MNI China Daily Summary: Monday, November 30

LIQUIDITY: The People's Bank of China (PBOC) injected CNY150 billion via 7-day reverse repos with rates unchanged at 2.2% on Monday. The PBOC also issued CNY200 billion through medium-term lending facilities (MLF) and kept the rate at 2.95%. This resulted in a net injection of CNY310 billion given the maturity of CNY40 billion repos today, according to Wind Information. The operation aims to maintain the liquidity stable in the banking system at the end of the month, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) declined to 2.3049% from close of 2.3676% on last Friday, Wind Information showed. The overnight repo average fell to 1.0826% from the previous 0.8178%.

YUAN: The currency weakened to 6.5827 against the dollar from 6.5823 on last Friday. The PBOC set the dollar-yuan central parity rate higher at 6.5782, compared with the 6.5755 set on last Friday.

BONDS: The yield on 10-year China Government Bond was last at 3.2605%, down from last Friday's 3.3125%, according to Wind Information.

STOCKS: The Shanghai Composite Index down 0.49% to 3,391.76. The CSI300 index lost 0.41% to 4,960.25. Hang Seng Index plunged 2.06% to 26341.49.

FROM THE PRESS: China and the U.S. should let their practical needs, not ideology, determine the trajectory of bilateral relations, according to an editorial in the Global Times. While some Americans perceive China as a strategic adversary, China is a needed partner in addressing problems including the global control of Covid-19 pandemic, the newspaper said. The Biden administration should stop the Trump approach of blaming China for the failure in controlling the pandemic, the editorial said.

China's overall credit growth in 2021 is likely to be marginal as the PBOC had signaled a more neutral policy approach, according to an editorial in the Economic Information Daily. The central bank's Q3 Monetary Policy Implementation Report focused on the importance of controlling the overall money supply, and the stabilization of the rising macro leverage ratio, the editorial said. The PBOC is likely to utilize multiple policy tools to ensure ample liquidity and stable market rates, and to match M2 money supply and the growth of social financing with nominal GDP growth, the Daily said.

China's GDP growth may reach 8.1% as macroeconomic indicators have improved strongly each quarter, YiCai reported citing forecasts from the China Macroeconomy Forum at Renmin University. Policymakers should however be cautious as many extraordinary policies supporting the current economic rebound end next year, according to Liu Yuanchun, the Vice Dean of the state-run school with ties to PBOC. China needs to continue to expand domestic demand while maintaining ample supply and return to normalized macro control measures, the report said.