MNI China Daily Summary: Monday, June 30

DATA: China's Manufacturing Purchasing Managers Index rose by 0.2 points to 49.7 in June, but remained below the breakeven 50 mark for the third month, data from the National Bureau of Statistics showed.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY331.5 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY111 billion after offsetting the maturity of CNY220.5 reverse repo today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.9159% from 1.6968%, Wind Information showed. The overnight repo average increased to 1.5102% from 1.3683%. 

YUAN: The currency strengthened to 7.1656 against the dollar from the previous 7.1690. The PBOC set the dollar-yuan central parity rate lower at 7.1586, compared with 7.1627 set on Friday. The fixing was estimated at 7.1704 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6500%, up from the previous close of 1.6470%, according to Wind Information. 

STOCKS: The Shanghai Composite Index edged up 0.59% to 3,444.43, while the CSI300 index increased 0.37% to 3,936.08. The Hang Seng Index fell 0.87% to 24,072.28. 

FROM THE PRESS: The PBOC’s Monetary Policy Committee will aim to increase the relevancy and effectiveness of its policies, the Economic Information Daily reported, citing a quarterly MPC meeting. The central bank was still expected to promote RRR and interest rate cuts in H2, following easing in May, given increased export pressure and low price levels, despite officials not mentioning the phrase “a timely reduction of reserve requirement ratio and interest rates”, said Wang Qing, analyst at Golden Credit Rating.

China’s boom in ‘ancient city’ construction has led to homogenisation, a lack of character and over-commercialisation, leading to few tourists at many attractions, 21st Century Business Herald reported, citing industry insiders. Kong Xuhong, vice dean at the School of Tourism of Fujian Business University, previously stated ancient town investment had become a magic weapon for local governments to boost their performance and for companies to obtain subsidies and financing investment. However, insufficient exploration of historical, cultural and folk customs led designers and operators to blindly pursue the ‘internet influencer effect’, Kong added. Lin Peng, director at the China Ancient City and Culture Research Institute, publicly noted China had developed more than 2,800 ancient cities and towns, with most people only able to remember around eight.

China will resolutely counter any party reaching a trade deal with the U.S. at the expense of China's interests in exchange for so-called tariff reductions, according to a spokesperson from the Ministry of Commerce. China calls on parties in negotiation with the U.S. to stand on the side of fairness and firmly defend international economic and trade rules and the multilateral trading system, the statement added.