MNI China Daily Summary: Thursday, October 31

EXCLUSIVE:China’s goods import volume growth rate is expected to increase in 2025 closer to Asia's anticipated 5.1% y/y rise as government efforts to boost the economy and domestic demand take effect, with export quantities set to cool in line with regional patterns, the World Trade Organisation’s chief economist has told MNI.

DATA:China's Manufacturing Purchasing Managers Index rose by 0.3 points to 50.1 in October, rising above the 50 mark for the first time in six months, as additional pro-growth policies kicked in, data from the National Bureau of Statistics showed.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY327.6 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY471.3 billion after offsetting the maturity of CNY798.9 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7044% from 1.7211% previously, Wind Information showed. The overnight repo average decreased to 1.3708% from the previous 1.3806%.

YUAN: The currency strengthened to 7.1160 against the dollar from 7.1222 at Wednesday's close. The PBOC set the dollar-yuan central parity rate lower at 7.1250, compared with 7.1390 set on Wednesday. The fixing was estimated at 7.1244 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 2.1275%, down from Wednesday's close of 2.1400%, according to Wind Information.

STOCKS: The Shanghai Composite Index rose 0.42% to 3,279.82, while the CSI300 index was up 0.04% to 3,891.04. The Hang Seng Index edged down 0.31% to 20,317.33.

FROM THE PRESS: Home sales in first-tier cities Shenzhen and Shanghai showed strong momentum in October following the stimulus announced at the end of September, the Paper reported. New home sale contracts signed online in Shenzhen reached 3,211 by Oct 28, with the monthly total expected to hit the highest since 2022, the newspaper said, citing data by Centaline Property Agency. Shanghai saw 12,703 new home units, including commercial housing, signed online, marking the strongest activity in H2 so far. Second-hand housing transactions, including commercial housing, exceeded 20,000 units, the newspaper noted.

Chongqing is increasingly viewed as China’s fourth city as growth momentum in the central metropolis outpaces Guangzhou, according to experts interviewed by Yicai. Chongqing’s GDP reached CNY2.3 trillion during the first three quarters, up 6.0% y/y, while Guangzhou’s hit CNY2.2 trillion, up 2.0% y/y, official data showed. From January to September, the added value of large-scale industries in Chongqing increased by 8.1% y/y versus Guangzhou’s 2.2% decline, while automotive manufacturing increased 25.9% in Chongqing while Guangzhou saw a 17.4% contraction. The operating income of service sector firms in Guangzhou grew 7.4% between January and August, slower than the 9.9% in Chongqing, Yicai noted.

Technical teams from China and the EU are currently conducting a new stage of consultations regarding EV tariffs, according to the China Chamber of Commerce for Machinery and Electronics. The Chamber will continue to represent Chinese industry in negotiating price commitments and safeguarding rights and interests, a notice from the organisation said. The European side had not addressed the core concerns of China's industry during eight rounds of intensive consultations held in Brussels during a 20-day period starting on Sept 20 and significant differences between the two sides remain, the notice continued.