MNI China Daily Summary: Thursday, March 2

EXCLUSIVE: China’s National People’s Congress is expected to unveil a growth target of over 5% powered by more fiscal spending and higher government debt, likely prompting the People’s Bank of China to commit to cooperating with the push to revive growth through ample liquidity supply and targeted tools, policy advisers and economists told MNI.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY73 billion of operations via 7-day reverse repos, with the rates unchanged at 2.00%. The operation has led to a net drain of CNY227 billion after offsetting the maturity of CNY300 billion reverse repos today, according to Wind Information. The operation aims to keep banking system 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 1.9972% from 2.0887%, Wind Information showed. The overnight repo average decreased to 1.5863% from the previous 2.0610%.

YUAN: The currency weakened to 6.9086 against the dollar from 6.8854 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 6.8808 on Thursday, compared with 6.9400 set on Wednesday.

BONDS: The yield on 10-year China Government Bonds was last at 2.9250%, up from Wednesday's close of 2.9125%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.05% to 3,310.65, while the CSI300 index fell 0.22% to 4,117.74. The Hang Seng Index was down 0.92% to 20,429.46.

FROM THE PRESS: Subsidies available for the purchase of electric cars in 2023 will be clarified soon, according to Xin Guobin, deputy minister of the Ministry of Industry and Information Technology. Speaking at a press conference, Xin said the new energy vehicle industry in 2023 will a maintain positive trend off the back of strong growth in 2022. Authorities would continue to cultivate independent brands that delivered innovation and international competitiveness. Citing industry experts, the 21st Century Herald said it was expected financial subsidies and support policies for new energy vehicles will gradually shift from the purchase level to the user level, including the reduction of parking fees and road tolls, and the optimisation of the distribution of charging facilities.

This year has been officially announced as the “Year of Consumption” by the Ministry of Commerce (MOFCOM). At a national consumer promotion event, MOFCOM said they planned a series of activities aimed at stabilising mass consumption of automobiles, home appliances and other goods. Beijing’s local government also announced March as the “Consumption Promotion Month” which will include activities such as promotional festivals, with various regions and relevant industry associations planning events aimed at boosting consumption. (Source: Securities Daily Network).

Beijing plans to promote State Owned Enterprises (SOE) listing on stock exchanges will speed up reforms and improve the corporate governance, according to Securities Daily. Citing analysts, the paper said the plans would help construct a modern capital market with Chinese characteristics and allow firms to transition from a capital management culture to become more corporate orientated. The listing of central enterprises will inject high-quality resources into the capital market, provide more choices for investors, and enhance market competitiveness, the paper said.