Feb 2

China Business News: Central Bank Injects Billions Into Domestic Market

Editorial Staff
Dec 16, 2022
China business

Image: Phuong Uyen Vo Hoang via Unsplash

Welcome to China Business News, NEO’s weekly roundup of top business developments as reported by news outlets in China and the region.

This week’s highlights:

  • According to an announcement on the People’s Bank of China’s official website earlier this week, the Chinese central bank conducted a 650 billion yuan medium-term lending facility (MLF) operation and a 2 billion yuan open market reverse repo operation to meet the needs of financial institutions in order to maintain sufficient liquidity in the banking system. China’s central bank also injected 150 billion yuan using MLF, sending a signal aimed at boosting market confidence amid bond market turmoil and seasonal pressure on liquidity. (The United Morning Post)
  • Investment performance in China has failed to meet market expectations. A recent survey of 13 domestic and international institutions by Caixin Media showed that the average forecast for the cumulative year-on-year growth rate of fixed asset investment from January to November ranged from 5.4% to 5.9%. But data recently released by the Chinese National Bureau of Statistics showed that the cumulative year-on-year growth of national fixed asset investment from January to November was only 5.3%, below expert forecasts. (Caixin)
  • The growth rate of imports and exports in China dropped sharply in the first 11 months of 2022, under the influence of weakening domestic and external demand and recurrent pandemic outbreaks. China’s exports grew by a cumulative 9.1% in USD terms, while last year this growth was as high as 30.7%. Imports grew only by 2.0% cumulatively, down from 31.2% year-on-year. China’s ability to sustain its exports in the future will have a significant impact on its economic growth, amid expected interest rate hikes and overseas monentary tightetning in 2023. Experts have predicted a global recession, the contraction of production and a decline in consumption-based external demand. (The First Financial)
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