MNI China Daily Summary: Friday, September 17

EXCLUSIVE: China's green shift for the economy has pulled in all of the government's key economic agencies to assess the risks and rewards of spending trillions of yuan into the next generation to replace traditional energy, with the People's Bank of China playing a major role, policy advisors told MNI.

POLICY: China has officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Ministry of Commerce said in a statement on its website late Thursday.

LIQUIDITY: The PBOC injected CNY50 billion via 7-day reverse repos and another CNY50 billion via 14-day reverse repos with the rate unchanged at 2.2% and 2.35%, respectively. The operations lead to a net injection of CNY90 billion after offsetting the maturity of CNY10 billion reverse repos today, according to Wind Information. The operation aims to keep liquidity stable by the end of the quarter, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.3998% from the close of 2.2634% on Thursday, Wind Information showed. The overnight repo average fell to 2.2106% from the previous 2.2289%.

YUAN: The currency weakened to 6.4521 against the dollar from 6.4447 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 6.4527, compared with the 6.4330 set on Thursday.

BONDS: The yield on the 10-year China Government Bond was last at 2.8750%, down from Thursday's close of 2.8825%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.19% to 3,613.97, while the CSI300 gained 1.00% to 4,855.94. The Hong Kong's Hang Seng Index rallied 1.03% to 24,920.76.

FROM THE PRESS: As China prepares to launch next Friday the southbound leg of the Bond Connect, a scheme that allows domestic investors to access Hong Kong-traded bonds, domestic institutional investors may start with buying yuan-denominated dim sum bonds as well as high-grade U.S. dollar bonds issued by Chinese local governments in Hong Kong, given to the significant differences between domestic and foreign bond markets, Yicai.com reported citing industry insiders. Investors are unlikely to buy high-risk real estate dollar bonds, the newspaper said. The daily quota capped under CNY20 billion is very small, but the opening of the southbound link will encourage domestic investors to buy dollar bonds issued by Chinese companies overseas, which generally have better liquidity and higher yield, the newspaper said.

The top immunologist at China's CDC Wang Huaqing suggested vaccinating children under 12 years old after over 70% of the country's 1.4 billion population were fully vaccinated, said the Global Times. The country had vaccinated more than 1 billion people aged 12 and above, the newspaper said. So far China has approved three inactivated vaccines for emergency use on those three years or older. However, based on a gradual vaccination strategy, shots have only been given to people aged 12 and above. Fully vaccinated people include over 200 million aged 60 and above and another 95 million aged 12-17, the newspaper said.

The trilateral Aukus alliance could make Australia a target for a nuclear strike as nuclear-armed states like China and Russia are directly facing the threat from Australia's nuclear submarines which serve U.S. strategic demands, the state-owned Global Times reported citing a "senior Chinese military expert" which the newspaper didn't identify. Deploying nuclear submarines will force China to change its attitude toward Australia and its military deployment and countermeasures, the Times said. The Aukus partnership confirms that Australia is going all the way with the US in what many have labeled a new 'cold war' with China, the newspaper said.