MNI China Daily Summary: Tuesday, January 25

EXCLUSIVE: China has tweaked its zero-Covid policy to a targeted effort that should limit the economic impact, though this may not be enough to fully normalise production capacity and could pressure exports as other economies recover at a faster pace, Qiu Xiaohua, former director of the National Bureau of Statistics (NBS) told MNI.

EXCLUSIVE: China is betting a pickup in investment will ensure at least 5% economic growth in 2022, on a possible real estate rebound and as more infrastructure projects are launched, offsetting expected weaker exports, Qiu Xiaohua, former director of the NBS told MNI.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY150 billion via 14-day reverse repos Tuesday, with the rate unchanged at 2.25%. The operation has led to a net injection of CNY50 billion after offsetting the maturity of CNY100 billion repos today, according to Wind Information. The operation aims to keep liquidity stable before the Spring Festival, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.9918% from the close of 2.0499% on Monday, Wind Information showed. The overnight repo average fell to 1.9204% from the previous 1.9286%.

YUAN: The currency strengthened to 6.3252 against the dollar from Monday's close of 6.3320. The PBOC set the dollar-yuan central parity rate higher at 6.3418, compared with 6.3411 set on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 2.7000%, up from Monday's close of 2.6700%, according to Wind Information.

STOCKS: The Shanghai Composite Index tumbled 2.58% to 3,433.06, while the CSI300 index fell 2.26% to 4,678.45. The Hong Kong's Hang Seng Index lost 1.67% to 24,243.61.

FROM THE PRESS: The PBOC urged banks to prioritize credit growth with an "all-out" effort to achieve a good start in Q1, support the reasonable financing needs of real estate developers and better meet home purchase demands, the Shanghai Securities News reported citing a conference held by the central bank in Beijing. Maintaining stability is the biggest progress before the downward economic pressure is fundamentally relieved, the meeting said, emphasizing that finance should play a keep role in underpinning the economy.

Most provinces in China set their annual economic growth targets lower than their actual growth rate in 2021 amid increased downward pressure, Caixin reported. Economically developed provinces in China such as Guangdong, Jiangsu, Shandong, Shanghai and Beijing mostly set the 2022 growth target between 5% and 5.5%, which are references for understanding the national GDP target, the newspaper said citing Guo Lei, chief economist of GF Securities. The city of Beijing sets a 2022 target of “more than 5%”, the lowest among 30 provinces that have released targets, the newspaper said.

China Evergrande Group on Monday asked for more time from its overseas creditors to work on a "comprehensive, detailed and effective" debt restructuring plan, according to a statement on the company website. The company called on bondholders to refrain from taking any “radical legal actions” that may affect its current hard-won stability. The company will communicate with its creditors after further studies and evaluation, citing the complexity due to the group's large size, its many businesses and stakeholders involved, the statement said.