MNI China Daily Summary: Wednesday, March 6

POLICY: China can attain this year's economic growth target of 'around 5% in a high-quality manner', Zheng Shanjie, director of the National Development and Reform Commission said at a press conference during the National People’s Congress (NPC). Zhang said the economy would benefit from a firmer foundation compared to last year, and the government would take measures to attract foreign investment and boost confidence for the private sector.

POLICY: Major economies are expected to loosen monetary policy in 2024 and the USD will weaken, allowing the People’s Bank of China (PBOC) greater policy space, Pan Gongsheng, PBOC governor said at an NPC press conference.

POLICY: China’s local government debt risks are generally under control, with guaranteed repayment of debts on the book, declining scale of implicit debts and decreasing number of local government financing vehicles, said Finance Minister Lan Foan at an NPC press conference.

POLICY: Protecting small and medium sized investors in the stock market remains the most important task for regulators, said Wu Qing, head of the China Securities Regulatory Commission. Speaking to reporters, Wu said regulators would make efforts to attract long term investors, and ensure the market becomes fair and just.

POLICY: Shanghai will further open up its financial markets and introduce more products including futures and options for foreign investors in a bit to build up a global hub for the yuan-denominated asset allocation, said Jin Penghui, head of Shanghai branch of PBOC during the NPC.

LIQUIDITY: The PBOC conducted CNY10 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The reverse repo operation has led to a net drain of CNY314 billion reverse repos after offsetting CNY324 billion maturity today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.8351% from the close of 1.8624% on Tuesday, Wind Information showed. The overnight repo average fell to 1.7134% from 1.7231%.

YUAN: The currency weakened to 7.1992 against the dollar from 7.1991 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.1016, compared with 7.1027 set on Tuesday. The fixing was estimated at 7.1950 by Bloomberg survey today.

BONDS: The yield on the 10-year China Government Bond was last at 2.2950%, down from Tuesday's close of 2.3375%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged down 0.26% to 3,039.93, while the CSI300 index fell 0.41% to 3,551.05. The Hang Seng Index gained 1.70% to 16,438.09.

FROM THE PRESS: China has entered the era of consumer cities dominated by the services industry and therefore needs policy reforms to integrate digital with the real economy and strengthen offline experiences, according to Lu Ming, NPC member and director of the China Development Institute at Shanghai Jiao Tong University. To develop the consumer era further, policymakers should speed up urbanisation and allow migrant workers access to public services. China needs to expand the services industry to create more employment opportunities for low skilled workers, Lu added. (Source: 21st Century Business Herald)

China must develop new productive forces but not neglect traditional industries, President Xi Jinping has told the Jiangsu delegation at the People’s Congress in Beijing. Authorities must use policies to build a modern industrial system according to local conditions and resources, industrial foundations, and scientific research. Looking ahead, Xi told the delegation China will enhance the basic market system by focusing on property rights protection, market access, and fair competition. (Yicai)

Authorities should improve the regulation of China’s vacation system to expand domestic demand and accelerate tourism as an engine of economic growth, according to Fok Qigang, member of the NPC and the Legislative Council in Hong Kong. Policymakers should make vacation reforms to alleviate overcrowding, unleash consumer demand, and improve the urban-rural development gap, Fok added. (Source: Yicai)