MNI China Daily Summary: Thursday, October 17
EXCLUSIVE:China’s economy should grow by 4.5-4.8% in Q3, meaning a likely multi-trillion-yuan boost to government spending will be vital to achieve expansion of at least 5.1% in Q4 and meet the 5% annual growth target, advisors and analysts told MNI.
POLICY: China will use a cash-based method to settle residents in urban-village renovations and double the credit scale of whitelisted housing projects to CNY4 trillion by year-end in a bid to stabilise the housing market, Housing Minister Ni Hong told reporters.
POLICY: The People's Bank of China (PBOC) will enhance its relending tools as incentives to support the acquisition of existing land and houses to promote the use of idle land and improve cash flow in the real-estate sector, Tao Ling, deputy-governor of the central bank, told reporters
LIQUIDITY: The PBOC conducted CNY132.6 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY17.4 billion after offsetting the maturity of CNY150 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.6093% from 1.6367% previously, Wind Information showed. The overnight repo average decreased to 1.4279% from the previous 1.4706%.
YUAN: The currency weakened to 7.1233 against the dollar, from 7.1150 at Wednesday's close. The PBOC set the dollar-yuan central parity rate higher at 7.1220, compared with 7.1191 set on Wednesday. The fixing was estimated at 7.1212 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.1100%, down from Wednesday's close of 2.1225%, according to Wind Information.
STOCKS: The Shanghai Composite Index lost 1.05% to 3,169.38, while the CSI300 index was down 1.13% to 3,788.22. The Hang Seng Index fell 1.02% to 20,079.10.
FROM THE PRESS: Strong demand for cross-border yuan financing has pushed the scale of dim sum bonds to CNY794 billion as of Oct 14, a rise of 25% from same period last year, Securities Times reported citing Wind data. Some enterprises are even replacing their U.S. dollar loans with yuan borrowing to reduce financing costs, avoid interest-rate fluctuation risks and realise exchange gains, the newspaper said. In the short term, the dollar interest rates are still about 3 percentage points higher than the yuan, and the interest spread is expected to narrow at a slower pace, as the yuan is likely to maintain at around 7.12 against the dollar in Q4, the newspaper said citing analysts.
More cities will offer homebuyers eligibility to apply for household registration, referred to as Hukou in China, which has been a key attraction for non-natives in major cities as it links with high-quality medical care and education, Securities Daily reported citing analysts. About 20 cities have relaxed the threshold to stimulate home sales, including Suzhou, Chengdu and Changsha, since the beginning of this year, the newspaper said. Some other cities like Shenyang and Foshan have further relaxed restrictions down to renters, the newspaper added.
Over 10 million consumers had purchased more than 14 million household appliances as of Oct 15 via the trade-in programme, Economic Daily reported citing data by the Ministry of Commerce. It enjoyed CNY13 billion subsidies from the central government, and has driven a total CNY69 billion of sales. Cities are expanding the programme to green and intelligent appliances such as water purifiers and sweeping robot, the daily said.