MNI China Daily Summary: Wednesday, June 5

EXCLUSIVE: China’s economic slowdown represents the biggest challenge for European firms wanting to operate there, with Beijing recently improving market access, a leading European lobbyist has told MNI, noting the EU should resist excessive protectionist policies based on simplistic “level-playing field” arguments.

EXCLUSIVE: China will likely implement further property sector support, such as lower mortgage rates, to maintain the momentum of an expected sales rebound over the next few months driven by already announced easing measures, as policymakers aim to leverage household savings before resorting to any large-scale state acquisitions, advisors told MNI.

POLICY: China's government will aim to provide favourable monetary and financial conditions and ensure a solid foundation for private enterprises to integrate into the new development pattern of the economy better, senior policymakers from the National Development and Reform Commission.

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 CNY248 billion after offsetting the CNY250 billion maturity today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.7887% from the close of 1.7870% on Tuesday, Wind Information showed. The overnight repo average rose to 1.6673% from 1.6598%.

YUAN: The currency weakened to 7.2465 against the dollar from Tuesday's close of 7.2444. The PBOC set the dollar-yuan central parity rate higher at 7.1097 on Wednesday, compared with 7.1083 set on Tuesday. The fixing was estimated at 7.2421 by Bloomberg survey today.

BONDS: The yield on the 10-year China Government Bond was last at 2.2825%, down from Tuesday's close of 2.2855%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged down 0.83% to 3,065.40, while the CSI300 index fell 0.58% to 3,594.79. The Hang Seng Index down 0.10% to 18,424.96.

FROM THE PRESS: More listed companies have been issued warnings under stringent new delisting rules aimed at promoting the high-quality development of the A-share market, Securities Times reported. As of June 4, 99 listed companies have been issued risk warnings this year, due to failure to meet financial indicators or problems with the company's internal control and operation sustainability, exceeding the level of the same period last year. Among all, 55 of them were delisting risk warnings.

Minister of Commerce Wang Wentao hopes Madrid can encourage the EU to maintain a rational and open attitude in the field of green new energy, in comments made to Spanish counterparts recently. The minister stressed EU concerns over excess capacity and market distortions stemmed from “excess anxiety” and a “distorted mentality”. China will continue enhancing trade with Spain and promote two-way investment, Wang added. (Source: Yicai)

China’s SOEs need to ensure financial investments focus on their main business and refrain from high-risk financial dealings, according to Zhu Changming, head of the SOE Reform Centre. Following a government meeting on highlighting SOE core functions, Zhu said SOEs financial investments should serve as long term capital and cultivate new quality productivity and strengthen strategic emerging industries. (Source: Yicai)