MNI China Daily Summary: Monday, November 3

EXCLUSIVE: China’s property market should stabilise over the next Five-Year Plan period, as major cities' residential prices bottom out, then rebound as policy measures help rebalance supply and demand, advisors and analysts told MNI, noting the sector’s drag on overall economic growth is also likely to ease.

DATA: China's RatingDog manufacturing PMI, previously known as the Caixin manufacturing PMI, came in at 50.6 in October, down from September's 51.2, staying in the expansionary zone above the 50 mark for the third month, due to a softer rise in output linked to a slowdown in new order growth, the publisher said.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY78.3 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY259 billion after offsetting maturities of CNY337.3 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4187% from 1.4551%, Wind Information showed. The overnight repo average decreased to 1.3127% from 1.3184%. 

YUAN: The currency weakened to 7.1225 against the dollar from the previous 7.1135. The PBOC set the dollar-yuan central parity rate lower at 7.0867, compared with 7.0880 set on Friday. The fixing was estimated at 7.1192 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7650%, down from the previous close of 1.7873%, according to Wind Information. 

STOCKS: The Shanghai Composite Index edged up 0.55% to 3,976.52, while the CSI300 index increased 0.27% to 4,653.40. The Hang Seng Index rose 0.97% to 26,158.36. 

FROM THE PRESS: Changes to value-added tax (VAT) rules for gold trading on major exchanges could strengthen China’s international influence in gold pricing, according to Song Xiangqing, vice president at the China Business Economics Association. The Ministry of Finance recently announced that transactions without physical delivery will be exempt from VAT and, VAT treatment on trades involving physical delivery will vary based on the intended use of the gold, with non-investment use either being exempt from the tax, or allowing buyers to apply a 6% input tax deduction rate. The move could attract large institutional players to concentrate more trades on the major exchanges, one expert noted, thereby enhancing market liquidity and price-setting influence.

Multi-generational households in China are becoming increasingly rare as the average number of children per family declines, said Jiang Quanbao, professor at the School of Labor Economics, Capital University of Economics and Business. Jiang noted that improved housing conditions have also contributed to smaller household sizes, with many adult children now living separately from their parents, even when residing in the same city. According to the recently released China Statistical Yearbook 2025, the national average fell to 2.51 persons per household in 2024, down from 2.62 in 2023.

China’s upcoming 15th Five-Year Plan will promote the prudent internationalisation of the renminbi, strengthening its global functions in pricing, payments, investment and reserves, and expanding its use in trade and offshore markets, according to Guan Tao, former senior official at the State Administration of Foreign Exchange. Guan noted that the section “Expanding High-Level Opening-Up” in the new recommendations for the 15th Plan was moved up by four places compared with the previous plan, highlighting the focus on openness and global economic integration.