China Fines 79 Banks and Deems Internet Telephony Providers Illegal

Chandrasekhar Atreya
30 Dec, 2010
New York City

Hong Kong

[R]5:00 PM Hong Kong, China – Hong Kong’s benchmark index edged closer to 23,000, while mainland indexes stayed nearly unchanged. China fines several banks for facilitating hot money inflow into the country. China’s manufacturing growth slows in December.[/R]

Stocks in Shanghai snapped its one day rally in the morning session but gained to edge into marginal positive territory.

The Shanghai Composite Index added 0.29% or 8.05 to 2,759.57 and the CSI 300 Index gained 0.07% or 2.27 to 3,064.10.

The Hang Seng Index in Hong Kong gained 0.13% or 30.04 to 22,999.34.

Chinese foreign exchange authority said Wednesday it ordered 16 banks including ICBC and Agricultural Bank of China to pay fines and in some cases suspend operations for their involvement in speculative money inflows.

Covering 79 branches in all, the penalties are seen as a show of force against hot money inflow through fictitious trade deals and other dodges, leading to inflation and sky-high real estate prices.

China’s manufacturing growth slowed for the first time in five months in December as the government tightened monetary policy besides setting energy-efficiency and pollution targets, a survey showed.

The purchasing managers’ index assessed by the survey by HSBC Holdings and Markit Economics and released today, dropped to 54.4 in December from 55.3 in November.

Full year export quotas for rare earths in 2011 have not yet been decided, the Ministry of Commerce said Wednesday.

“We will take into account China’s rare earth production, domestic and overseas demand, as well as factors such as sustainable development when setting full year export quotas,” the ministry said.

The Chinese regulator declared Internet phone services other than those provided by the China Telecom and China Unicom are illegal, which is expected to make services like Skype unavailable in the country.

The Ministry of Industry and Information Technology said all VoIP phone services are illegal on the Chinese mainland, except those provided by telecommunications carriers China Telecom and China Unicom. The ministry gave no timetable on when the ruling takes effect.

Mainland China led the global market for initial public offerings in 2010 as 349 companies debuted and raised nearly 490 billion yuan, both records, industry data showed.

The money raised by large IPO sales on both Shanghai and Shenzhen markets totaled 487.92 billion yuan in 2010, surpassing the previous record of 447.3 billion yuan set in 2007. The total number of shares issued by the offerings also surpassed the record 41.37 billion set in 2007 by reaching 58.04 billion this year, the record showed.

China’s software industry revenue surged 30.7% to 117.8 billion yuan in November from a year ago month, the Ministry of Industry and Information Technology said Wednesday.

The November revenue took the total in the first 11 months of 2010 to 1.21 trillion yuan, up 30% over the same period of 2009.

Stock Movers

Jiangxi Copper Co’s shares climbed 3.5% to 41.99 yuan after copper prices rose in London. Yunnan Copper Industry Co gained 4.8% to 25 yuan.

Industrial and Commercial Bank of China advanced 3.21% to 4.24 yuan contributing to more than half the gains in Shanghai Composite Index today.

SAIC Motor Corp declined 2.4% to 14.41 yuan while FAW Car Co fell 1.4% to 15.65 yuan.

A gauge of property developers fell in the Shanghai gauge with China Vanke Co dropping 1.29% to 8.19 yuan. Poly Real Estate Group Co declined 2.9% to 12.50 yuan.