MNI China Daily Summary: Friday, June 16

EXCLUSIVE: More Chinese real-estate developers are at risk from delisting as their share prices slide, driving calls for policymakers to lift property market restrictions and stimulate housing activity, policy advisors and industry officials told MNI.

EXCLUSIVE: China’s economy continued an unbalanced recovery in May, with economists telling MNI that policymakers' focus on flagship high-tech industrial upgrading may not offset weakness in the private sector and real estate during the second half of the year, as the country targets GDP growth of about 5%.

POLICY: The National Development and Reform Commission will learn from its Zhejiang High Quality Development & Common Prosperity Development Zone when it formulates policy to raise household incomes nationwide.

POLICY: China will prioritise automobile consumption and energy storage infrastructure to boost domestic demand, according to the National Development and Reform Commission.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY42 billion via 7-day reverse repos, with the rates at 1.90%. The operation has led to a net injection of CNY40 billion after offsetting the maturity of CNY2 billion reverse repo today, according to Wind Information. The operation aims to hedge the impact of tax payment and keep banking system liquidity reasonable and ample, the PBOC said on its website.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.9416% from 1.8167%, Wind Information showed. The overnight repo average increased to 1.9317% from the previous 1.4325%.

YUAN: The currency strengthened to 7.1168 against the dollar from 7.1555 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 7.1289, compared with 7.1489 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.7400%, up from 2.7175% at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.63% to 3,273.33 while the CSI300 index rose 0.96% to 3,963.35. The Hang Seng Index was down 1.07% to 20,040.37.

FROM THE PRESS: The Government will encourage state-owned enterprises to use capital markets to improve competitiveness, enhance allocation of resources and achieve high-quality development, according to a notice from the State-owned Assets Supervision and Administration Commission. The notice said SOEs should use mergers and acquisitions to enhance business models and asset value. Investors are expecting SOEs to focus M&A activity on industrial integration of strategic emerging industries, according to one analyst. (Source: Securities Daily)

Industrial firms linked to the real estate sector will continue facing pressure in H2, according to industry analysts interviewed by the 21st Century Herald. Upstream companies will be most impacted, especially steel, cement and glass, according to Zhou Maohua, a macro researcher at China Everbright Bank. Wang Guoqing, director of the Lange Iron and Steel Research Center, said hot and rainy weather over the summer will impact steel firms and hamper construction projects. The economy’s insufficient demand remained the concern for the current industrial recovery, the Herald said. (Source: 21st Century Herald)

The Ministry of Commerce (MOFCOM) will coordinate policy support for home appliance consumption, according to MOFCOM Spokesperson Shu Jueting. Speaking at a recent press conference, Shu said local governments planned to invest over CNY2.5 billion to promote consumption, with a focus on rural households replacing and upgrading older appliances. Nationwide, officials are planning 300 large-scale promotion activities and will make efforts to upgrade the after sales service industry. Shu added consumers that upgrade to newer appliances will contribute to the green-energy transition. (Source: MOFCOM website)