MNI China Daily Summary: Monday, October 13

DATA: Exports in September rose 8.3% y/y to USD 328.6 billion, with growth accelerating from 4.4% in August and exceeding expectations for 6.5%, data released by China Customs showed. Imports climbed 7.4% y/y, up sharply from 1.3% in August and well above the 1.8% market consensus.

POLICY: China’s total imports and exports reached CNY4.04 trillion in September, up 8% y/y, higher than the 4% growth in Q3, Deputy Head at the General Administration of Customs Wang Jun said.

POLICY: China’s imports of iron-ore reached 116 million tonnes in September, up 10.5% m/m, according to customs statistics.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY137.8 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY137.8 billion as no reverse repos matured, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.4495% from 1.3945%, Wind Information showed. The overnight repo average increased to 1.3131% from 1.3103%.

YUAN: The currency weakened to 7.1329 against the dollar from the previous 7.1232. The PBOC set the dollar-yuan central parity rate lower at 7.1007, compared with 7.1048 set on Friday. The fixing was estimated at 7.1234 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8325%, up from the previous close of 1.8180%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged down 0.19% to 3,889.50 while the CSI300 index decreased 0.49% to 4,593.98. The Hang Seng Index declined 1.52% to 25,889.48.

FROM THE PRESS: Yicai News Agency’s Chief Economist Confidence Index registered 50.3 points in October, down from 50.6 in September but remaining above the 50-point expansion threshold for the third consecutive month. Economists forecast third-quarter GDP growth at 4.8% year-on-year, with expectations for a similar pace in the fourth quarter. For the full year, the average GDP growth projection remained at 4.8%. Regarding upcoming September economic data, participants projected CPI growth at -0.2% year-on-year, PPI at -2.3%, fixed-asset investment growth at 0.0%, retail sales of consumer goods up 3.1% and industrial value-added up 5.1%. Analysts agreed that the probability of adjustments to the Loan Prime Rate (LPR) or the reserve requirement ratio (RRR) in October remained low, suggesting a steady monetary policy stance in the near term.

China’s recent trade measures concerning rare earth products do not constitute an export ban and applications that meet the relevant requirements will be approved, a spokesperson for the Ministry of Commerce stated. According to the spokesperson, China notified all relevant countries through its bilateral export control dialogue mechanism prior to the announcement. The spokesperson further noted the potential impact of the measures on global supply chains would be minimal.

China’s Small and Medium-Sized Enterprise Development Index (SMEDI) reached 89.0 in September, a slight decline of 0.1 points from August, according to data released by the China Association of Small and Medium Enterprises. Ma Bin, executive vice president at the association, said multiple government departments had intensified the implementation of macroeconomic policies, helping the economy maintain a steady and progressive trajectory. Looking ahead, the top priority was to expand market demand to create more development opportunities and growth drivers for SMEs and to strengthen the foundation for sustained recovery. The labour force and profitability sub-indices rose by 0.1 points and 0.2 points, compared with August. Meanwhile, indices for the macroeconomic sentiment, comprehensive business, market, cost, capital and inputs declined by 0.2 points, 0.4 points, 0.1 points, 0.1 points, 0.2 points, and 0.1 points from the previous month.