MNI China Daily Summary: Tuesday, March 14

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY29 billion of operations via 7-day reverse repos on Tuesday, with the rates unchanged at 2.00%. The operation led to a net injection of CNY26 billion after offsetting the maturity of CNY3 billion reverse repos today, according to Wind Information. The operation aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.0780% from 1.9679% on Monday, Wind Information showed. The overnight repo average rose to 1.8260% from the previous 1.6131%.

YUAN: The currency strengthened to 6.8725 against the dollar from 6.9005 on Monday. The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 6.8949 on Tuesday, compared with 6.9375 set on Monday.

BONDS: The yield on 10-year China Government Bond was last at 2.8800%, down from Monday's close of 2.8875%, according to Wind Information.

STOCKS: The Shanghai Composite Index down 0.72% to 3,245.31, while the CSI300 index dropped 0.60% to 3,984.70. The Hang Seng Index edged down 2.27% to 19,247.96.

FROM THE PRESS: China’s labour market faces pressure from structural issues such as a shortage in skilled and general workers, as well as a record number of inexperienced college graduates, according to Guan Tao, former Director at State Administration of Foreign Exchange (SAFE). Guan said an economic recovery on the back of a rebound in consumer demand should help increase employment opportunities in the service industry, but people's willingness to consume had been damaged by a tough labour market over the past few years. Guan believes GDP growth will probably exceed 5% this year.

Following Premier Li Qiang’s strong endorsement of the private sector at his first press conference held on Monday, Beijing needs to enact new reforms to secure the healthy development of the private sector, according to the 21st Century Herald. Compared with state-owned enterprises (SOE), private firms still face restrictions in terms of financing and industry access. The paper notes during this year's two sessions, many representatives called for reforms of laws and regulations for private enterprises to protect the private economy and entrepreneurs in order to boost confidence and ensure the healthy development. The government needs to improve its administrative efficiency, enhance protection of property rights, and harmonise treatment for private firms, the paper said.

China will lift remaining Covid pandemic era restrictions on issuing visas to foreigners to facilitate exchanges between Chinese and foreign personnel, according to a statement on China’s US Embassy webpage. The new measures come into effect on March 28 and will see tourist visas issued for the first time since restrictions were introduced during the pandemic. Visa-free policies to Hainan, Shanghai, and ASEAN tourist group entry into Guilin will also be restored, according to the statement.