China Estimates FDI to Increase 11% to $100 Billion

Chandrasekhar Atreya
23 Dec, 2010
New York City

Shanghai stocks dropped for a second day on year end liquidity worries. China agrees to buy Portuguese bonds in 2011. CNPC confirms the second phase of Kazakh-China gas pipeline construction. Foreign direct investment in China is expected to reach $100 billion this year.

[R]4:30 PM Hong Kong, China – Shanghai stocks dropped for a second day on year end liquidity worries. China agrees to buy Portuguese bonds in 2011. CNPC confirms the second phase of Kazakh-China gas pipeline construction. Foreign direct investment in China is expected to reach $100 billion in 2011.[/R]

China’s key indexes dropped for the second day on liquidity concerns at year end led by brokerages and carmakers while metal producers gained moderately. Hong Kong index also closed lower.

The Shanghai Composite Index dipped 0.79% or 22.68 points to close at 2,855.22. The CSI 300 Index also fell 0.83% to close at 3,188.61, down by 26.85 points.

The Hang Seng Index in Hong Kong lost 0.66% or 152.91 to close at 22,892.28.

China’s Ministry of Commerce said today it will start an anti-dumping inquiry into imported photographic paper and paper board made in the European Union, the U.S. and Japan. It said it will look for any evidence to prove dumping occurred between July 2009 and June 2010.

China unveiled on Wednesday a new asset management company that aims to restructure and merge small, non-competitive state-owned enterprises.

China Reform Holdings Corp Ltd, will focus on reorganizing small sized SOE’s which do not affect national security and are not crucial to the national economy, the State-Owned Assets Supervision and Administration Commission said in a statement.

China has agreed to buy 4 billion to 5 billion euros of Portuguese sovereign debt as the nation looks to avert seeking a bailout from the EU, the Jornal de Negocios daily reported on Wednesday.

The paper said that a deal reached between the two governments will lead to China buying the debt in auctions or in the secondary markets in the first quarter of 2011.

Shanghai plans to build more affordable homes next year as the city increases its efforts to improve the living standards of middle to low income households.

The city will see affordable housing totaling 15 million square meters built in the year 2011, up 25% from a year ago, Liu Haisheng, Director of the Shanghai Housing Support and Building Administration Bureau, told a municipal conference on Wednesday.

The China National Petroleum Corp confirmed on Wednesday that construction for the second phase of the China-Kazakhstan gas pipeline has started in Kazakhstan.

The second phase of the pipeline, from Beyneu to Shymkent, which has a length of 1,475 kilometers and a designed annual capacity of 10 billion cubic meters, has started, said CNPC, the leading operator of this project.

China’s foreign trade is expected to surge more than 30% from 2009 to reach $2.9 trillion in 2010, making the country the top exporter of the world and the second-largest importer by the end of this year, Minister of Commerce Chen Deming said on Wednesday at a working conference in Beijing.

Foreign trade totaled $2.68 trillion in the first 11 months of the year, up 36.3% from a year ago period, according to General Administration of Customs.

Foreign direct investment in China is expected to rise 11% to $100 billion this year and its outbound investments on the international market are expected to exceed $50 billion, Minister of Commerce Chen Deming said.

Stock Movers

Brokerages declined on worries that earnings will be pared by weak performance of the stock markets with thin turnover.

Haitong Securities Co dipped 0.9% to 10.05 yuan and GF Securities Co also fell by a similar margin to 51.50 yuan. Northeast Securities dropped 1.29% to 23.34 yuan.

Metal producers were among the gainers with Jiangxi Copper Co edging up 0.5% to 41.62 yuan and Aluminum Corp of China added 0.2% to 25.20 yuan.

Car makers declined on the worries that preferential tax policy for low-emission cars maybe cancelled next year.

SAIC Motor Co, China’s largest carmaker, fell 1.01% to 16.10 yuan and FAW Car Co sank 1.3% to 23.34 yuan.

Changsha Zoomlion rose as much as 7.3% on its Hong Kong debut.