MNI China Daily Summary: Monday, July 14

POLICY: The People’s Bank of China (PBOC) will continue implementing its moderately accommodative policy and boost existing measures in a bid to ensure hitting the annual economic growth target, deputy governor Zou Lan told reporters in a brief.

POLICY: China does not seek international competitive advantage through yuan depretiation and remains committed to the decisive role of the market in the exchange rate, said PBOC Vice Governor Zou.

POLICY: China’s H1 imports reached CNY8.79 trillion, down 2.7% y/y, impacted by uncertainty in international trade policies and falling prices of bulk commodities, Wang Lingjun, deputy director at the General Administration of Customs, told reporters.

DATA: Exports in June reached USD325.1 billion, up 5.8% y/y, exceeding Mays 4.8% and the forecasted 5.2%, data released by China Customs showed. Imports rose 1.1% in June, the first positive change in four months and beating the market consensus of 0.5%.

DATA: China's total social financing rose by CNY4.2 trillion in June to hit a three-month high, nearly doubling May's CNY2.29 trillion, data released by the PBOC showed. Banks extended CNY2.24 trillion in new loans in June, rising from May's CNY620 billion, also hitting a three-month high. M2 money supply grew by 8.3% y/y to hit the highest since April 2024, beating market forecasts of an 8.2% growth and accelerating from 7.9% in May.

LIQUIDITY: The PBOC conducted CNY226.2 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY119.7 billion after offsetting the maturity of CNY106.5 reverse repo today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.5360% from 1.4718%, Wind Information showed. The overnight repo average increased to 1.4240% from 1.3427%. 

YUAN: The currency strengthened to 7.1693 against the dollar from the previous 7.1710. The PBOC set the dollar-yuan central parity rate higher at 7.1491, compared with 7.1475 set on Friday. The fixing was estimated at 7.1772 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6670%, up from the previous close of 1.6640%, according to Wind Information. 

STOCKS: The Shanghai Composite Index edged up 0.27% to 3,519.65, while the CSI300 index increased 0.07% to 4,017.67. The Hang Seng Index rose 0.26% to 24,203.32. 

FROM THE PRESS: China will achieve the commercialisation of 400 kilometers per hour high-speed railway operations, an improvement from current 350 kilometers per hour – the world’s fastest, Yicai.com reported, citing Wang Lixin, deputy general manager of China Railway Group. China’s high-speed train network covered more than 97% of the country's large cities with a population of above 500,000 by 2024, the newspaper said.

China has adjusted evaluation metrics for state-owned insurance companies, which will likely promote an increase and stabilisation of insurance funds’ A-share investment proportion, Securities Daily reported, citing analysts. The assessment of insurers' return on equity will shift from a "current year and a 3-year cycle" model, to a multi-tiered system, incorporating current-year, 3-year and 5-year cycle metrics, with weights of 30%, 50% and 20% respectively, the daily said.

Local governments are expected to boost home sales by increasing mortgage loan quotas taken from housing provident funds and supporting fund account withdrawls to pay down payments, Securities Daily reported, citing Chen Wenjing, director of policy research at the China Index Academy. Beijing city announced last week, homebuyers can use their fund for down payments while also applying for a mortgage, after more than 30 cities, including Shenzhen and Hangzhou, relaxed the use of the fund so far this year, the newspaper said.