MNI China Daily Summary: Thursday, July 24

POLICY: China’s President Xi Jinping met with President António Costa of the European Council and President Ursula von der Leyen of the European Commission on Thursday, at the Great Hall of the People in Beijing. Xi has called on the EU to keep its trade and investment markets open to Chinese enterprises and stressed the need for further cooperation in green and digital partnerships, Xinhua News Agency said on Thursday.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY331 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY119.5 billion after offsetting maturities of CNY450.5 billion today, according to Wind Information

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.5759% from the previous 1.4826%, Wind Information showed. The overnight repo average increased to 1.6515% from 1.3710%.

YUAN: The currency strengthened to 7.1547 against the dollar from the previous 7.1610.The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1385 on Thursday, compared with 7.1414 set on Wednesday. The fixing was estimated at 7.1516 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7435%, up from 1.7060% at previous close, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index was up 0.65% to 3,605.73, while the CSI300 index gained 0.71% to 4,149.04. The Hang Seng Index increased 0.51% at 25,667.18.

FROM THE PRESS: China should consider approving several large state-owned banks to issue yuan stable coins and coordinate development between the central bank's traditional currency and the digital yuan and private financial innovators such as Alipay and WeChat Pay, according to Li Yang, chairman at the National Finance and Development Laboratory. China’s offshore environment and Hong Kong dollar may open up connections to the USD stable coin, allowing for further yuan internationalization, Li added.

Commercial banks in Guangdong will address involuted competition and promote the sustainable development of the sector, the Guangdong Banking Association announced, following a special work meeting. Members should strengthen self-discipline and respond to increasingly fierce market competition, the meeting said. According to industry insiders, involuted competition involves the asymmetric decline of deposit and loan interest rates, continuous narrowing of net-interest margins, escalating price wars and a slowdown in net-income growth. (Source: Yicai)

Elderly disabled citizens in pilot areas will receive subsidy vouchers towards the purchase of home, community or institutional based care services, the Ministry of Civil Affairs and the Ministry of Finance announced. Vouchers of up to CNY800 per month will be issued for long or short-term institutional care and CNY500 for home-based services. The vouchers can offset 30%–60% of the cost of such services. Wang Dehua, a researcher at the Chinese Academy of Social Sciences, said the central government will shoulder the majority of the funding.