MNI China Daily Summary: Thursday, June 23

POLICY: China and the U.S. should meet 'halfway' and make joint efforts to create conditions for economic and trade cooperation, Shu Jueting, spokeswoman of the Ministry of Commerce told a briefing, after Washington's recent comment about considering the easing of additional tariffs on Chinese goods imposed since 2018. “The earlier the tariffs are lifted, the sooner consumers and businesses will benefit at the backdrop of high inflation,” said Shu

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.1%. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.6135% from 1.6922% on Wednesday, Wind Information showed. The overnight repo average fell to 1.4335% from the previous 1.4379%.

YUAN: The currency strengthened to 6.7080 against the dollar from 6.7171 on Wednesday. The PBOC set the dollar-yuan central parity rate higher at 6.7079, compared with 6.7109 set on Wednesday.

BONDS: The yield on 10-year China Government Bond was last at 2.8275%, up from the previous close of 2.8230%, according to Wind Information.

STOCKS: The Shanghai Composite Index gained 1.62% to 3,320.15, while the CSI300 index rose 1.72% to 4,343.88. Hang Seng Index rallied 1.26% to 21,273.87.

FROM THE PRESS: China will step up macroeconomic policy manoeuvres, adopt more forceful measures, and strive to achieve the economic and social development goals for the whole year and minimize the impact of Covid-19, CCTV News reported citing President Xi Jinping’s keynote speech kicking off the BRICS Business Forum on Wednesday. Xi also called for strengthening macroeconomic policy coordination to prevent the slowdown, urging developed countries to pursue responsible economic policies to avoid a serious spillover impact on developing countries, Xi was cited as saying.

China will further unleash the potential of automobile consumption, mainly by relaxing the relocation policy of used cars to revive the second-hand car market and improving the scheme of parallel auto imports, according to a statement on the gov website following the State Council executive meeting chaired by Premier Li Keqiang on Wednesday. The government is also considering extending a purchase tax exemption for new-energy vehicles, the statement said. These measures are expected to increase auto consumption by about CNY200 billion this year, the statement added.

The yuan is unlikely to see another sharp depreciation against the U.S. dollar, as the dollar index has limited upward space while the Chinese economy has bottomed out, the China Securities Journal reported citing analysts. The dollar index is unlikely to break through the high range of 105 to 106 in the short-term following the Fed’s June rate hike, the newspaper said citing a report by Nanhua Futures Co. The yuan will remain basically stable at a balanced level in Q3 with increasing two-way moves, the newspaper said.