MNI China Daily Summary: Tuesday, July 29

POLICY: Chinese residents’ income confidence, employment expectations and willingness to consume all weakened in the second quarter, according to a People’s Bank of China survey.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY449.2 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY234.4 billion after offsetting maturities of CNY214.8 billion today, according to Wind Information

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5643% from the previous 1.5806%, Wind Information showed. The overnight repo average decreased to 1.3633% from 1.4621%.

YUAN: The currency weakened to 7.1765 against the dollar from the previous 7.1729. The PBOC set the dollar-yuan central parity rate higher at 7.1511, compared with 7.1467 set on Monday. The fixing was estimated at 7.1909 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7200%, up from the close of 1.6800% on Monday, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index was up 0.33% to 3,609.71, while the CSI300 index rallied 0.39% to 4,152.02. The Hang Seng Index decreased 0.15% at 25,524.45.

FROM THE PRESS: China’s new child care subsidy of CNY3,600 per child, up to the age of three, will require CNY101.2 billion annually, based on latest official data, Yicai.com has calculated. The plan outlines that the central government will offer proportional financial support across the eastern, central and western regions. Local governments may contribute additional funding based on their fiscal capacity, with any supplementary financial requirements to be covered by local budgets. Jiang Quanbao, professor at Capital University of Economics and Business, said other support measures are needed to boost fertility, including education, childcare services, parental leave, healthcare and housing.

China’s panda-bond market expanded rapidly in H1, driven by increased participation from foreign institutions, Securities Daily reported. In total, CNY84.4 billion of panda bonds were issued in the first half of 2025, of which CNY23.5 billion came from foreign governments and international institutions, up 161% y/y, the newspaper said. The cumulative market issuance exceeded CNY1 trillion by July 28, ranking second globally in terms of yuan-denominated international financing, a development expected to support the further internationalisation of the yuan significantly, Securities Daily noted.

China is expected to boost consumption further by removing unreasonable restrictions, optimising the consumer goods trade-in programme and diversifying supply, Yicai.com reported. The trade-in scheme should be further expanded to cover service consumption, including tourism and catering in the second half of the year, said Xiao Lisheng, researcher at the Chinese Academy of Social Sciences. Fiscal authorities should improve spending structure and increase fund efficiency to strengthen social welfare, said Luo Zhiheng, chief economist at Yuekai Securities, adding that further Reserve Requirement Ratio (RRR), interest rate and mortgage cuts were necessary.