hi everyone. i’m stephanie li.
coming up on today’s program.
china's central bank will step up policy support for economy, and liquidity is more than “reasonably ample”;
the cabinet called for efforts to stabilise the job market.
here’s what you need to know about china in the past 24 hours
china will keep monetary conditions accommodative and guide market lending rates even lower to solidify the country's economic recovery, officials said at a wednesday press conference on financial statistics in the first half of the year.
zou lan, head of the monetary policy department at the people's bank of china (pboc), said the central bank will make reasonable use of policy tools and further encourage financial institutions to reduce corporate financing costs, and will continue to formulate monetary policy mainly based on domestic factors.
in answer to a question on whether the central bank will continue to cut interest rates or the reserve requirement ratio for banks, zou responded that the 7-day reverse repurchase rate is around 1.6 percent, lower than the cost of short-term policy loans the pboc provides via its daily open market operations, while the rate on the 7-day loans for lenders is currently at 2.1 percent. “that suggests liquidity has stayed slightly more than reasonably ample,” zou said.
the chinese economy has recovered with marginal improvements in major economic indicators, the official noted, yet the foundation of the recovery remains shaky, thus the central bank will deepen market-based reforms on interest rates to translate lower deposit rates into reductions in lending rates, helping market entities to benefit more from eased financing burdens.
in april, the pboc guided banks to form a market-based adjustment mechanism for deposit rates. thanks to the mechanism, the weighted average interest rate of new deposits dropped to about 2.32 percent in june, down 0.12 percentage point from april.
meanwhile, the average interest rate of corporate loans came in at 4.32 percent during the january-june period, down 0.31 percentage point year-on-year, hitting a record low, official data showed.
the pboc is also keeping a close eye on domestic inflation as well as shifts of monetary policies in major economies, zou said. the central bank has taken preemptive measures to offset the impact of changes in the external environment on cross-border capital flows, he added.
separately, sun tianqi, head of the pboc’s financial stability bureau, said a recent evaluation by the central bank found 316 high-risk lenders, including some rural banks in henan province involved in a financial scam. assets of the risky banks account for just 1 percent of the sector’s total, meaning the vast majority of chinese lenders are safe, he said.
china will introduce stronger policy steps to boost job creation in an effort to stabilize overall employment, according to a decision made at the state council's executive meeting chaired by premier li keqiang on wednesday. the meeting called for continuing to ensure stable employment by supporting market entities, and business startups will be supported in order to boost employment. efforts related to the employment of key groups such as college graduates and migrant workers will be intensified, and employment discrimination against recovered covid patients should be strictly prohibited.
greater bay area, greater future
the extension of the hengqin line, a 2.2-kilometre cross-border light railway transport route which connects the macao sar and the neighboring guangdong-macao cooperation zone on hengqin island, started construction on wednesday.
travellers to hong kong could be allowed to skip covid-19 quarantine with certain conditions attached by november, according to the city's health chief on tuesday. instead of quarantine, visitors would be placed under medical observation and possibly barred from high-risk activities, such as going to bars, and they would still have to take nucleic acid tests.
next on industry and company news
china is expected to have nine of the world's top 20 container ports by the end of this year, according to a forecasting report released by the chinese academy of science on tuesday. among the top 20 ports, the shanghai port will have the most throughput capacity in 2022.
china's postal industry reported stable growth in business revenue in the first half of this year, data from the state post bureau showed on wednesday. during the period, the revenue of the postal sector totaled 654.31 billion yuan, up 6.5 percent year on year. and their business revenue amounted to 498.22 billion yuan, an increase of 2.9 percent.
kingsoft office software has blocked access to a link on its wps office suite that was allegedly used to share illegal documents online, the chinese software developer said wednesday, in response to rumours that it is deleting users’ files. kingsoft protects customer privacy, but the firm will check online documents shared through its cloud service as required by cyber security authorities, the firm said.
xpeng robotics, an affiliate of chinese electric carmaker xpeng motors, has raised more than $100 million on tuesday, the most in two years for a chinese company in the field. idg capital was one of the leading investors in the series a fundraiser, with xpeng and other existing shareholders chipping in, the guangzhou-based automaker said on its website tuesday.
switching gears to financial news
global investors will increase their holdings of chinese assets in the second half of 2022, as the world's second-largest economy is expected to recover, according to a report released by standard chartered on wednesday. the report also advised on taking higher stakes in chinese a shares and china-related stocks in overseas markets to hedge against the risk of an economic slowdown in europe and the us.
the number of foreign bonds issued by chinese real estate companies in the first half plummeted 91.1 percent from the same period last year, data from the china index academy showed wednesday. chinese developers raised 16.9 billion yuan from the sale of offshore bonds in the period. and the total raised from non-bank financial institutions slumped 56.5 percent year on year to 482.5 billion yuan.
the beijing stock exchange has issued its first penalty to yunnan biovalley pharmaceutical, its related personnel, and its sponsor institutions for illegal appropriation of funds. biovalley pharma has issues of capital appropriation by major shareholders and information disclosure violations, the bourse said on tuesday.
wrapping up with a quick look at the stock market
chinese stocks climbed on thursday, as tech shares offset weak performances in banking and real estate sub-indexes following cues that jitters in the property sector are spilling over into the financial system. by the close, the benchmark shanghai composite closed almost flat and the shenzhen component edged up 0.75 percent. hong kong’s hang seng index retreated 0.23 percent and the tech index rose 0.89 percent.
biz word of the day
liquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price. the most liquid asset of all is cash itself.
executive editor: sonia yu
editor: li yanxia
host: stephanie li
writer: stephanie li, zeng libin, jia yuxiao
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