MNI China Daily Summary: Thursday, July 31

POLICY: China's Manufacturing Purchasing Managers Index fell by 0.4 points to 49.3 in July, staying below the breakeven 50 mark for the fourth month, affected by traditional off-season, high temperatures, heavy rains and floods in some areas, data from the National Bureau of Statistics showed.

LIQUIDITY: The PBOC conducted CNY283.2 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY47.8 billion after offsetting maturities of CNY331 billion today, according to Wind Information

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.5542% on Thursday from 1.5176% previously, Wind Information showed. The overnight repo average increased to 1.3957% from the previous 1.3152%.

YUAN: The currency weakened to 7.1930 against the dollar, from 7.1823 at Wednesday's close. The PBOC set the dollar-yuan central parity rate higher at 7.1494, compared with 7.1441 set on Wednesday. The fixing was estimated at 7.2065 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6750%, down from Wednesday's close of 1.7000%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 1.18% to 3,573.21, while the CSI300 index decreased 1.82% to 4,075.59. The Hang Seng Index declined 1.60% to 24,773.33.

FROM THE PRESS: The central government budget will allocate CNY90 billion to support the issuance of childcare subsidies this year, China Securities Daily reported, citing Ministry of Finance officials. The fund will assist local governments in issuing the subsidies, covering nearly 90% of the total distributed amount, the newspaper said. The announcement follows the recent introduction of a nationwide childcare subsidy program, which allocates CNY3,600 per year for each child under the age of three and is expected to benefit more than 20 million families each year.

Authorities are soliciting public opinions on new plans to guide and evaluate government investment funds, aiming to better leverage their role in serving national strategies, boosting industrial upgrading, the National Development and Reform Commission has announced. The plan emphasises the need to maintain differentiated investment focus between national and local funds, while strengthening coordination to attract more social capital. (Source: Xinhua)

China is open to rebalancing economic and trade relations with the U.S. through equal dialogue, while resolutely defending its own interest, according to a commentary by the People’s Daily. The two countries have extensive common interests and broad space for cooperation, as American enterprises benefit from China’s manufacturing base and national strategies to boost domestic demand and expand imports, the newspaper said. The U.S. should reduce restrictions on two-way exchanges between enterprises and create a good environment for cooperation, the newspaper said.