MNI China Daily Summary: Tuesday, July 8

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY69 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY62 billion after offsetting the maturity of CNY131 reverse repo today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4635% from the previous 1.4660%, Wind Information showed. The overnight repo average increased to 1.3147% from 1.3146%.

YUAN: The currency strengthened to 7.1732 against the dollar from the previous 7.1747. The PBOC set the dollar-yuan central parity rate higher at 7.1534, compared with 7.1506 set on Monday. The fixing was estimated at 7.1796 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.5950%, up from 1.5800% at previous close, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index was up 0.70% to 3,497.48, while the CSI300 index rallied 0.84% to 3,998.45. The Hang Seng Index increased 1.09% at 24,148.07.

FROM THE PRESS: The Shanghai and Shenzhen stock exchanges will release new indexes to reflect the performance of specialised and innovative enterprises as defined by the Ministry of Industry and Information Technology, and help guide funds to these SMEs, Securities Times reported. The indexes will be released on July 21, the newspaper said.

Provincial governments need forward planning to address the development goals and construction tasks of high-power charging facilities for electric vehicles, according to a document by the National Development and Reform Commission. Authorities should first transform charging facilities with a utilisation rate exceeding 40% during major holidays into high-power units and aim to have more than 100,000 high-power charging facilities nationwide by the end of 2027, the document said. (Source: 21st Century Business Herald)

China’s reserve assets accounted for just 33.0% of its external financial assets by the end of Q1 2025, the lowest on record, according to Guan Tao, former senior official at the State Administration of Foreign Exchange (SAFE). Down from an historic high of 71% in Q2 2011, the decline reflects over a decade of two-way financial opening and a rising private-sector role in overseas asset allocation. If this momentum continues, 2025 could mark China’s emergence as a mature net creditor nation. However, policymakers must stay alert to risks from a sharper-than-expected drop in the trade surplus or heightened yuan volatility.