MNI China Daily Summary: Monday, April 28

POLICY: The People’s Bank of China will cut the reserve requirement ratio and the interest rate in a timely manner and ensure ample liquidity in the banking system, while introducing instruments to support key sectors to boost the economy amid tariff tensions with the U.S., PBOC Deputy Governor Zou Lan told reporters in a briefing.

POLICY: China is confident it can achieve this year’s development goals no matter how the international situation changes, Zhao Chenxin, vice chairman of the National Development and Reform Commission, told reporters, when asked if the country can meet its 5% GDP growth target in 2025.

POLICY: Recent U.S treasury and dollar exchange-rate volatility has had a limited impact on China’s FX reserves, and the People’s Bank of China will continue to ensure yuan stability against external shocks, PBOC Deputy Governor Zou Lan told reporters in a briefing.

POLICY: China’s peak electricity load during summer months is expected to increase about 100 million kilowatts year-on-year, placing pressure on power supply, said Zhang Xing, deputy director at the National Energy Administration.

LIQUIDITY: The PBOC conducted CNY279 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY103 billion after offsetting the maturities of CNY176 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.7489% from 1.7130%, Wind Information showed. The overnight repo average decreased to 1.5888% from 1.6084%.

YUAN: The currency weakened to 7.2995 against the dollar from previous close of 7.2832. The PBOC set the dollar-yuan central parity rate lower at 7.2043, compared with 7.2066 set on Friday. The fixing was estimated at 7.2843 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6500%, down from 1.6625% at the previous close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.20% to 3,288.41, while the CSI300 decreased 0.14% to 3,781.41. The Hang Seng Index fell 0.04% to 21,971.96.

FROM THE PRESS: China lowered the minimum amount for foreign tourist tax refunds to CNY200 from the previous CNY500, according to a joint statement issued by the Ministry of Commerce and other authorities. Travelers can apply for a tax refund if they spend at the same store on the same day and meet other requirements starting Saturday, with the upper limit for their tax rebate in cash being doubled to CNY20,000. Authorities will expand the coverage of tax refund shops and streamline procedures. (Source: 21st Century Business Herald)

Profits of China's industrial enterprises rose 0.8% y/y to CNY1.5 trillion in Q1, reversing a 0.3% decline in the first two months, Yicai.com reported citing data by the National Bureau of Statistics. The Q1 profit gain followed a 3.3% fall in 2024, reversing the trend of enterprises’ continuous declines in cumulative profits since Q3 last year, the newspaper said. Thanks to a consumer goods trade-in campaign, profits in the wearable smart device manufacturing sector soared by 78.8%, while those for household kitchen appliance makers rose 21.7%, the newspaper added.

The People’s Bank of China is expected to improve its re-lending tools focused on technology innovation and inclusive pension, by extending the loan period, expanding the quota, lowering interest rates, and optimising the issuance conditions, said Securities Times in a commentary. The Politburo meeting last Friday also proposed to create new structural monetary policy tools to support expanding consumption, and stabilising foreign trade, as well as to increase the countercyclical role of policy-based financial instruments to better coordinate fiscal and monetary policies, the newspaper said.