MNI China Daily Summary: Wednesday, October 22

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY138.2 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY94.7 billion after offsetting maturities of CNY43.5 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4327% from 1.4433%, Wind Information showed. The overnight repo average increased to 1.3167% from 1.3141%.

YUAN: The currency weakened to 7.1245 to the dollar from 7.1171 on Tuesday. The PBOC set the dollar-yuan central parity rate higher at 7.0954, compared with 7.0930 set on Tuesday. The fixing was estimated at 7.1251 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8280%, down from Tuesday's close of 1.8399%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index was down 0.07% to 3,913.76, while the CSI300 index fell 0.33% to 4,592.57. The Hang Seng Index lost 0.94% at 25,781.77.

FROM THE PRESS: China’s Minister of Commerce Wang Wentao told European Commissioner for Trade and Economic Security Maros Sefcovic that China remains committed to safeguarding the security and stability of global supply chains and has consistently facilitated the rare earth approval processes for EU enterprises, according to a statement on the ministry's website. During a video conference between the two officials, Wang reiterated China’s firm opposition to the broadening of the concept of “national security” in relation to the Nexperia case in The Netherlands. Both sides agreed to convene a session of the China-EU Export Control Dialogue Mechanism in Brussels as soon as possible.

U.S. President Donald Trump’s renewed tariff offensive could trigger volatility in China’s A-share market which present a strategic entry point for long-term investors, according to Wu Zhaoyin, chief investment officer at Soochow Futures. Earlier this year, officials introduced the Implementation Plan on Promoting the Entry of Medium- and Long-term Funds into the Market aimed at improving the investment ecosystem and encouraging long-term, value-driven, and rational investment. Investors should clearly differentiate between short-term market pressures and long-term structural opportunities, he said.

China should introduce new Qualified Foreign Limited Partner (QFLP) regulation given that the mechanism now extends to mezzanine financing, distressed assets and real estate, according to Zhao Bingyin, equity partner at Zhong Lun (Shanghai) Law Firm. Speaking at a Lujiazui Financial Salon focused on deepening QFLP pilot reforms in Shanghai, Zhao said regulators should ease entry requirements for traditional equity investment while maintaining higher thresholds for asset-heavy sectors such as infrastructure and non-performing loans (NPLs). He also called for better alignment between QFLP and emerging initiatives, including real estate private funds and asset securitisation pilots. These improvements, Zhao added, would help ensure that Shanghai remains at the forefront of QFLP innovation nationwide.