MNI China Daily Summary: Wednesday, February 5
POLICY: China saw 501 million domestic trips during the Spring Festival holiday, up 5.9% on the 2024 holiday, the Ministry of Culture and Tourism announced.
POLICY: China’s Caixin Services PMI reached 51.0 in January, down 1.2 points from December but remained above the expansionary level of 50 for the 25th consecutive month, Caixin reported.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY697 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY716.5 billion after offsetting the maturity of CNY1.4315 trillion 14-day reverse repos today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8713% from 1.8629%, Wind Information showed. The overnight repo average increased to 1.7976% from 1.7037%.
YUAN: The currency weakened to 7.2724 to the dollar from 7.2650 on Tuesday. The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1693 on Wednesday, compared with 7.1698 set before Chinese New Year holiday. The fixing was estimated at 7.2813 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.5950%, down from Tuesday's close of 1.6050, according to Wind Information.
STOCKS: The Shanghai Composite Index decreased 0.65% to 3,229.49, while the CSI300 index fell 0.58% to 3,795.08. The Hang Seng Index declined 0.93% at 20,597.09.
FROM THE PRESS: The U.S. should control fentanyl by addressing domestic loopholes and cooperating with many countries, including China, given the global nature of the issue, according to Ying Pinguang, professor at the School of International Organisations at Shanghai University. Criminals can by-pass China’s best efforts to stop the drug through black-market transactions and disguising exports to other countries, Ying said. China led the world in 2019 by banning over 100 fentanyl derivatives, far exceeding international conventions, Ying added. U.S. President Donald Trump has linked the illicit fentanyl trade to tariff actions against China, Canada and Mexico. (Source: Globe.com)
China has demonstrated its firm commitment to the multilateral trading system by filing a World Trade Organisation complaint after the U.S. moved to impose tariffs on Chinese imports, said Wu Suilong, director at the Shanghai WTO Affairs Consulting Center. Washington’s behaviour will weaken international law and cause turmoil in international trade and financial markets, Wu noted. (Source: Yicai)
China’s cross-regional people flow increased 7.2% y/y during the Spring Festival, setting a historical record, data from the Ministry of Transport showed. Ctrip Group, a major travel services platform, said inbound travel orders on their app increased 203% during this year’s festival, while Qunar.com reported outbound travel spread to 2,100 destinations, an increase of 50% y/y. (Source: Securities Daily)