MNI China Daily Summary: Wednesday, November 25

LIQUIDITY: Liquidity across China's interbank market eased modestly in November, recovering from the modest tightening seen in the previous month, the latest MNI Liquidity Conditions Index shows. The Index fell to 43.8 in November from the 78.1 recorded in October, hitting the lowest reading in the last six months, this survey showed, with almost a third of respondents reporting an easing in conditions over the four-week period.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY120 billion via 7-day reverse repos with rates unchanged at 2.2%. This resulted in a net injection of CNY20 billion given the maturity of CNY100 billion repos today, according to Wind Information. The operation aims to maintain the liquidity in the banking system at a reasonable and ample level, the PBOC said on its website.

POLICY: China should consider increasing the supply of affordable housing, especially for the low-income groups, helping to boost their disposal income and push up consumption levels, Bai Chongen, a former member of the PBOC Monetary Policy Committee told the CAIJING Annual Conference in Beijing on Wednesday.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.3329% from close of 2.2940% on Tuesday, Wind Information showed. The overnight repo average fell to 1.5648% from the previous 1.8132%.

YUAN: The currency weakened to 6.5796 against the dollar from 6.5761 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 6.5749, compared with the 6.5809 set on Tuesday.

BONDS: The yield on 10-year China Government Bond was last at 3.2850%, down from Tuesday's 3.3050%, according to Wind Information.

STOCKS: The Shanghai Composite Index lost 1.19% to 3,362.33, while the CSI300 index decreased by 1.28% to 4,910.70. Hang Seng Index edged up 0.31% to 26,669.75.

FROM THE PRESS: The incoming Biden administration in the U.S. needs to restore normal competitive relations with China instead of seeing China as an enemy, the Global Times said in an editorial late Tuesday. Published following the announcement of Anthony Blinken as the next Secretary of State, the editorial said that if the State Department continues Mike Pompeo's unprofessional and ideological China policy there would be no real change to Sino-U.S. tensions. U.S. policies on China would have much broader success if Washington stopped attempting to contain China's development, and sought cooperation in addressing the pandemic and climate change, the Times editorial said.

China should accelerate the building of transportation projects to ensure continuous growth, the Economic Information Daily reported citing industry specialists. Investment in transportation rose 9.8% y/y to CNY2.51 trillion in the first three quarters, the Daily reported citing Wu Chungeng, the spokesperson for the Ministry of Transport.

China will build a strong domestic market and strengthen intellectual property protection while also creating a level playing field for domestic and foreign companies as it opens up its economy, said Premier Li Keqiang. Speaking during the "1+6" Roundtable with major international institutions including the World Bank, IMF and WTO, Li said China would work towards a market-oriented and legalized international business environment to attract more foreign capital. China will continue to innovate, step up supervision of the economy and maintain policy continuity and effectiveness, Li said in a statement posted on the Government website.