MNI China Daily Summary: Tuesday, September 16

POLICY: Global financial governance should be strengthened by diversifying monetary and cross-border payment systems, enhancing regulatory coordination, and increasing emerging markets’ representation in major international financial institutions, People’s Bank of China Governor Pan Gongsheng wrote in Qiushi magazine.

POLICY: Beijing will pursue a 19-point action plan aimed at boosting service consumption across five key areas, the Ministry of Commerce said.

POLICY: China’s nationwide railway fixed-asset investment totalled CNY504.1 billion from January to August, an increase of 5.6% year-on-year, faster than the 5.5% rise in H1, China State Railway Group announced.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY287 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY40 billion after offsetting maturities of CNY247 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.4978% from 1.4832%, Wind Information showed. The overnight repo average rose to 1.4424% from 1.4140%.

YUAN: The currency strengthened to 7.1163 against the dollar from the previous 7.1228. The PBOC set the dollar-yuan central parity rate lower at 7.1027, compared with 7.1056 set on Monday. The fixing was estimated at 7.1163 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8500%, down from the previous close of 1.8583%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index rose by 0.04% to 3,861.87, while the CSI300 index was down 0.21% at 4,523.34. The Hang Seng Index edged down 0.03% at 26,438.51.

FROM THE PRESS: China and the U.S. have reached a basic framework consensus on addressing TikTok-related issues through cooperative means, reducing investment barriers and advancing bilateral economic and trade cooperation, the Ministry of Commerce announced. He Lifeng, China’s lead representative for economic and trade affairs and vice premier at the State Council, emphasised that China will conduct technology export reviews in accordance with laws and regulations regarding TikTok. He expressed hope that the U.S. will lift restrictive measures against China at the earliest opportunity and take concrete actions to safeguard the hard-won outcome of the talks.

China’s manufacturing investment growth will likely slow further in H2, as fluctuations in the external trade environment weigh on domestic manufacturing, while “anti-involution” policies curb investment in industries with excess capacity, according to Wang Qing, chief macro analyst at Dongfang Jincheng. Wang projects full-year manufacturing investment growth of around 5.5%, down 3.7 percentage points from 2023. Meanwhile, consumption growth could accelerate from August's 3.4% y/y rise, the lowest level since November 2024, supported by recently introduced childcare subsidies, exemptions from preschool education fee and interest subsidies on personal consumption loans, Wu Chaoming, chief economist at Caitong Securities, told Yicai.

China will allow foreign-invested firms and investors' legally generated foreign exchange profits to be reinvested domestically, the State Administration of Foreign Exchange (SAFE) announced. The funds may be transferred into the capital account of the invested enterprise and their use must comply with relevant account management regulations, SAFE said.