MNI China Daily Summary: Friday, March 28

EXCLUSIVE: The People’s Bank of China (PBOC) and the U.S Treasury are continuing to communicate on green-finance development despite the uncertainty created amid President Donald Trump's second term, former Governor Yi Gang told MNI.

EXCLUSIVE: China’s bid to use more scrap steel could reduce iron-ore consumption by a greater magnitude than new import volumes expected from high purity Guinean mines set to open later this year, advisors and analysts told MNI.

POLICY: China’s steel exports are projected to decline by 10-15% in April due to weak order intake, according to analysts at Shanghai Metals Market.

LIQUIDITY: The PBOC conducted CNY78.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY14.5 billion after offsetting the maturity of CNY93 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.0513% from 2.0933% previously, Wind Information showed. The overnight repo average decreased to 1.7197% from the previous 1.7241%. 

YUAN: The currency strengthened to 7.2637 against the dollar from the previous 7.2655. The PBOC set the dollar-yuan central parity rate lower at 7.1752, compared with 7.1763 set on Thursday. The fixing was estimated at 7.2639 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8075%, up from the previous close of 1.8050%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 0.67% to 3,351.31, while the CSI300 index decreased 0.44% to 3,915.17. The Hang Seng Index edged down 0.65% to 23,426.60.

FROM THE PRESS: China’s industrial profits fell 0.3% y/y during January and February, improving from the 3.3% decline for the whole of 2024, Securities Daily reported. Mining industry profits declined 25.2% y/y, while manufacturing and the electricity, heat, gas and water sector rose 4.8% and 13.5% y/y. Yu Weining, a statistician at the National Bureau of Statistics, said the decline in profits narrowed and the efficiency of firms recovered stably. CITIC Securities said weak prices are restricting the recovery of corporate profits.

China's 51.4% y/y growth in domestic excavator sales during January and February reflects a shift toward more diverse applications, in contrast to prior cycles driven by the real-estate and infrastructure sectors, according to Zhou Ershuang, a researcher at Dongwu Securities. Robust demand from the Global South contributed to a 12.7% y/y increase in exports, reaching 7,630 units in February. Zhou also noted a narrowing of the decline in European and American markets. (Source: People’s Daily)

The Ministry of Commerce will continue communicating with enterprises from various countries and guarantee a good service via roundtable meetings, said MOFCOM spokesperson He Yadong. China’s economic resilience, and high-level opening-up amid global uncertainty and efforts to improve the business environment will attract foreign investment, MOFCOM officials told global heads of more than 20 multinational companies in recent meetings. (Source: 21st Century Business Herald)