China Economic Growth Rate Revised Higher; Auto Sales Surge

Chandrasekhar Atreya
08 Dec, 2010
New York City

China indexes lose nearly 1% as investors brace for tighter lending and property tax trials. Asian Development Bank expects GDP to expand at 10.1% in 2010 after revising its September estimate. Auto sales in November surge to a record 1.28 million vehicles.

[R]5:00 PM Hong Kong, China – China indexes lose nearly 1% as investors brace for tighter lending and property tax trials. Asian Development Bank expects GDP to expand at 10.1% in 2010 after revising its September estimate. Auto sales in November surge to a record 1.28 million vehicles.[/R]

The decline in benchmark indexes were contained after the ADB and a private think take lifted their GDP outlook for the current year and 2011.

The Shanghai Composite Index lost 0.95% or 27.32 to close at 2,848.55. The CSI 300 Index also fell 0.89% or 28.46 to close at 3,171.88.

The Asian Development Bank revised its forecast of China’s economic growth this year to 10.1% from its September estimate of 9.6%.

China’s faster-than-expected economic expansion will help East Asia to grow 8.8% this year, up from a previous estimate of 8.4%, the ADB said in its latest edition of Asia Economic Monitor released on Tuesday.

Chinese Academy of Social Sciences, a think tank in its annual report released on Tuesday expected the nation’s economy to expand 9.9% this year and 10% in 2011.

The report also said the nation has shifted more to an economy driven by domestic demand since 2008 but at the same time the country relied more on investment to power the growth.

Shanghai was ranked second in the Asia-Pacific region for property investment and third for 2011 real estate development, according to a joint industry survey.

By investment rating, Shanghai followed Singapore and is trailed by Mumbai, Hong Kong and New Delhi, according to a joint report released on Tuesday by Urban Land Institute and PricewaterhouseCoopers LLP.

Bright Food Group, China’s largest food and dairy firm, is said to be close to finalizing a deal to acquire vitamin retailer GNC Holdings Inc of U.S. for between $2.5 billion and $3 billion, according to the Wall Street Journal.

Chinese mainland employers indicated strongly their intention to hire more staff in the first quarter of 2011, though companies in Shanghai posted a quarterly drop on hiring expectations, according to a global employment outlook survey released on Tuesday.

The net employment outlook for Shanghai dropped 16% from the last quarter of 2010, to 23% while the figure for whole mainland market was 40%, according to a report released by Manpower, which interviewed nearly 64,000 worldwide employers, including 3,891 based in the mainland.

Passenger car sales in China rose to a record monthly high in November.

The combined sales of passenger vehicles, including sedans, sport utility vehicles and multi-purpose vehicles, soared 27% from a year ago to 1.28 million units in November, the China Passenger Car Association said on Tuesday.

China Eastern Airlines Corp expects to carry 50% more passengers in 2010 following the acquisition of Shanghai Airlines Co and World Expo.

Passenger traffic will reach 66 million in 2010, Chairman Liu Shaoyong said. The airline carried 44 million passengers in 2009.

Stock Movers

Financial stocks, real estate developers and commodity companies lost in trade today on worries about policy tightening and property tax proposals.

Industrial and Commercial Bank of China Ltd and China Construction Bank both slid more than 1.2%.

China Vanke Co and CFOCO Property Co led the declines for real estate developers after the China Securities Journal reported Shanghai will be among the first few cities to undertake property tax trials.

China Vanke fell 1.98% to 8.49 yuan while CFOCO dropped 1.81% to 6.58 yuan.

Railway companies were among the leading gainers after Vice Premier Zhang Dejiang said that government would lend more funds for high speed rail projects.

China Railway Erju Co added nearly 3% to 9.31 yuan and CSR Corp, a leading carriage builder in South China, surged 7% to 7.69 yuan.