MNI China Daily Summary: Monday, September 1

POLICY: The Shanghai Cooperation Organization (SCO) will launch a development bank as soon as possible to provide stronger support for economic cooperation among member states, Chinese President Xi Jinping said. 

DATA: China's RatingDog manufacturing PMI, previously known as the Caixin manufacturing PMI, came in at 50.5 in August, up from July's 49.5, rising back into the expansionary zone above the 50 mark, as production returned to growth on the back of rising new orders, the company said. 

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY182.7 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY105.7 billion after offsetting maturities of CNY288.4 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4454% from 1.5158%, Wind Information showed. The overnight repo average decreased to 1.3122% from 1.3295%. 

YUAN: The currency weakened to 7.1332 against the dollar from the previous 7.1330. The PBOC set the dollar-yuan central parity rate higher at 7.1072, compared with 7.1030 set on Friday. The fixing was estimated at 7.1317 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7700%, down from the previous close of 1.7785%, according to Wind Information. 

STOCKS: The Shanghai Composite Index rose 0.46% to 3,875.53, while the CSI300 index increased 0.60% to 4,523.71. The Hang Seng Index rallied 2.15% to 25,617.42. 

FROM THE PRESS: Authorities will continue to consolidate the improving momentum of the capital market, accelerate a new round of market reform and opening up, enhance the market's attractiveness and inclusiveness, and actively advocate long-term, value, and rational investment, said Wu Qing, chairman of China Securities Regulatory Commission in a recent symposium of experts on the capital market planning for the country’s 15th Five-Year Plan. Authorities should improve the quality and investment value of listed companies, strictly crack down on financial fraud, market manipulation, and insider trading as well as optimise the qualified foreign investor system and support high-quality overseas companies to return to the A-share market, according to experts. (Source: Economic Information Daily)

Chinese insurers are set to continue boosting equity investment to counter persistently low interest rates and to meet policy requirements for channeling more medium- and long-term funds into the stock market, Yicai.com reported. The combined stock investment balance of the five major A-share listed insurance companies rose by CNY411.86 billion in H1 2025 from end-2024, a 28.7% increase, according to their semi-annual reports cited by Yicai. Net investment returns at the insurers generally declined by 0.1–0.25 percentage points, partly reflecting weaker bond interest income, the report said.

The Ministry of Commerce on Saturday voiced opposition to the U.S. choice to withdraw Validated End-User authorization for three semiconductor businesses running in China. China urged the U.S. to rethink the move, adding it would take necessary measures to safeguard the legitimate rights and interests of enterprises, the Ministry said, after the U.S. removed Intel Semiconductor (Dalian) Co., Ltd., Samsung China Semiconductor Co., Ltd. and SK Hynix Semiconductor (China) Ltd. from the VEU list. VEU permission allows U.S. exporters to ship certain high-technology civilian items to pre-approved entities without requiring private export licenses for each shipment.