CHINA’S stocks and the yuan rose on the final trading day of 2020 on signs an economic recovery is on solid footing.

The benchmark CSI 300 Index advanced 1.91 percent and the tech-heavy ChiNext added 2.27 percent Thursday, both ending at five-year highs.

The yuan climbed to as high as 6.5148 a U.S. dollar, the strongest since June 2018.

Chinese assets have shown resilience in a year that has seen the outbreak of a virus pandemic and worsening ties between the United States and China on issues ranging from tech to trade.

China on Thursday reported that an official gauge of the country’s manufacturing industry moderated in December, signaling that the economy’s rebound is stabilizing.

“Solid economic figures and earnings in the first quarter are pretty much a given,” said Wang Yugang, a fund manager at Beijing Axe Asset Management Co.

“We are hopeful that there are gains coming based on the fact that we are still in the midst of an economic upcycle,” Wang said.

Chinese markets have gotten a boost recently from liquidity injections by the central bank.

The People’s Bank of China provided a net US$84 billion in one-year funding and US$20 billion in short-term cash to the financial system in the final five weeks of 2020 alone. That funding reined in borrowing costs after a surge in credit defaults dampened commercial lenders’ enthusiasm to extend loans.

The liquidity has also given a boost to sovereign bond investors. The yield on benchmark 10-year notes has fallen 13 basis points to 3.14 percent in December. (SD-Agencies)