MNI China Daily Summary: Wednesday, September 17

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY418.5 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY114.5 billion after offsetting maturities of CNY304 billion today, according to Wind Information. 

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.5404% from 1.4978%, Wind Information showed. The overnight repo average increased to 1.4867% from 1.4424%.

YUAN: The currency strengthened to 7.1056 to the dollar from 7.1163 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.1013, compared with 7.1027 set on Tuesday. The fixing was estimated at 7.1027 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8525%, up from Tuesday's close of 1.8500%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.37% to 3,876.34, while the CSI300 index rose 0.61% to 4,551.02. The Hang Seng Index rallied 1.78% at 26,908.39.

FROM THE PRESS: Residents will be able to accumulate hukou eligibility years across different cities in certain mega clusters under the State Council’s pilot program on market-based allocation of production factors, Yicai has learnt. Li Changan, a researcher at the National Institute of Opening-up, stated that the cumulative recognition of hukou eligibility years will significantly ease settlement thresholds in major urban centers.

China will enhance the management of ultra-long-term special government bonds, improve coordination with government investment funds and strengthen repayment mechanisms, according to a report from the National People’s Congress. The report noted that oversight of debt resolution funds remains insufficient, with some localities continuing to accumulate hidden debt or resorting to false debt swaps to obscure their true liabilities.

Authorities are placing greater emphasis on service consumption than in the past, according to Su Jian, professor at the School of Economics at Peking University, who cited the Ministry of Commerce’s recent 19-point plan to boost the sector. The measures cover a broad range of industries while also prioritising enhanced financial support, including “providing interest subsidies for service industry operators and promoting lower financing costs for businesses.” Such initiatives, Su noted, are expected to help stimulate the vitality of the service consumption market.