MNI China Daily Summary: Tuesday, May 7

EXCLUSIVE: China will work to ensure the property sector's adjustment, expected to unfold over several years, does not spill over into the financial system, a senior policy advisor to the National Development and Reform Commission told MNI, adding authorities will launch more policies aimed at stabilising sentiment, growth and employment to boost investment and consumer spending.

DATA: China’s foreign exchange reserves totalled USD3.208 trillion through end-April, down 1.38% from March, according to data released by the State Administration of Foreign Exchange (SAFE).

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY2 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The operation has led to a net drain of CNY43 billion after offsetting the maturity of CNY440 billion today, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.8458% from 1.8782%, Wind Information showed. The overnight repo average fell to 1.7498% from 1.7651%.

YUAN: The currency weakened to 7.2147 from 7.2137 at Monday's close. The PBOC set the dollar-yuan central parity rate higher at 7.1002, compared with 7.0994 set on Monday. The fixing was estimated at 7.2148 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 2.2869%, down from Monday's close of 2.3040%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index gained 0.22% to 3,147.74 while the CSI300 index edged up 0.03% to 3,659.01. The Hang Seng Index edged down 0.53% to 18,479.37.

FROM THE PRESS: Tier-one city Shenzhen lowered homebuying thresholds in seven non-core districts on Monday following Beijing’s move to relax home purchase limits in suburban areas late April, cls.cn reported. Homebuyers without local residency will have homebuying qualifications if they have paid one year of income tax or social security, compared to the previous three-year requirement. While local families with more than two minor children are allowed to purchase an additional house in those districts. Housing inventories remain high in those districts and home prices continue to fall, pressuring surrounding second-hand housing prices and accelerating market decline, the news agency noted.

Chinese SOE fixed-asset investment reached CNY2.5 trillion in Q1, up 10.4% y/y , 5.9 pp higher than the national level due to strong investment in strategic emerging industries, according to Hu Chi, a researcher at the State-owned Assets Supervision and Administration Commission. SOEs investing in fixed assets marks the first step to achieve the goal of 35% of revenue from strategic emerging industries by 2025, Hu added. SOEs in culture and tourism sectors recovered rapidly in Q1 as the macro-economy stabilised, said Wu Gangliang, a researcher at the China Enterprise Reform and Development Research Association.

President Xi Jinping emphasised China will import more high quality French agricultural products, including ham and wine, in a meeting with President Macron in Paris. China will also extend the visa free policy for citizens of 12 countries including France, until the end of 2025. Meeting President von der Leyen, President Xi said the EU and China were two important forces in the world, and both sides should adhere to their partnership and promote stable and healthy relations. (Source: Yicai)