MNI China Daily Summary: Friday, Oct 31

POLICY: China’s construction business activity index, a key sub-index of the non-manufacturing Purchasing Managers’ Index (PMI), fell to 49.1% in October, down 0.2 percentage points from September, the National Bureau of Statistics (NBS).

POLICY: China's Manufacturing Purchasing Managers Index fell by 0.8 points to 49.0 in October from September, hitting a six-month low and staying below the breakeven 50 mark for the seventh month, data from the National Bureau of Statistics showed.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY355.1 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY187.1 billion after offsetting maturities of CNY168 billion today, according to Wind Information

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4551% from 1.5018%, Wind Information showed. The overnight repo average increased to 1.3184% from 1.3115%. 

YUAN: The currency weakened to 7.1135 against the dollar from the previous 7.1107. The PBOC set the dollar-yuan central parity rate higher at 7.0880, compared with 7.0864 set on Thursday. The fixing was estimated at 7.1190 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7875%, down from the previous close of 1.8022%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.81% to 3,954.79, while the CSI300 index decreased 1.47% to 4,640.67. The Hang Seng Index fell 1.43% to 25,906.65.

FROM THE PRESS: China hopes the U.S. can work together to implement the consensus reached at the meeting between the two heads of state with concrete actions, strengthen dialogue and communication, properly manage differences, and expand mutually beneficial cooperation to lay a more solid foundation for Sino-U.S. relations, said People’s Daily in a commentary. The meeting proved again that the common interests between the two countries far outweigh their differences, and the world is large enough to accommodate two major powers for China and the U.S. to be partners and friends, the newspaper said.

The recently announced CNY500 billion policy-based financial instruments, which have been fully deployed, are expected to drive a total investment of over CNY7 trillion, Shanghai Securities News reported. The China Development Bank, the Agricultural Development Bank of China, and the Export-Import Bank of China deployed CNY250 billion, CNY150 billion, and CNY100 billion respectively, which will drive CNY3.85 trillion, CNY1.93 trillion, and CNY1.3 trillion project investment. The funds will mainly support projects in digital economy, artificial intelligence, and the consumer sector, the newspaper said.

Authorities will expand the product categories offered by duty-free shops to mobile phones, micro drones, sporting goods, health supplements, over-the-counter drugs, and pet food, to boost consumption, according to a document released by the Ministry of Finance and four other departments, Yicai.com reported. It is also necessary to increase efforts to promote domestic products, especially those that embody Chinese culture, as the current variety of duty-free goods is relatively limited, mainly consisting of luxury items. The ministry also relaxed the approval authority for the establishment of duty-free shops to local governments, the newspaper said.