects construction, investment and consumption to increase as authorities accelerate issuing special bonds and make use of CNY150 billion of funds to support consumer goods trade-in projects