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MNI China Daily Summary: Thursday, July 23

MNI (London)
     TOP NEWS: China will consider not recognizing British National (Overseas)
passports as valid travel documents, in response to London's new policy of
allowing Hong Kong residents to claim British citizenship, China's Foreign
Ministry said Thursday that. The UK's new policy is a violation of international
law and interferes with China's internal affairs, said spokesperson Wang Wenbin
at a press conference.
     POLICY: China will push self-employment and part-time or net-based work
arrangements to deal with this year's challenging job market and boost incomes,
a transcript from the State Council executive meeting held on Wednesday said.
The government will also offer entrepreneurship subsidies, guaranteed loans, and
tax incentives to college graduates, migrant workers and the self-employed, and
help develop online retail, education and training, as well as medical care
jobs, the transcript said.
     POLICY: One of China's leading policy banks increased lending to export
businesses by half over last year, helping companies over the worst impacts of
the global slowdown, interrupted supply chains and the dip in domestic demand as
the pandemic spread in the first half of the year, a leading bank official said
Thursday. The Export and Import Bank of China (Exim), one of three big China
policy banks, boosted loans for export firms to CNY904.7 billion in H1, an
increase of around 50% on last year, Wu Fulin, president of The Export and
Import Bank of China (Exim), told a press conference held by China's Banking and
Insurance Regulatory Commission.
     LIQUIDITY: The People's Bank of China (PBOC) injected CNY50 billion via
7-day reverse repos with the rate unchanged on Thursday, offsetting the maturing
CNY50 billion reverse repos and leaving liquidity unchanged, according to Wind
Information. The medium-term lending facilities (MLFs) and targeted MLFs (TMLFs)
maturing today had been rolled over on July 15, so liquidity needs have been
met, PBOC said. MNI record showed the central bank conducted CNY400 billion MLF
in mid-July intended to offset today's maturing CNY200 billion MLF and CNY297.7
billion TMLF.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.1891% from Wednesday's close of 1.9614%, Wind
Information showed. The overnight repo average increased to 1.8487% from the
previous 1.3423%.
     YUAN: The currency strengthened to 6.9921 against the dollar from 7.0059 on
Wednesday. PBOC set the dollar-yuan central parity rate higher at 6.9921,
compared with the 6.9718 set on Wednesday.
     BONDS: The yield on 10-year China Government Bond was last at 2.9050%, up
from the close of 2.8850% on Wednesday, according to Wind Information. 
     STOCKS: The Shanghai Composite Index lost 0.24% to 3,325.11, while the
CSI300 index edged down 0.04% to 4,712.44. Hang Seng Index gained 0.82% to
     FROM THE PRESS: China should scale back its stimulative monetary policies
now the economy has resumed growth, to prevent some of the historical and
systemic financial issues from further worsening, Yu Lingqu, a researcher at a
state-sponsored think tank China Development Institute, wrote in an article
published on the official portal The leverage ratio is likely to
rise to a new record after reaching 269.3% from 245.4% through Q1, Yu said
citing data from National Institution for Finance & Development. The real estate
market and the bull run in stocks indicated asset bubbles, and the current
banking and capital structure continues to leave most bank lending out of the
reach of small businesses, Yu said. "We should not be overly optimistic" about
China's finance and economy and must increase measures to prevent financial
risks, Yu wrote.
     China's regulators are stepping up controls to prevent resurging high-risk
shadow banking and declining bank asset quality amid the epidemic, the Economic
Information Daily reported. Authorities have ordered banks and insurance
companies not to lengthen their financing chains, increase financing costs or
bank-trust channels that cause the funds to be used for financial speculation,
the daily said.
     The Shanghai government held a contract-signing ceremony Wednesday to
demonstrate its ability to continue drawing investments and foreign companies'
interests in the China market, the Shanghai Securities News reported. The event
publicized 54 investment projects over USD8 billion, featuring MNCs including
HSBC. Shanghai received $10.3 billion actual investments in H1, up 5.4% from a
year ago, the journal said. About 26 new MNCs established regional headquarters
in Shanghai, along with 10 R&D centers, it said.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]
MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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