MNI China Daily Summary: Wednesday, February 12
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY558 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY139 billion after offsetting the maturity of CNY697 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.8500% from 1.9013%, Wind Information showed. The overnight repo average decreased to 1.8147% from 1.9103%.
YUAN: The currency weakened to 7.3089 to the dollar from 7.3061 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.1710, compared with 7.1716 set on Tuesday. The fixing was estimated at 7.3010 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.6275%, up from Tuesday's close of 1.6250%, according to Wind Information.
STOCKS: The Shanghai Composite Index rose 0.85% to 3,346.39, while the CSI300 index gained 0.95% to 3,919.86. The Hang Seng Index rallied 2.64% at 21,857.92.
FROM THE PRESS: China’s consumer market will grow steadily in Q1 as the government expands trade-in schemes and promotional activities, according to experts interviewed by Yicai, following the State Council's Executive Meeting which focused on boosting residents' income. Guangkai Chief Industry Research Institute predicts retail sales of consumer goods will increase by 5.5% in 2025, with macroeconomic policies prioritising the expansion of domestic demand. Wang Peng, researcher at the Beijing Academy of Social Sciences, said China’s new consumption model will rely on emerging technologies such as 5G, artificial intelligence, and big data to develop personalised consumption experiences applicable to smart homes, wearable technology products, internet medical services, smart cars and e-commerce platforms.
China’s auto market is expected to recover gradually during February, following January's negative growth, 21st Century Business Herald reported, citing the China Passenger Car Association (CPCA). The national passenger car market retailed 1.8 million vehicles last month, down 12.1% y/y or 31.9% m/m, marking the third lowest level in the past decade over the same period, CPCA data showed. The Spring Festival had reduced purchase time by four days with many buyers completing transactions before the holiday, according to CPCA.
Authorities want to increase foreign investment in advanced manufacturing, finance, telecommunications, medical care, education and creative arts sectors, said Song Siyuan, researcher at the Ministry of Commerce, following the recent State Council's Executive Meeting which focused on boosting FDI. Song said officials want to make foreign-invested enterprises feel assured and confident about China by improving the business environment.