MNI China Daily Summary: Wednesday, December 31

DATA: China's Manufacturing Purchasing Managers Index rose by 0.9 points to 50.1 in December from November, rising above the breakeven 50 mark for the first time since April, data from the National Bureau of Statistics showed.

DATA: China's RatingDog manufacturing PMI, previously known as the Caixin manufacturing PMI, came in at 50.1 in December, up from November's 49.9, rising back into the expansionary zone above the 50 mark, the publisher said.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY528.8 billion via seven-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY502.8 billion after offsetting maturities of CNY26 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.9822% from 1.6874%, Wind Information showed. The overnight repo average increased to 1.3324% from 1.2395%.

YUAN: The currency strengthened to 6.9890 to the dollar from 6.9901 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.0288, compared with 7.0348 on Tuesday. The fixing was estimated at 6.9966 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8432%, down from Tuesday's close of 1.8475%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.09% to 3,968.84, while the CSI300 index fell 0.46% to 4,629.94. The Hang Seng Index lost 0.87% at 25,630.54.

FROM THE PRESS: Beijing’s move to reduce the value-added tax on homes sold by individuals who have owned them for less than two years will help release pent-up demand for upgrades, 21st Century Business Herald reported, citing analysts. The tax rate will be lowered to 3% from the current 5%, or be exempted with more than two years of ownership, taking effect from Jan 1, 2026. The new policy will also help ease deep price cuts by property sellers due to high transaction costs, analysts said, noting that CNY40,000 can be saved when selling a CNY2 million house. 

China's banks will be required to pay interest on e-CNY held in digital wallets from Jan 1, 2026, in a move aimed at increasing public and market adoption of the digital currency, Yicai.com reported. Classified as M0, or physical currency in circulation, the digital yuan earned no interest previously, while the new policy will transform it into a deposit‑like instrument. By the end of November, it had been used in a total of 3.5 billion transactions worth more than CNY16.7 trillion, the newspaper said.

China’s banking sector held net foreign assets of USD371.6 billion by the end of September, data released on Tuesday by the State Administration of Foreign Exchange showed. The sector has USD1.81 trillion in foreign financial assets and USD1.44 trillion in foreign liabilities. Of these, net liabilities in yuan amounted to USD224.9 billion, while net assets in foreign currencies amounted to USD596.5 billion. (Source: CNR Finance)