MNI China Daily Summary: Tuesday, Sept 10

MNI (MNI (BEIJING)) - POLICY: China's exports rose for the fifth consecutive month by 8.7% y/y in August, beating the 6.6% market consensus and accelerating from July’s 7.0%, data released by Customs showed.

POLICY: China imported 49.1 million metric tonnes of crude oil in August, up from July’s 42.3 million metric tonnes, according to data released by Chinese customs.

LIQUIDITY: The PBOC conducted CNY186 billion via 7-day reverse repos, with the rate unchanged at 1.70%. The operation led to a net injection of CNY184.8 billion after offsetting maturities of CNY1.2 billion, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8612% from 1.8250%, Wind Information showed. The overnight repo average increased to 1.9409% from 1.7991%.

YUAN: The currency weakened to 7.1235 against the dollar from 7.1148 on Monday. The PBOC set the dollar-yuan central parity rate higher at 7.1136, compared with 7.0989 set on Monday. 

BONDS: The yield on 10-year China Government Bonds was last at 2.0200%, down from 2.0300% at Monday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.28% to 2,744.19 while the CSI300 index increased 0.09% to 3,195.76. The Hang Seng Index rose 0.22% to 17,234.09.

FROM THE PRESS: 

Analysts expect panda-bond issuance to exceed CNY200 billion in 2024, as low financing costs attract overseas issuers, Securities Daily reported. As of Monday, 81 panda bonds totalling CNY142.7 billion have been issued since the start of this year, up 25% when compared to the same period last year, the Daily said. The expansion of panda bonds will improve the openness and international influence of China's debt market, and promote yuan internationalisation, the newspaper said, citing analysts.

The government should increase investment in public goods to address insufficient effective demand after August’s CPI rose 0.6% y/y and PPI fell 1.8% y/y, according to Zhang Liqun, a researcher at the Macroeconomic Research Department of the State Council. Zhang noted although food-price rises would be short term, authorities should support low-income groups' consumption in a timely manner. Wang Qing, chief macro analyst at Dongfang Jincheng, said downward pressure on industrial consumer goods and service prices would see September's CPI reach around 0.5%, ending two consecutive months of acceleration. (Source: Yicai)

Multinational companies are likely to increase investment in emerging markets and reduce profit repatriation should the Federal Reserve begin rate cuts, Yicai.com reported, citing Xing Ziqiang, chief economist at Morgan Stanley China. China’s foreign direct investment had fallen amid a cyclical decline in global capital investment, as geopolitical changes have encouraged companies to prioritise safety over efficiency, the newspaper said, citing Chong Quan, president of the China World Trade Organization Research Association.