China Current Account Surplus Declined 8%

123jump.com Staff
20 Aug, 2010
New York City

Stocks in China region dropped after Shanghai city inflation increased to 3.9% and China

[R]5:00 PM Hong Kong, China – Stocks in China region dropped after Shanghai city inflation increased to 3.9% and China’s current account surplus declined 8%. PBOC eased liquidity after it provided funds through the repurchase agreement.[/R]

China stocks fell, paring the weekly gain, after inflationary pressures and shrinking current account surplus eroded investor confidence. Stocks in Hong Kong fell on mainland markets weakness and weak economic indicators from the U.S.

The CSI 300 Index in China lost 1.9% to close at 2,898.33. The weekly gain in the benchmark index was 1.4%. The Hang Seng Index in Hong Kong lost 0.43% or 90.64 to close at 20,981.82.

Central Huijin Investment, an arm of China’s sovereign wealth fund, will issue 187.5 million in yuan-denominated bonds to further invest in the nation’s five leading banks, the China Securities Journal reported.

China’s central bank pumped 41 billion yuan into the money market this week through its open market operations, ending a four week stretch of liquidity tightening. In its open market operations yesterday, PBOC sold 11 billion yuan of three-month bills at a yield of 1.5704%.

The central bank also conducted a 70 billion yuan worth of 91-day repurchase agreement operations at a yield of 1.57%.

Consumer prices jumped 3.9% in Shanghai in July from a year earlier driven mostly by surging food costs. The city’s Consumer Price Index, the main gauge of inflation, grew quicker than the June figure of 3.2%, while the pace in the first seven months stood at 2.5%.

Food costs in July rocketed by 9.6% year-on-year.

Lenovo Group, the largest PC maker in China, said it returned to profit in the fiscal first quarter, as worldwide personal computer demand rebounded.

Lenovo said net income in the quarter ended June 30 reached $54.9 million compared with a net loss of $16.01 million a year earlier.

China’s current account surplus fell 8% year-on-year to $124.2 billion in the first half ended June 30, the State Administration of Foreign Exchange said Thursday. The current account surplus accounted for 4.9% of GDP in the first half, down 1.3 percentage points from a year ago.

The country’s current account surplus rose 30% from a year earlier to $70.5 billion in the second quarter.

India expects to become a largest business partner of China, welcoming Chinese investment in its infrastructure construction and manufacturing sectors, while hoping to export value-added technologies to China.

China’s imports from India surged 75.3% from a year earlier to $13.3 billion in the first seven months of this year, while exports to India increased 40.1% to $22.1 billion during the same period.

SHUI On Land Ltd, the developer best known for landmark Tiandi series of projects in a couple of cities in China, reported Thursday net profit more than doubled in the first six months of this year mainly due to strong property sales and increased average price.

Net income up to June 30 soared 117% to 1.557 billion yuan, the company reported Thursday. Turnover soared 134% to 3.121 billion yuan in which property sales skyrocketed 175% to 2.778 billion yuan, with average price climbing 108% to 21,200 yuan per square meter from a year ago.

Citic Securities Co and China Merchants Securities Co are investing money into their Hong Kong units as China prepares to allow more foreign investment in its stock and debt markets.

McDonald Corp’s yuan bond sale, the first by a foreign company in Hong Kong as China develops the yuan denominated bond market.

McDonald sold 200 million yuan of 3% notes due in September 2013.