MNI China Daily Summary: Thursday, May 29

POLICY: Beijing is "highly concerned" by the EU's starting an anti-dumping investigation on tyres imported from China, He Yongqian, the spokesperson for the Ministry of Commerce, told reporters on Thursday.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY266 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY111.5 billion after offsetting maturities of CNY154.5 billion , according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.6330% on Thursday from 1.6062% previously, Wind Information showed. The overnight repo average decreased to 1.4124% from 1.4141%.

YUAN: The currency weakened to 7.1916 against the dollar, from 7.1907 at Wednesday's close. The PBOC set the dollar-yuan central parity rate higher at 7.1907, compared with 7.1894 on Wednesday. The fixing was estimated at 7.2045 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7250%, up from Wednesday's close of 1.7000%, according to Wind Information.

STOCKS: The Shanghai Composite Index gained 0.70% to 3,363.45, while the CSI300 index rallied 0.59% to 3,858.70. The Hang Seng Index rose 1.35% to 23,573.70.

FROM THE PRESS: Several small and medium-sized banks have lowered deposit rates by more than the 10-basis-point decline in Loan Prime Rates last week, following similar moves by larger institutions, China Securities Journal reported. By end-Q1, net interest margins at large commercial, joint-stock, city commercial and rural commercial banks were 1.33%, 1.56%, 1.37%, and 1.58%, decreasing by 11, 5, 1, and 15 bp from Q4 2024, the newspaper said.

China will promote high-quality development through high-level opening up, Chinese Vice Premier He Lifeng told Morgan Stanley Co-President Dan Simkowitz at a meeting in Beijing. Authorities welcome U.S.-funded financial institutions and long-term capital to deepen mutually beneficial cooperation with China and participate in the construction of the nation’s capital market, He said. (Source: Xinhua News Agency)

China's passenger car retail sales reached 1.3 million units between May 1-25, up 16% y/y and 9% m/m, data from the China Passenger Car Association showed. New energy passenger cars sold 726,000 units, increasing 31% y/y and 11% m/m, with a market penetration rate of 53.5%. The May holiday's increase in low cost self-driving tours supported demand for private and rental cars, the association said. However, the trade war with the U.S. impacted car sales in export provinces Jiangsu and Zhejiang.