MNI China Daily Summary: Thursday, February 29

EXCLUSIVE: China’s official manufacturing Purchasing Manager’s Index will likely print within the contractionary zone at 49% or lower, due to the recent Chinese New Year holiday and the economic recovery’s weak upward momentum, which may push the central bank to cut policy rates in coming months, sources familiar with the index told MNI.

POLICY: China will boost consistency of its macro policies, within a stable and predictable policy environment, while speeding up the development of “new productive forces”, according to a Politburo meeting presided over by President Xi Jinping.

DATA: Real estate sales in March will likely fall year on year as the market needs time for expectations to recover, although they would rise month on month, China Real Estate Information said in a report on Thursday. The data provider said February property sale revenue fell 20.9% m/m and 60% y/y for the 100 largest property developers, with the fall mainly down to the Spring Festival. No significant signs of market supply and demand improvement are expected in the short term, CRIC added.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY117 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The reverse repo operation has led to a net injection of CNY59 billion reverse repos after offsetting CNY58 billion maturity today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7667% from 1.8311% on Wednesday, Wind Information showed. The overnight repo average decreased to 1.6277% from the previous 1.6777%.

YUAN: The currency strengthened to 7.1930 against the dollar from 7.1986 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 7.1036, compared with 7.1075 set on Wednesday.

BONDS: The yield on 10-year China Government Bonds was last at 2.3950%, down from Wednesday's close of 2.4000%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 1.94% to 3,015.17, while the CSI300 index was up 1.91% to 3,516.08. The Hang Seng Index was down 0.15% to 16,511.44.

FROM THE PRESS: Up to 19 provinces have released their planned investment projects earlier than usual, totalling about CNY10 trillion, with many increasing their investment amounts from 2023, Yicai.com reported. Guangdong and Zhejiang provinces have maintained an annual investment of more than CNY1 trillion, while the number and investment value of projects in Hubei province saw about 45% y/y growth. Some debt-laden areas, such as Guizhou province, have more than halved their investment scale.

China Securities Regulatory Commission said it will improve law enforcement efficiency and strengthen judicial protection to help promote the high-quality development of the capital market, according to a statement on its website. In a meeting chaired by CSRC Chairman Wu Qing, advisors suggested increasing the intensity of administrative, civil, and criminal accountability, and the formulation of judicial interpretations on civil compensation for insider trading and market manipulation, to protect the legitimate rights and interests of investors.

Beijing wants U.S. firms to invest in China and believes decoupling damages the fundamental interests of both countries, Premier Li Qiang told an American Chamber of Commerce delegation in Beijing. Li expressed hope that entrepreneurs can promote better understanding between the two countries. Additionally, Ren Hongbin, chairman of the China Council for the Promotion of International Trade, told the delegation officials wanted to deepen cooperation and inject positive energy into Sino-U.S. economic relations.