MNI China Daily Summary: Wednesday, March 12
EXCLUSIVE: China will continue to facilitate foreign institutional investors to enter its private equity and venture capital markets and further open up its interbank bond market in a bid to attract funds for key sectors and steadily strengthen the yuan's global role, a senior People's Bank of China (PBOC) official told MNI.
EXCLUSIVE: Beijing’s moves to boost domestic demand and market expectations for output cuts should keep steel rebar futures at around CNY3,150-3,400 a tonne over the next few months, local analysts told MNI, though rising global tariff barriers and increasing iron supply could present downside risk later in the year.
POLICY: China will support environmental protection equipment manufacturers to issue green bonds, expand financing channels and access government investment funds, the Ministry of Industry and Information Technology said, noting the sector's crucial foundation for the country’s green and low-carbon initiatives.
POLICY: China’s Small and Medium Enterprise Development Index reached 89.8 in February, up 0.8 points from January, reaching the highest level since June 2021, data from the China Small and Medium Enterprise Association showed.
LIQUIDITY: The PBOC conducted CNY175.4 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY177.8 billion after offsetting the maturity of CNY353.2 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.8047% from 1.8065%, Wind Information showed. The overnight repo average decreased to 1.7565% from 1.7678%.
YUAN: The currency weakened to 7.2445 to the dollar from 7.2306 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.1696, compared with 7.1741 set on Tuesday. The fixing was estimated at 7.2269 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.8700%, up from Tuesday's close of 1.7799%, according to Wind Information.
STOCKS: The Shanghai Composite Index was down 0.23% to 3,371.92, while the CSI300 index fell 0.36% to 3,927.23. The Hang Seng Index edged down 0.76% at 23,600.31.
FROM THE PRESS: China’s domestic firms’ competitiveness has contributed to declining foreign direct investment, according to Yang Liu, member of the Chinese People's Political Consultative Conference. The country's decreasing need for large-scale infrastructure investment in future could mean foreign firms entering the market without causing a strong increase in FDI, Yang noted. Officials are focused on promoting service industry opening, including telecommunications, medical care and entertainment sectors, continued Yang, who is also director at the Tianjin Investment Promotion Bureau.
China’s car sales and production reached 2.12 and 2.10 million in February, up 34.4% and 39.6% y/y, data from the China Association of Automobile Manufacturers showed. Sales of new energy vehicles reached 892,000, with production at 888,000, up 91.5% and 87.1% y/y. Market vitality has improved as tech upgrades and product renewals stimulated demand, the association said.
China's retail sales of refrigerators and other household appliances rose 56.1% y/y between October and February, with furniture and TV and other audio-visual equipment up 28.5% and 23.3%, amid government purchase subsidies, China Securities Journal reported citing VAT invoice data released by the State Administration of Taxation (SAT). Nationwide corporate sales revenue between October to February increased by 1.1 percentage points versus Q3 2024, indicating a continuous economic rebound, the SAT said.