China Targets 8% GDP, 11% Production Growths

Darlington Musarurwa
21 Dec, 2009
New York City

Chinese government is targeting at least 8% economic growth in 2010 and industrial production increase of 11% matching the rates in 2009. Rising domestic spending, government stimulus and increased bank loans are driving the economic expansion.

[R]6:00 AM New York, 6:00 PM Hong Kong – Chinese government is targeting at least 8% economic growth in 2010 and industrial production increase of 11% matching the rates in 2009. Rising domestic spending, government stimulus and increased bank loans are driving the economic expansion.[/R]

Hong Kong shares continued to fall on lingering fears Beijing will take additional measures to rein in rising property prices. Stocks in Shanghai increased after the government targeted 8% economic expansion and 11% increase in industrial production in 2010.

Financial stocks fell on concern banks might have to provision for their exposure in Dubai. Dubai World is in the midst of the loan restructuring with more than 70 banks involving $22 billion. Dubai World did not offer credit restructuring as expected today by the bankers.

In Hong Kong trading Hang Seng Index fell 1.1% or 227.70 to 20,948.10, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 1.1% or 131.65 to 12, 203.17. In Shanghai trading CSI 300 Index advanced 0.1% or 4.89 to 3,396.62.

Daily turnover on main-board dropped to HK$49.69 billion from HK$69.75 billion on Friday.

China Industrial Production, GDP Targets

Xinhua News Agency reported that Minister of Industry and Information Technology Li Yizhong said today at a two-day conference industrial production is expected to rise more than 11% and the economy to expand more than 8% in the current year.

Li also said that the government is targeting 8% expansion in 2010 and industrial production increase of 11% in the year. China has targeted 8% a year economic expansion every year since 2005 but the economy has expanded at a rate higher than that every year since then.

Li also estimated new bank loans to increase 9.8 trillion yen or $1.4 trillion.

Only 35% of Individual Investors Benefit from Stocks

Peoples Daily Online reported today a survey conducted by China Security Investor Fund showed that only 35% of China’s individual investors benefited from the A-share market in the first ten months of the year.

According to the report, though the majority of the investors have shown confidence in the share market, there are unlikely to buy stocks in the short-term.

Most individual stock investors believed that the recovery of the stock market revealed the recovery of China''s economy and 80% projected economic growth rate in 2010 will rise to 8%.

An estimated 59.48% of investors surveyed said the Shanghai Composite Index''s rally is likely to last into the coming 6 months, but only 38.10% of them were considering investing more in the stock market in the next three months.

China’s investors’ confidence has been recovering in 2009.

Hong Kong Consumer Prices Rise 0.5% in Nov

Hong Kong reported today that consumer prices jumped in November from the same period a year earlier by 0.5% but lower than projections of between 0.7% and 0.8% by several economists.

Consumer prices were increasing as the government subsidies on power and housing are on the decline.

Gainers & Losers

Financial stocks fell. HSBC dropped 1.1% to HK$86.50 and Standard Chartered tumbled 1.8% to HK$187.80.

China Construction Bank plunged 1.3%, ICBC tumbled 1.5% and China Life fell 4%.

Geely Auto fell 9.9% HK$3.56 on profit taking.

Wharf Holdings climbed down 7.4% to HK$40.85 as investors locked in gains.

Sun Hung Kai Properties lost 1.5% to HK$112 and Cheung Kong tumbled 1.1% to HK$95.

Las Vegas Sands'' Macau unit Sands China decreased 6% to HK$9.23 on fears of rising competition.

Wynn Macau advanced 1.7% to HK$9.64.

Renhe Commercial increased 1.2% after announcing it will get HK$2.16 billion from the sale of the Zhengzhou development project.

However, realty stocks rose in Shanghai on valuation. China Vanke added 1.2% to Rmb10.72. Beijing Business Today said that China is likely to increase down payment requirement for second homes to 50% from 40%.

Financial stocks in Shanghai fell. China Merchants Bank dropped 2.1% to Rmb16.82, Bank of Nanjing fell 1.9% to Rmb18.60 after reporting it intends to raise Rmb5 billion through a rights issue.

Xinjiang Goldwind Science and Technology rose 1.1% on the hopes that the recent accord in Copenhagen on climate change will support higher sales.