China Economic Comment "China weekly: regulatory stance shift?" Song

Research evidence excerpt

China Economic Comment "China weekly: regulatory stance shift?" Song

Global Research

8 July 2026ab

China Economic Comment Economics

ChinaChina weekly: regulatory stance shift?

Yu Song

Economist

1. Officials from the SAMR (State Administration for Market Regulation) held a yu-za.song@ubs.com

+86-10-5832 8508

press meeting on 7th July. The phrase “early progress was made” was mentioned 3

times in the context of regulatory clampdown. This phrase is often used when policy Jennifer Zhong

stance is being changed. There has been a relative lack of major regulatory moves over Economist

the past two weeks. It’s still early to be sure but maybe we are passing though a period S1460516050002

jennifer-a.zhong@ubs.com

of heightened regulatory tightening.

+86-105-832 8324

Grace Wang

2. PBOC Governor Pan announced a number of measures to support HK’s

financial markets. The most significant comment, in our view, was the decision to raise S1460524050003

the share of HK assets in foreign reserve in the future. grace-zc.wang@ubs.com

+86-105-832 8335

We believe these two developments above are positives for Chinese assets in HK William Deng

markets. Economist

william-w.deng@ubs.com

+852-2971 6765

The PBOC announced reserve data which showed a rise in gold reserve. There

seems to a tendency to buy more gold when the price is down and vice versa.

The PBOC has been guiding 7 day repo down in the last week of June. Helped

further by fading seasonal liquidity demand, DR007 has moved down to a level broadly

comparable to that in late May, below the operation rate of 1.4%. But the level is still

higher than the trough level in early April- mid May. It makes sense to adjust the rate

down further given the weakness in activity and credit growth, but as a forecast it is not