MNI China Daily Summary: Wednesday, November 3

LIQUIDITY: The People's Bank of China (PBOC) injected CNY50 billion via 7-day reverse repos with the rates unchanged at 2.2%. The operation led to a net drain of CNY150 billion after offsetting the maturity of CNY200 billion reverse repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.1163% from the close of 2.1586% on Tuesday, Wind Information showed. The overnight repo average decreased to 1.9852% from the previous 2.1048%.

YUAN: The currency strengthened to 6.3970 against the dollar from 6.3985 on Tuesday. The PBOC set the dollar-yuan central parity rate higher at 6.4079, compared with the 6.4009 set on Tuesday.

BONDS: The yield on the 10-year China Government Bond was last at 2.9650%, up from Thursday's close of 2.9550%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.20% at 3,498.54, while the CSI300 index fell 0.39% to 4,821.11. Hang Seng Index lost 0.30% to 25,024.75.

FROM THE PRESS: China's economy faces new downward pressure, Chinese Premier Li Keqiang said, calling for new "phased, coordinated" policies lowering business taxes and fees to be formulated to address the production and operational difficulties faced by small and proprietary businesses, Xinhua News Agency said. Li, who chaired a meeting with market regulators on Monday, also urged financial institutions to transfer a reasonable portion of profits to the real economy, according to the official news agency. Authorities should also ensure stable supplies and prices of electricity and coal and use unemployment insurance to support workers, said Xinhua citing Li.

China remains confident in achieving carbon peak and neutrality goals as it shifts its economy to high-quality development, and westerners should not think that the country is returning to coal-based development after experiencing the current power crunch, the Economic Daily said in a commentary. The coal shortages seen in China were due to insufficient supply, as the country had closed many mines and withdrawn a billion-ton production capacity during supply-side reform since 2016, the newspaper said. The recent power crunch in more than 20 provinces reminded the authorities that low-carbon transition must be done orderly, and a stable energy supply ensures development, the newspaper said.

China's property loans increased significantly in October, an indication that the crackdown on real estate lending has adjusted, the Shanghai Securities Journal reported. Top policymakers and regulators have "corrected some misunderstandings" about the property financing rules which barred some loans for legitimate projects, and banks have been given the permissions to orderly provide credit, the newspaper said. Real estate loans slowed in the first three quarters as the Evergrande Group's debt crisis made lenders more averse to the sector, the newspaper said. However, with the changing regulatory environment, real estate loans are likely to resume the pace of growth, and property project reserves will be increased to ensure the steady development of the sector, the newspaper said citing analysts.