MNI China Daily Summary: Tuesday, December 10
DATA: China's exports grew 6.7% y/y to USD312.3 billion in November, below the 8.9% y/y consensus and last month's 12.7% y/y increase, according to data released by China Customs. Imports, which totalled USD214.9 billion, registered a 3.9% y/y drop, dipping further from the consensus of a 0.9% y/y gain and last month's 2.3% y/y decrease.
DATA: China imported 48.5 million metric tonnes of crude oil in November, up from 44.6 mmt previously, narrowing the 3.4% y/y decline from January to October to -1.9% y/y during the first eleven months, data from the General Administration of Customs showed.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY141.6 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY90.3 billion after offsetting the maturity of CNY51.3 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8165% from 1.7790%, Wind Information showed. The overnight repo average fell to 1.4828% from 1.5246%.
YUAN: The currency strengthened to 7.2493 against the dollar from the previous 7.2760. The PBOC set the dollar-yuan central parity rate higher at 7.1896, compared with 7.1870 set on Monday. The fixing was estimated at 7.2798 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.8400%, down from the close of 1.9525% previously, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index was up 0.59% to 3,422.66, while the CSI300 index rose 0.73% to 3,995.64. The Hang Seng Index fell 0.50% at 20,311.28.
FROM THE PRESS: China’s potential investment in green transformation and industrial upgrading remains substantial, especially in quantum technology, artificial intelligence and aerospace, said Zhao Chengfeng, deputy director of the investment department at the National Development and Reform Commission, Xinhua News Agency reported. Meanwhile, high levels of water conservancy investment are needed given flood disasters, while urban underground pipeline renovations to improve gas, water and heating supply need about CNY4 trillion investment over the next five years, said Zhao.
The Yicai China Chief Economists Confidence Index reached 50.72 in December, down from 50.78 in November, marking the third consecutive month above the expansion mark of 50, the Yicai news outlet said. Regarding November’s economic data, the surveyed economists' average forecast for fixed-asset investment growth was 3.45% y/y, total retail sales of consumer goods at 5.27%, and industrial added value at 5.26%. Lian Ping, president of the China Chief Economist Forum, anticipated GDP growth of around 5.2% in Q4, and about 5% for 2024. Economists expect the upcoming Central Economic Work Conference to maintain the tone of stable growth while focusing on expanding domestic demand, developing new productive forces and consolidating the real-estate market.
China’s lower than expected November CPI print of 0.2% y/y was mainly due to high temperatures and a strong rebound in the supply of fruit and vegetables, according to Wang Qing, chief macro analyst at Orient Securities. Looking ahead, Wen Bin, chief economist at China Minsheng Bank, said CPI would be supported by higher seasonal winter demand for meat, while temperature drops may affect the production and storage of fresh food. CPI may also rise as incremental policies continue improving domestic demand and consumer confidence, Wen added.