MNI China Daily Summary: Thursday, November 14
POLICY: China’s consumer market performed well in early November, with sales of home appliances, communication equipment and apparel from major retail enterprises up 45%, 28%, and 6% respectively, year-on-year, He Yongqian, spokesperson for the Ministry of Commerce, told reporters.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY328.2 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY309 billion after offsetting the maturity of CNY19.2 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.7174% from 1.7038% previously, Wind Information showed. The overnight repo average decreased to 1.4528% from the previous 1.4768%.
YUAN: The currency weakened to 7.2409 against the dollar from 7.2252 at Wednesday's close. The PBOC set the dollar-yuan central parity rate lower at 7.1966 on Thursday, compared with 7.1991 set on Wednesday. The fixing was estimated at 7.2325 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.0700%, down from Wednesday's close of 2.0750%, according to Wind Information.
STOCKS: The Shanghai Composite Index fell 1.73% to 3,379.84, while the CSI300 index was down 1.73% to 4,039.62. The Hang Seng Index lost 1.96% to 19,435.81.
FROM THE PRESS: China has expanded the eligibility for 1% deed tax to include first and second homes up to 140 square metres, an increase from the previous 90 square metres, The Paper reported. The deed tax for houses of more than 140 square metres, so-called luxury houses, was lowered to 1.5% from the previous 3% for first-time buyers. For properties worth CNY10 million, deed tax will be reduced from CNY300,000 to CNY150,000, the newspaper said, citing analysts. Meanwhile, residents are exempt from value-added tax when they sell property after two years.
Localities in China are accelerating investment and project activity in Q4 to speed up fund allocation and achieve this year’s annual growth targets, noted Zhang Yiqun, deputy director at the Performance Management Committee of the Chinese Society of Finance. The national construction machinery start-up rate rose by 1.6 percentage points month-on-month in October, with increases seen in 28 of the 31 provinces, Zhang noted. Zhu Hualei, senior consultant at Jufeng Investment Consulting, said intensifying project activity will support the long-term and stable development of the economy.
China must deal with the EU’s new carbon tariff measures by strengthening emissions management and accounting systems, as well as reducing the carbon footprint of products, according to Miao Lu, secretary general at the Centre for China and Globalization. Chinese firms need to reduce risk by developing diversified markets in Southeast Asia, Africa and Latin America, Miao added. Beijing must also play an active role in international rule making to ensure a policy environment favourable for domestic firms, Miao continued.