China Surpasses Japan; Auto Sales Up 15%

Chandrasekhar Atreya
02 Aug, 2010
New York City

Stocks in China region rose extending the best monthly gain in one year on policy outlook. China overtakes Japan as the world

[R]5:00 PM Hong Kong, China – Stocks in China region rose extending the best monthly gain in one year on policy outlook. China overtakes Japan as the world’s second-largest economy. Survey finds business conditions stable in July. Manufacturing activity grew at a slower pace in July. Steel mills are expected to lose on the rising materials costs in the second half.[/R]

Stocks in Hong Kong and China started Monday’s session on a bright note and steadily gained during the day’s trading to close at the day’s high.

The Hang Seng Index in Hong Kong gained 1.82% or 382.98 to close at 21,412.79. The CSI 300 Index in China also gained 1.69% or 48.43 to close at 2,917.27.

China has overtaken Japan as the world’s second-largest economy on the three decades of rapid growth that has lifted hundreds of millions of people out of poverty.

China is in fact now already the world’s second largest economy, said Yi Gang, China’s chief currency regulator in an interview with China Reform magazine posted on the Web site of his agency, the State Administration of Foreign Exchange.

Business conditions for companies in China were stable in July according to a latest survey released.

Overall operating conditions for Chinese companies were rated at 64.94 this month following June’s 63.51, a sharp fall from the high of 78.46 in May, said the China Business Sentiment Survey by Market News International, a subsidiary of the Deutsche Boerse Group, a real-time news agency.

China’s manufacturing activity continued to grow at a slower pace in July as the government took measures to curb the risk of overheating to adjust the economic structure.

The official Purchasing Manager’s Index, a comprehensive gauge of industrial activity, eased 0.9% from a month earlier to 51.2% in July, the China Federation of Logistics and Purchasing said yesterday. The index has been above the 50 mark for 17 consecutive months now albeit it is down for the third month in a row.

China will stick to a relatively loose monetary policy in the second half of this year, according to the central bank officials and the central bank is expected to focus on flexibility.

China provided 56,000 hectares of land for residential use in the first six months of this year, up 135% from the same period last year, according to the Ministry of Land and Resources.

A significant increase in the availability of land for housing was reported in Guizhou Province, Jiangxi Province, Beijing, Heilongjiang Province and the Ningxia Hui Autonomous Region, the ministry said on its Web site.

The People’s Bank of China said on its Web site that it would combine its various policy tools, including open market operations and reserves, in an appropriate way to further improve the management of banking liquidity as required by Basel convention.

Passenger car sales in China grew at a faster pace in July after the government announced subsidies for fuel-efficient models thus leading to more incentives being offered by dealers to clear inventories.

Retail deliveries of cars, sports-utility vehicles and multipurpose vehicles surged 15.4% in July from a year earlier to 822,330 units, the China Automotive Technology & Research Center said in its statement today.

Global Asset Manager Carlyle Group received more than 2.4 billion yuan in commitments for its Beijing-based yuan fund and has set up an investment management venture to serve as an advisor to the fund to tap growth opportunities in China.

The fund has a target size of 5 billion yuan and is ready to make investments in large growth companies in China, the asset manager said on July 30.

China Iron & Steel Association said July 30 that many of the country’s steel producers will report losses in the second half of this year.

“As steel prices have lost ground since May and raw materials such as iron ore and coking coal keep climbing, some steel mills could not sustain production and made losses. The condition will be hard to reverse in the second half,” said Shan Shanghua, the secretary of the association.

Construction of the first phase of a nuclear plant in southern China’s Guangxi Zhuang Autonomous Region commenced yesterday July 30. The project in Guangpo Township, Fangchengang City will have six 1-million kilowatt generators, first such facility in an ethnic minority area.