MNI China Daily Summary: Wednesday, January 14

EXCLUSIVE: Authorities in China are expected to assess the need for substantial property market stimulus after Q1, following recent signals in high-level government reports, although local governments are likely to remain constrained by funding gaps and potential spillover effects on surrounding cities, advisors and analysts told MNI.

DATA: China's exports registered a 6.6% increase in December, while imports rose 5.7%, data released by China Customs showed.

DATA: China imported 55.97 million metric tonnes of crude oil in December, up from 50.89 mmt in November, as total inbound shipments finished the year up 4.4% y/y, data from the General Administration of Customs showed.

LIQUIDITY: The PBOC conducted CNY240.8 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY212.2 billion after offsetting the maturities of CNY28.6 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.5668% from 1.5474%, Wind Information showed. The overnight repo average increased to 1.3920% from 1.3913%.

YUAN: The currency strengthened to 6.9734 to the dollar from 6.9765 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.0120, compared with 7.0103 set on Tuesday. The fixing was estimated at 6.9816 by a Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8530%, down from Tuesday's close of 1.8550%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 0.31% to 4,126.09, while the CSI300 index declined 0.40% to 4,741.93. The Hang Seng Index increased 0.56% to 26,999.81.

PRESS: China’s university-age population is expected to peak in 2032, after which the vast majority of higher education institutions are likely to face significant pressure, with some closures, according to a report by the MyCOS Research Institute. By 2039, the future student base is projected to shrink by at least 41%. Data from the National Statistical Bulletin on the Development of Education show that in 2024, China had approximately 18.8 million full-time teachers, a decline of 66,800 from 2023. Shifts in population structure and the contraction in kindergarten and primary school teaching staff have already had a noticeable impact on teacher-training institutions. In response, many of these universities have begun adapting through mergers, name changes and institutional upgrades to strengthen their brand positioning and diversify their courses. (Source: Yicai)

A new wave of energy transition, digital expansion and infrastructure upgrades has sustained demand for certain industrial raw materials, including silver, said Cheng Shi, chief economist at ICBC. Cheng noted that silver prices often reflect shifts in both new-energy-related demand and traditional industrial demand, such as that from the real-estate sector, resulting in price movements with overlapping effects of multiple end-use markets, making it difficult for silver to follow a single industrial cycle or pricing logic. Energy prices have become highly sensitive to geopolitical developments, investment patterns and policy expectations. Fluctuations in energy costs ripple through industrial supply chains, affecting metals, chemicals and other sectors, and amplifying price volatility across the broader commodity system. (Source: Yicai)

Regulators have reportedly issued guidance to allow housing projects already included on the government’s financing “whitelist” to obtain loan extensions from their original lending bank, provided they meet certain conditions and standards, according to Yicai. Previously, extension periods were strictly constrained by the original loan tenor. Industry insiders say the policy aims to give qualified but temporarily distressed high-quality projects a window to recover in a sluggish market, while balancing the goals of ensuring project delivery and containing financial risks. Despite the more accommodative policy tone, sufficient collateral remains the core prerequisite for projects seeking extensions or entry onto the “whitelist.” (Source: Yicai)