Sustained Direct Investments in China

Chandrasekhar Atreya
15 Sep, 2010
New York City

Stocks in China fell but in Hong Kong gained marginally. Foreign direct investment in China surged 18% to $66 billion. Exchange of new car for old program lifted auto sales in the first eight months.

[R]5:00 PM Hong Kong, China – Stocks in China fell but in Hong Kong gained marginally. Foreign direct investment in China surged 18% to $66 billion. Exchange of new car for old program lifted auto sales in the first eight months.[/R]

China stocks traded lower after three consecutive days of gains on concern that the government may raise interest rate to curb high inflation and Hong Kong inflation increased fractionally.

The CSI 300 Index in China lost 1.75% or 51.81 to close at 2,913.19. The Hang Seng Index in Hong Kong gained 0.14% or 29.60 to close at 21,725.64.

Foreign direct investment climbed for the thirteenth month in a row in August, according to data released by a government body.

Investment rose by 1.4% in August from a year earlier to $7.6 billion, the Ministry of Commerce said in Beijing Wednesday. Investment in the first eight months of the year expanded 18.1% to $65.96 billion, the ministry said.

China was the second-largest recipient of FDI last year with $95 billion, a place trailing the U.S with $130 billion, the United Nations agency said in a report in July.

Export Import Bank of China will sell yuan-denominated bonds in the fourth quarter of this year, Vice President Zhu Xinqiang said in Beijing today.

Tokyo-based Lawson Inc, Japan’s second-largest convenience store operator, plans to open 130 outlets in China next year to capture some of the increased spending as rising disposable incomes rise in the country.

“Lawson will boost capital spending by as much as five times to $50 million next year to add stores in the Chinese cities of Chongqing and Shanghai and may also enter Beijing Dalian, Chengdu and Shenyang, President and CEO Takeshi Niinami said in an interview in Tianjin Tuesday.

SHUI On Land, controlled by Hong Kong tycoon Vincent Lo, plans to expand its innovation community in the northeast of Shanghai by up to 1 million square meters within three years, the company said Tuesday.

A China-developed device that turns an iPod Touch into an iPhone is set to officially debut in China and is being readied to enter the U.S. market, Shanghai daily reported Tuesday.

The Apple Peel 520 is already in large-scale production and more than 40 of these models are in beta tests on domestic Web sites and by individual users, according to its maker Yosion.

Listed Chinese companies in heavily polluting industries are required to inform investors of environmental accidents, the Ministry of Environmental Protection announced in a statement Tuesday.

China’s old-for-new car scheme is gaining momentum after the authorities raised the subsidy levels at the beginning of this year, the Ministry of Commerce said Tuesday.

In the first eight months of the year, a total of 210,000 vehicles were sold under the program, nearly sevenfold jump from last year, the ministry said in a statement on its Web site.

JS Group Corp said Wednesday it has signed a basic agreement with Chinese electronic company Haier & Co to form a joint venture to sell construction materials in China by the year end.

“We can offer high-quality and reasonable priced products using Haier’s customer and service networks,” said JS Group Chairman Yoichiro Ushioda at a press conference in Tokyo.

It would be a good result for China’s economy if the country were to achieve economic growth of around 10% with around 3% rise in consumer prices in 2010, Statistics chief said in Tianjin Wednesday.

Ma Jiantang, Director of the National Bureau of Statistics made these remarks at the ongoing World Economic Forum Annual Meeting of New Champions in Tianjin.

Shanghai showed more signs of a cooling economy in August, with investment down, industrial output slowing and less retail sales growth. But the consumer prices that measures inflation softened, a good sign when the national index continued to soar.

The surplus of Chinese banks’ foreign exchange in retail transactions totaled $27 billion in July, according to data released by the State Administration of Foreign Exchange Tuesday.

In July, China’s institutional and individual clients sold $114.2 billion of foreign exchange to banks while purchases by clients from banks were $87.6 billion, yielding a surplus of $26.6 billion, the SAFE said in a statement on its Web site.

Shanghai Movers

Home builders declined on the worries that a rise in interest rate may dampen home sales.

Gemdale, China’s fourth-largest developer by market value slipped 1.3% to 6.29 yuan and Poly Real Estate retreated 0.4% to 11.35 yuan.

The country’s real estate developers are facing rising cash flow and financing pressure, the People’s Daily reported Wednesday, citing Ba Shusong, Deputy Head of the financial institute of the State Council’s Development Research Center.