MNI China Daily Summary: Thursday, March 27

POLICY: The People’s Bank of China (PBOC) has ample policy space and will cut the reserve requirement ratio (RRR) and interest rates in a timely manner, depending on domestic and international economic, and financial conditions and market performance, said Deputy Governor Xuan Changneng at the Boao Forum For Asia Annual Conference 2025.

POLICY: The PBOC is prioritising interest-rate adjustments over quantity-based tools to enhance the effectiveness of policy as it faces unprecedented external and domestic uncertainties, said Deputy Governor Xuan Changneng at the Boao Forum For Asia Annual Conference 2025.

POLICY: China will strengthen collaboration with Asian counterparts via regional trade agreements while facing increasing global uncertainty, and will further open up its key sectors and uphold multilateralism, said Vice-Premier Ding Xuexiang at the opening ceremony of the Boao Forum For Asia Annual Conference 2025.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY218.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY50 billion after offsetting the maturity of CNY268.5 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.0933% from 1.9819% previously, Wind Information showed. The overnight repo average decreased to 1.7244% from the previous 1.7843%. 

YUAN: The currency weakened to 7.2655 against the dollar from the previous 7.2635. The PBOC set the dollar-yuan central parity rate higher at 7.1763, compared with 7.1754 set on Wednesday. The fixing was estimated at 7.2729 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8050%, down from the previous close of 1.8200%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.15% to 3,373.75, while the CSI300 index increased 0.33% to 3,932.41. The Hang Seng Index rose 0.41% to 23,578.80.

FROM THE PRESS: Hangzhou’s sixth land sale auction of the year sold for an average premium of 52%, with one plot in Binjiang District reaching a transaction floor price of CNY72,915 per square meter, a record high for 2025, Securities Daily reported. According to data from Linping Residential Research Institute, Hangzhou’s transaction volume of new commercial residential buildings reached 3,444 units from March 1 to March 23, up 145% m/m and 34% y/y.

China’s Vice Premier He Lifeng and U.S. Trade Representative Greer held candid and in-depth talks during a phone call on Wednesday regarding bilateral economic and trade issues, Xinhua news agency reported. China expressed concerns over Washington’s use of fentanyl as grounds to impose tariffs on China. The two sides said that maintaining a stable Sino-U.S. economic and trade relationship was in the interests of both countries and agreed to continue to communicate on issues of mutual concern.

China should increase the transfer of state-owned capital towards pension funds, given the expected negative worker to pensioner ratio from 2035, said Guo Shuqing, former chairman of the China Banking and Insurance Regulatory Commission, adding pension funds could enter a financial deficit by around 2045. The government needs to improve the surplus funds’ return on investment by significantly raising the proportion of professional entrusted investors and reasonably relaxing restrictions on investing scope, said Guo. (Source: International Financial News)