Next Week in China: 20-24 April 2026

Major Data Releases:

• 20 April: China to announce April 1-year and 5-year loan prime rates (LPR)
• 23 April: Hong Kong to report March consumer price index (CPI)
• 23 April: Taiwan to report February employment and unemployment statistics
• 23 April: China to conduct 7-day reverse repo operations
• 24 April: Macau to report March CPI

It is going to be a relatively quiet week for Mainland China in terms of major economic data releases, with the LPR fixing and routine open market operations the key items on the policy calendar.

For the April rate-setting, we expect both the one-year and five-year interest rates to remain unchanged. As of 20 March, the one-year LPR stands at 3 per cent and the five-year LPR at 3.5 per cent, with both rates having been held steady for 10 consecutive months. This stability reflects two main considerations. First, the pricing anchor for LPR – the central bank’s seven-day reverse repo rate – has remained unchanged since March, offering little impetus for an adjustment. Second, banks currently have little to gain from further compressing LPR spreads amid ongoing net interest margin pressures. From a broader macro perspective, economic activity has remained broadly stable year-to-date, with external trade and high-frequency indicators outperforming expectations.

In January, the People’s Bank of China introduced a package of monetary and financial support measures, including a 25-basis-point rate cut on certain policy tools. In the near term, there appears to be limited urgency to adjust either the policy rate or the LPR. However, should downside risks re-emerge or external conditions deteriorate, further policy easing – potentially starting with reserve requirement ratio cuts – cannot be ruled out. Overall, any LPR adjustment this year is likely to be modest, in the range of 5-10 basis points.

On the liquidity front, RMB 500 million (USD 73.3 million) in seven-day reverse repos are set to mature on 23 April, and we expect the operation rate to remain unchanged at 1.4 per cent. Given RMB 600 billion (USD 88 billion) worth of six-month outright reverse repos maturing this month, this implies a net rollover shortfall of approximately RMB 100 billion (USD 14.7 billion) for the month. Recent liquidity withdrawals appear aimed at smoothing out short-term funding conditions and preventing an excessive decline in key market rates, rather than signalling a shift away from an accommodative policy stance. Looking ahead, once market rates move back toward the policy corridor, outright reverse repo operations could return to net liquidity injections, providing flexibility for further government bond issuances and reinforce the supportive monetary backdrop.

Equity market momentum remained strong over the past week. As of Thursday, 16 April, the MSCI China Index had gained 3.29 per cent, while the Shanghai Composite rose by 1.74 per cent. The Shenzhen Component and ChiNext indices outperformed, increasing by 3.4 per cent and 5.15 per cent, respectively. Small- and mid-cap stocks continued to outperform large caps, with growth styles leading value peers.

Looking ahead, market sentiment remains sensitive to geopolitical developments, particularly the ongoing US-Iran conflict. While higher oil prices have revived inflation concerns, the current episode is more likely to represent a temporary inflationary disturbance rather than a return to 1970s-style stagflation. Much will depend on the persistence of energy supply disruptions. Overall, China markets are expected to remain on a gradual “slow bull” trajectory, supported by ample liquidity, limited alternative assets, continued policy support, and ongoing economic restructuring. As earnings season progresses through April, near-term volatility may rise particularly in the latter half of the month. Nonetheless, with corporate earnings showing modest improvement, especially in technology and cyclical sectors, selected growth and resource-related stocks could offer rebound potential should risk sentiment stabilize.

This piece has been co-produced with Yiyi Capital Limited in Hong Kong, a China specialist and a part of a global financial services group.