MNI China Daily Summary: Wednesday, March 15

POLICY: Improved industrial production and retail sales provided evidence of the rebound in China's economy over January-February, while the struggling property sector posted the slowest decline in investment in seven months, data released by the National Bureau of Statistics showed.

POLICY: Policy support is needed to secure the economic recovery despite data from January and February highlighting strength in industrial production and retail sales, according to a spokesperson from the National Bureau of Statistics.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY104 billion of operations via 7-day reverse repos and CNY481 billion via 1-year MLF on Wednesday, with the rates unchanged at 2.00% and 2.75%, respectively. The operation led to a net injection of CNY381 billion after offsetting the maturity of CNY4 billion reverse repos and CNY200 billion MLF today, according to Wind Information. The operation aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.1218% from the close of 2.0780%, Wind Information showed. The overnight repo average increased to 2.1125% from the previous 1.8260%.

YUAN: The currency weakened to 6.8990 against the dollar from 6.8725 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 6.8680, compared with 6.8949 set on Tuesday.

BONDS: The yield on the 10-year China Government Bond was last at 2.8850%, up from Tuesday's close at 2.8800, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.55% at 3,263.31, while the CSI300 index increased 0.06% to 3986.90, The Hang Seng Index was up 1.52% to 19,539.87.

FROM THE PRESS:

• The China Banking and Insurance Regulatory Commission (CBIRC) said risks were “generally controllable” and the economy was recovering rapidly with the financial system operating smoothly, according to a read-out of the first leadership meeting since the Two Sessions. Supporting the expansion of consumption is 2023 is the top priority for the CBIRC. The banking regulator will support investment in the real economy, optimise financial services for exports, and standardise the development of pension services. Plans to steadily expand the institutional opening of the banking and insurance industry are also on the agenda.
• China will introduce further reform measures this year to boost national pension planning, raise pension levels and expand the inclusivity of pension supply, according to Yicai.com. The news outlet said as the "baby boom" generation nears retirement age, pension payment pressure will increase, and reforms were needed to improve the level of basic pension for retirees. Efforts will be made to expand the scope of pension schemes for migrant workers, flexible employees and people working in new business models. Beijing needs to actively respond to issues related to the aging of the population, including elderly care services and medical treatment that is currently insufficient, the news outlet said.
• Shanghai will take measures to support trade, consumption and investment to secure the economic rebound, according to a recent leadership meeting. Attended by Shanghai mayor Gong Zheng, the readout said the local government would work on standardizing trade rules to comply with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Digital Economy Partnership Agreement (DEPA) and play a leading role in institutional opening. Focus should be given to the high-quality development of the private economy and strengthening the application of digital technology. The government will deepen reform and opening up and continue to improve the quality of life of households.