MNI China Daily Summary: Wednesday, March 17

POLICY: China can overcome the middle-income trap in 2025 when its per capita GDP reaches about USD13,000 from about USD10,000 now, said Xu Hongcai, deputy director of the Economic Policy Commission of the China Association of Policy Science, reinforcing expectations and addressing concerns about the quality of the country's growth. While the Chinese economy may grow 8.5% this year given the low base in 2020, the growth rate may decelerate to 6% or even to 5.8% next year but may still sit above 5% in 2025, said Xu at a press salon held by the All-China Journalists Association on Wednesday. He added that China needs average 4.7% growth in the next 15 years to double per capita GDP by 2035.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with rates unchanged at 2.2% on Wednesday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion 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) dropped to 2.1383% from Tuesday's close of 2.2198%, Wind Information showed. The overnight repo average fell to 1.9854% from 2.1168% on Tuesday.

YUAN: The currency weakened to 6.5030 against the dollar from Tuesday's close of 6.4995. The PBOC set the dollar-yuan central parity rate lower at 6.4978, compared with the 6.5029 set on Tuesday.

BONDS: The yield on 10-year China Government Bonds was last at 3.2925%, down from Tuesday's close of 3.2975%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.03% to 3,445.55, while the CSI300 index rose 0.42% to 5,100.86. The Hong Kong's Hang Seng Index slightly increased 0.02% to 29,034.12.

FROM THE PRESS: The yuan will show no clear advantage this year as the recovering global economy makes other nations' assets more attractive, Guan Tao, an economist at Bank of China Securities and a former official at State Administration of Foreign Exchange, wrote in a commentary by Netease Research. The yuan's valuation is also affected by China's rate of Covid inoculation, which is slower than some of its competitors, Guan said. The PBOC has also refrained from significant tightening, said Guan. On inflation, Guan said China's CPI may be moderately capped at 3%, given rising pork supplies and stable industrial production.

China should enhance laws on data property rights to protect personal and commercial data and rein in the unregulated expansion of platform companies, many of which take advantages of loopholes to abuse rights of consumers, said the 21st Century Business Herald in the editorial. MNI noted that a chorus of state media has criticized the ecommerce industry after President Xi Jinping this week signaled further crackdown on privately owned online giants such as Alibaba Group and Meituan Inc., whose sprawling businesses provide essential services such as delivery and online shopping. Large so-called platform companies have expanded into multiple industries and overwhelmed smaller businesses, the newspaper said.

China's tourism and entertainment industries are expected to surge as authorities loosen pandemic restrictions, the Securities Times said in a frontpage commentary. Beijing has removed requirements for nucleic acid tests on inbound travelers and nearby commuters. Entertainment performances around the countries are no longer restricted, benefiting hotels and transportation, the newspaper said. The economy is expected to fully recover with a nationwide inoculation push underway, the Times said.