CHINA: Central Bank Drains Liquidity via OMO. 

• The PBOC issued CNY558bn of 7-day reverse repo at 1.50% in this morning’s operations.
• Total maturities today CNY697bn
• Net liquidity withdrawal CNY139bn.
• The PBOC controls and maintains liquidity in the interbank market through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Index continues to decline down to 1.74%, from 1.90% yesterday.
• China overnight interbank rates are up to 1.84% from 1.50% yesterday.
• China 7-day interbank rates are down to 1.86% from 1.88% yesterday. 

Authorities want to increase foreign investment in advanced manufacturing, finance, telecommunications, medical care, education and creative arts sectors, said Song Siyuan, researcher at the Ministry of Commerce, following the recent State Council's Executive Meeting which focused on boosting FDI. Song said officials want to make foreign-invested enterprises feel assured and confident about China by improving the business environment.

China’s consumer market will grow steadily in Q1 as the government expands trade-in schemes and promotional activities, according to experts interviewed by Yicai, following the State Council's Executive Meeting which focused on boosting residents' income. Guangkai Chief Industry Research Institute predicts retail sales of consumer goods will increase by 5.5% in 2025, with macroeconomic policies prioritising the expansion of domestic demand. Wang Peng, researcher at the Beijing Academy of Social Sciences, said China’s new consumption model will rely on emerging technologies such as 5G, artificial intelligence, and big data to develop personalised consumption experiences applicable to smart homes, wearable technology products, internet medical services, smart cars and e-commerce platforms.