Everything You Need to Know About China's Economy on Friday (Sept. 20)
Your Daily & Trustworthy Updates on the Chinese Economy
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Good Friday! This is TIAN in Beijing.
Welcome to monitor the pulse of China’s economy together with me.
DRIVING THE DAY, China's one-year loan prime rate (LPR), a market-based benchmark lending rate, came in at 3.35 percent Friday, unchanged from the previous month.
The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 3.85 percent, according to the National Interbank Funding Center.
The monthly-released data serves as a pricing reference rate for banks and is based on rates of the People's Bank of China (PBOC)'s open market operations.
On July 22, the central bank lowered the interest rate on seven-day reverse repos, a key short-term policy rate, from 1.8 percent to 1.7 percent. On the same day, one-year and over-five-year LPRs both fell by 10 basis points.
MEANWHILE, China and the EU engaged in a "comprehensive, in-depth, and constructive" consultation here on Thursday regarding the EU's ongoing anti-subsidy investigation into Chinese electric vehicles (EVs), according to a statement released by China's Ministry of Commerce.
During the meeting between the Chinese Minister of Commerce Wang Wentao and the European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis, both sides expressed clearly their political will to resolve differences through consultations, said the statement.
The two sides agreed to continue pushing forward negotiations on the price commitments, and spare no effort to reach a mutually acceptable solution through friendly dialogue and consultation, it added.
The European Commission initiated the anti-subsidy investigation without a formal complaint from the industries within the EU, and the rulings were "non-compliant, unreasonable, and unfair," said the ministry.
Although the Chinese side cannot agree with or accept this, it consistently maintained the utmost sincerity and made efforts to resolve the issue properly through dialogue and consultation, said the ministry.
It stressed that the Chinese industry proposed a price commitment solution during the investigation and further improved it based on the concerns of the EU, which fully demonstrated the utmost flexibility and sincerity from the Chinese side.
ALSO ON FRIDAY, A.P. Moller-Maersk (Maersk) has carried out mutually beneficial cooperation with Chinese shipping firms since the beginning of China's reform and opening up, achieving tangible results, Chinese Vice President Han Zheng told Robert Maersk Uggla, chair of the board of Maersk, in Beijing.
China and Europe, including Denmark, enjoy strong economic complementarity, providing a solid foundation for deepening economic and trade cooperation, Han added.
China will further expand high-level opening up, and foster a world-class, market-oriented business environment governed by a sound legal framework. The country welcomes enterprises from various countries, including Maersk, to deepen cooperation and achieve greater success in China, Han said.
Robert Maersk Uggla spoke highly of China's achievements in economic and social development, saying Maersk attaches great importance to cooperation with China.
Maersk is willing to further explore market opportunities in China and promote mutually beneficial cooperation in areas such as green shipping, he added.
IN TODAY'S FINANCIAL MARKET,
Shanghai Composite Index Ended Nearly Flat on Friday
China’s benchmark Shanghai Composite Index (000001.SH) closed nearly flat on Friday, while the Shenzhen Component Index (399001.SZ) fell 0.15%.
Shanghai’s tech-heavy STAR 50 Index (000688.SH) lost 0.48% for the day, while Shenzhen’s similar ChiNext Index (399006.SZ) fell 0.64%.
Chinese yuan strengthens to 7.0644 against USD Friday
The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 339 pips to 7.0644 against the U.S. dollar Friday, according to the China Foreign Exchange Trade System.
In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
China's benchmark interbank gold prices MIXED Friday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 581.94 yuan (about 82.38 U.S. dollars) per gram, 0.01 yuan lower than the previous trading day.
The price for gold that is 99.99 percent pure or above went up 1.07 yuan from the previous trading day to 583.05 yuan.
China's central bank conducts reverse repos Friday
China's central bank conducted 571.9 billion yuan (about 80.96 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.7 percent Friday.
The move aims to keep liquidity reasonable and ample in the banking system, the central bank said.
Hong Kong Hang Seng Index closes 1.36 pct higher
Hong Kong stock market ended higher Friday with the benchmark Hang Seng Index up 1.36 percent to close at 18,258.57 points.
The Hang Seng China Enterprises Index rose 1.21 percent to end at 6,381.50 points, and the Hang Seng Tech Index rose 1.43 percent to end at 3,703.84 points.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
Cotton futures closed higher Friday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for January 2025 delivery gained 375 yuan (about 53.08 U.S. dollars) to close at 14,075 yuan per tonne.
On Friday, the total trading volume for six listed cotton futures contracts on the ZCE was 532,537 lots with a turnover of 36.98 billion yuan.
Sugar futures closed higher Friday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for January 2025 delivery gained 47 yuan (6.65 U.S. dollars) to close at 5,843 yuan per tonne.
On Friday, the total trading volume for six listed sugar futures contracts on the ZCE was 460,226 lots with a turnover of 26.82 billion yuan.
Iron ore futures closed higher on Friday in daytime trading at the Dalian Commodity Exchange.
The most active iron ore contract for January 2025 delivery gained 1 yuan (about 14 U.S. cents) to close at 680 yuan per tonne.
On Friday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 733,033 lots, with a turnover of about 50.5 billion yuan.
No.1 soybean futures closed lower on Friday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for January 2025 delivery dipped 24 yuan (about 3.4 U.S. dollars) to close at 4,154 yuan per tonne.
On Friday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 103,259 lots, with a turnover of about 4.29 billion yuan.
About the Newsletter:
Ran by TIAN Dongdong, this newsletter features daily and trustworthy content on China's economy. Having worked in Brussels, London, Cairo, and Tripoli for Chinese media as correspondent for several years, TIAN is now based in Beijing.