MNI China Daily Summary: Friday, Aug 23

MNI (MNI (BEIJING)) - POLICY: China's Road Logistics Freight Rate Weekly Index, a measure of road freighter charges across China, reached 1042.6 this week, up 0.08% from last week, according to the China Logistics Information Center.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY379.3 billion via 7-day reverse repos, with the rate unchanged at 1.70%. The operation led to a net injection of CNY241.5 billion after offsetting maturities of CNY137.8 billion, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8475% from 1.8406%, Wind Information showed. The overnight repo average increased to 1.8143% from 1.7833%.

YUAN: The currency strengthened to 7.1368 against the dollar from 7.1376 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 7.1358, compared with 7.1228 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.0900%, down from 2.0950 at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.20% to 2,854.37 while the CSI300 index increased 0.42% to 3,327.19. The Hang Seng Index fell 0.16% to 17,612.10.

FROM THE PRESS: 

China’s electricity consumption increased 7.7% from January to July, reaching 559.71 billion kilowatt hours, with demand up 5.7% last month, National Energy Administration data showed. Electricity consumption of primary, secondary and tertiary industries increased by 7.5%, 6.6%, and 11.0% y/y. In July, electrical machinery and equipment manufacturing grew 12.4% y/y, photovoltaic equipment went up 20.7% and new energy vehicle manufacturing rose by 42.8%. Song Xiangqing, vice president at the Chinese Society of Business Economics, expects demand to maintain rapid growth driven by mobile internet, big data, cloud computing, and charging services sectors.

China’s outward non-financial direct investment increased 16.2% y/y in the first seven months to reach USD83.5 billion, according to He Yadong, spokesperson at the Ministry of Commerce.  Investment in Belt and Road countries was USD17.9 billion, up 7.7% y/y, He noted. Outward investment will maintain strong growth going forwards driven by China’s competitive advantage in key industries and infrastructure construction, said Lv Yue, professor at the University of International Business and Economics. Lv expects strong investment in green and digital sectors, future industries, and industrial supply chain.

The EU’s action against Chinese EV makers weakens investment confidence and hinders cooperation, according to Wang Zhisheng, vice president at the European Union China Chamber of Commerce. Anti-subsidy investigations have damaged investment confidence in 82% of Chinese firms, Wang noted, citing a European Union Chamber of Commerce in China report. Imposing tariffs will raise prices, suppress demand and slow the EU’s green transformation, Wang noted.