MNI China Daily Summary: Thursday, August 28

POLICY: China’s senior trade negotiator Li Chenggang has travelled to Washington this week for talks with U.S. officials, Commerce Ministry spokesperson He Yongqian confirmed.

POLICY: China’s social logistics, the total market value of goods transported through the logistics system, reached CNY201 trillion in January-July, up 5.2% from a year earlier, compared with 5.6% growth in the first half, the China Federation of Logistics and Purchasing said, according to state media.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY416.1 billion via seven-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY163.1 billion after offsetting maturities of CNY253 billion, according to Wind Information

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.5395% on Thursday from 1.5123% previously, Wind Information showed. The overnight repo average decreased to 1.3134% from the previous 1.3145%.

YUAN: The currency strengthened to 7.1385 against the dollar, from 7.1622 at Wednesday's close. The PBOC set the dollar-yuan central parity rate lower at 7.1063 on Thursday, compared with 7.1108 set on Wednesday. The fixing was estimated at 7.1465 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7875%, up from Wednesday's close of 1.7575%, according to Wind Information.

STOCKS: The Shanghai Composite Index gained 1.14% to 3,843.60, while the CSI300 index rose 1.77% to 4,463.78. The Hang Seng Index fell 0.81% to 24,998.82.

FROM THE PRESS: China's industrial enterprises saw their operating income grow by 0.9% y/y in July, while total profits decreased by 1.5% y/y, narrowing for the second month by 2.8 percentage points from June, Shanghai Securities News reported citing data by the National Bureau of Statistics. A 6.8% growth in profits made by manufacturing companies, which accelerated 5.4 pp from June, helped to drive the headline number by 3.6 pp. The profit recovery is expected to continue on government efforts to stabilise the economy and curb price wars as well as fading disturbances caused by extreme weather, the newspaper said citing analysts.

Stamp duty on securities transactions is likely to maintain strong growth on the back of rising trading volumes, Securities Daily reported, citing analysts. Revenue jumped 125% y/y to CNY15.1 billion in July, Ministry of Finance data showed. Since the rate was halved on Aug 28, 2023, investors have saved more than CNY250 billion in total, the newspaper said.

China’s new momentum index for economic development was 136 in 2024, an increase of 14.2% over the previous year, Securities Daily reported citing data by National Bureau of Statistics. Total expenditure on research and development reached CNY3.6 trillion, up 8.3%. The number of high-value invention patents per 10,000 people reached 14, an increase of 2.2 over 2023.