MNI China Daily Summary: Wednesday, April 16

POLICY: China’s prices have remained generally low as upward price pressure from new growth drivers remain insufficient to offset the downward trend of traditional sectors, Sheng Laiyun, spokesperson of the National Bureau of Statistics told reporters.

POLICY: The Chinese economy unexpectedly grew by 5.4% year-on-year in Q1, outperforming the market consensus of 5.2%, according to data released by the National Bureau of Statistics.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY104.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY14.4 billion after offsetting the maturities of CNY118.9 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.7176% from 1.7142%, Wind Information showed. The overnight repo average decreased to 1.6919% from 1.6975%.

YUAN: The currency weakened to 7.3179 to the dollar from the previous 7.3146. The PBOC set the dollar-yuan central parity rate higher at 7.2133, compared with 7.2096 set on Tuesday. The fixing was estimated at 7.3251 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6400%, down from the previous close of 1.6500, according to Wind Information.

STOCKS: The Shanghai Composite Index increased 0.26% to 3,276.00, while the CSI300 index gained 0.31% to 3,772.82. The Hang Seng Index fell 1.91% at 21,056.98.

FROM THE PRESS: China should promote consumption, expand domestic demand, and strengthen domestic circulation with greater effort, calmly responding to the difficulties and challenges brought about by external shocks, said Premier Li Qiang. Authorities must make full use of policies to cope with the adverse impact on foreign trade by coordinating domestic and international standards and building a platform for high-quality foreign trade products to expand domestic sales, said Li. (Source: China Securities Journal)

The People’s Bank of China will likely make good use of key strategies at critical moments to maximise policy effectiveness, as it considers the timing and intensity of easing, said China Securities Journal in a commentary. The bank is taking into consideration the impact of "reciprocal tariffs," the possibility of expansionary fiscal policies pushing up market interest rates, and potential risks in the capital market, the newspaper said. There is varied policy space given normal levels of policy interest rates, a higher-than-average reserve requirement ratio and relatively low proportion of structural tools to the bank's balance sheet, the newspaper added.

Moves by listed companies to repurchase and increase shareholdings in the past week have helped to push the benchmark Shanghai Composite Index back above 3,200, highlighting investors’ confidence and authorities’ determination to stabilise the stock market, Shanghai Securities News reported. The total scale of repurchase and increase in holdings proposed by 252 listed firms reached CNY100.55 billion during April 7-15, with the scale and speed reaching record highs in recent years, the newspaper said.