MNI China Daily Summary: Wednesday, October 15

DATA: China’s Consumer Price Index fell 0.3% y/y in September, narrowing from August's 0.4% fall but missing expectations for a 0.2% drop, mainly due to the lower comparison base for the same period last year, according to data from the National Bureau of Statistics released. Producer Price Index fell 2.3% y/y in September, narrowing from August's 2.9% drop, marking the 36th straight month of decline, in line with market expectations of a 2.3% fall.

DATA: China's new yuan loans rose by CNY1.29 trillion in September, rising from August's CNY590 billion and marking a three-month high, data released by the People's Bank of China (PBOC) showed. Total social financing rose by CNY3.53 trillion, increasing from CNY2.57 trillion in August, and also reaching a high point in Q3. M2 money supply grew by 8.4% y/y, missing market forecasts of 8.5% growth and slowing from August's 8.8% gain. 

LIQUIDITY: The PBOC conducted CNY43.5 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY43.5 billion as no reverse matures today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4170% from 1.4314%, Wind Information showed. The overnight repo average decreased to 1.3138% from 1.3141%.

YUAN: The currency strengthened to 7.1238 to the dollar from 7.1411 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.0995, compared with 7.1021 set on Tuesday. The fixing was estimated at 7.1320 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8375%, up from Tuesday's close of 1.8325%, according to Wind Information.

STOCKS: The Shanghai Composite Index rallied 1.22% to 3,912.21, while the CSI300 index rose 1.48% to 4,606.29. The Hang Seng Index gained 1.84% at 25,910.60.

FROM THE PRESS: China’s decision to impose special port fees on U.S.-linked vessels, including when U.S. individuals or entities directly or indirectly hold 25% or more equity interest, marks a significant escalation given that U.S. investors hold over 25% ownership in most publicly listed shipping companies, according to Ella Liu, analyst at the Maritime Planet Institute. In the longer term, Liu said this shift could reshape the global shipping finance ecosystem prompting firms to turn to European and Asian capital markets or private funding channels and potentially triggering a wave of delisting from U.S. exchanges in favour of Europe or Asia.

China recently completed its final issuance of ultra-long-term special government bonds for 2025, bringing the total issuance for the year to CNY1.3 trillion, a CNY300 billion increase compared with 2024, according to the Ministry of Finance. The first and final tranches this year were issued on April 24 and Oct 14, about a month earlier than last year’s May 17 and Nov 15, allowing funds to be deployed more efficiently into priority sectors, said Ming Ming, chief economist at CITIC Securities. According to Securities Daily, CNY800 billion was allocated to major infrastructure and public service projects while CNY500 billion was directed on new urbanisation and the development of new productive forces.

The China Semiconductor Industry Association has issued a statement expressing its opposition to the abuse of “national security” following intervention by local authorities in the Netherlands against Nexperia, a subsidiary of Wingtech Technology, a Chinese firm. The association noted that the move had caused serious concern within the industry and affirmed that it will support its member companies in safeguarding their legitimate rights and interests.