MNI China Daily Summary: Wednesday, March 22

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY67 billion of operations via 7-day reverse repos, with the rates unchanged at 2.00%. The operation led to a net drain of CNY37 billion after offsetting the maturity of CNY104 billion reverse repos 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) decreased to 2.0863% from the close of 2.2271% on Tuesday, Wind Information showed. The overnight repo average decreased to 1.9296% from the previous 2.4205%.

YUAN: The currency weakened to 6.8903 against the dollar from 6.8738 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 6.8715, compared with 6.8763 set on Tuesday.

BONDS: The yield on the 10-year China Government Bond was last at 2.8600%, down from Tuesday's close of 2.8725%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.31% at 3,265.75, while the CSI300 index increased 0.43% to 3,999.44, The Hang Seng Index was up 1.73% to 19,591.43.

FROM THE PRESS: China will deepen economic cooperation with Russia and improve the quality and quantity of commercial relations between the two nations, Chinese President Xi Jingping told Russian Prime Minister Mishustin at a meeting in Moscow. Xi said both sides will jointly maintain security and stability in energy and industrial supply chains. China also wants to implement the Economic and Trade Cooperation Agreement with the Eurasian Economic Union to develop deeper regional cooperation. Mishustin said Russia is willing to strengthen cooperation with China in areas such as investment and trade, energy, natural gas, peaceful uses of nuclear energy and aerospace. (Source: Yicai.com)

The People's Bank of China (PBOC) move to lower the reserve requirement ratio (RRR) will support the real estate market by improving wider economic conditions and boosting house buyer sentiment, according to news outlet Cailian. Analysts said while not directly aimed at the real estate sector, RRR cuts historically had boosted the market by easing financial conditions for developers. The foundation of the property recovery is not solid and the latest RRR cut does not rule out more targeted interest rate cuts for the sector in the near future, the news outlet said.

Improving total factor productivity is the key to achieving high quality growth of around 5% over the next 10 years, according to economists speaking at the Peking University's Policy Analysis Conference. To boost productivity, experts called for reforms to state-owned enterprises, improvements to intellectual property rights, and more private enterprise creativity. In the short term, it is necessary to make good use of macro policies to secure the economic recovery, which will provide long term benefits and technological strength.