MNI China Daily Summary: Wednesday, July 16

POLICY: China is launching targeted campaigns to boost consumption and create broader markets for global enterprises, while leading developing countries to participate in global industrial and supply chains, said vice premier He Lifeng, at the China International Supply Chain Expo in Beijing.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY520.1 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY444.6 billion after offsetting the maturity of CNY75.5 reverse repo today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5291% from 1.5696%, Wind Information showed. The overnight repo average decreased to 1.4689% from 1.5300%.

YUAN: The currency weakened to 7.1776 to the dollar from 7.1734 on Tuesday. The PBOC set the dollar-yuan central parity rate higher at 7.1526, compared with 7.1498 set on Tuesday. The fixing was estimated at 7.1901 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.6575%, flat from Tuesday's close, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index was down 0.03% to 3,503.78, while the CSI300 index edged down 0.30% to 4,007.20. The Hang Seng Index fell 0.29% at 24,517.76.

FROM THE PRESS: The PBOC still has room for cuts in the reserve requirement ratio and interest rates, given low inflation, stable yuan and major economies’ rate-cutting cycle, said Sheng Songcheng, dean at the China Chief Economist Forum Institute. However, the PBOC needs to observe the effects of previous measures before launching new easing, while the timeframe for monetary policy transmission could be longer than the usual 3-6 months, if there is greater economic downward pressure, said Sheng. (Source: National Business Daily)

Authorities have stepped up regulation on local asset management companies (AMCs) by establishing operational red lines to focus efforts on their core business of managing non-performing assets, 21st Century Business Herald reported, citing a new rule released Tuesday by the National Financial Regulatory Administration. The rule prohibits local AMCs from providing channels for local government financing vehicles to incur additional hidden debts, while also sets a leverage limit of three times net assets to prevent institutions from excessive debt expansion, the newspaper said.

China and Australia will jointly review their decade-old Free Trade Agreement to identify areas for improvement or expansion, while continuing to implement the existing agreement, according to a Memorandum of Understanding signed by Commerce Minister Wang Wentao and Foreign Affairs and Trade Secretary Jan Adams, Yicai.com reported. Both sides agreed to further liberalise and facilitate trade and investment and provide a higher level of institutional guarantee for economic and trade cooperation between the two countries, the newspaper said.