China

123jump.com Staff
23 Jul, 2008
New York City

The Asia Development Bank reported on its web site that China

Market Sentiment

In Hong Kong trading the Hang Seng Index rose 2.69% or 607.07 to 23,134.55, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, jumped 3.27% or 406.38 to 12,849.76. In Shanghai trading CSI 300 dropped 0.74% or 21.42 to 2,883.32.

Daily turnover on main-board was HK$75.8 billion from HK$51.9 billion yesterday.

China Economic Growth to Ease to 9.9%

The Asia Development Bank reported on its web site that China’s economic growth is forecast to ease to 9.9% this year and 9.7% next year due to the global economic slowdown, rising food and energy prices as well as the volatile financial markets.

In particular, growth in China will cool because of the gradual appreciation of the yuan, weakening external demand and tightening policies.

Economic growth in East Asia is expected to dip to 7.6% in 2008 and 2009 from 9% in 2007.

Earlier ADB projected that China''s economy will expand by 10% this year and 9.8% next year.

The report further reveals that the July issue of the Asia Economic Monitor indicates that the regions economic outlook remains susceptible to a higher-than-anticipated increase in inflation.

Notwithstanding moderating growth, price pressures are likely to remain because of rising food and energy costs.

“Rising inflation is a serious threat to the region’s sustained, strong growth as high import costs of food and fuel threaten to trigger a price/wage spiral, unleashing more inflation,” says Jong-Wha Lee, Head of ADB''s Office of Regional Economic Integration (OREI).

Lee added that in order to mitigate the effects of inflationary pressures there was need to promote exchange rate flexibility.

According to semiannual AEM, which covers 10 members of the Association of South East Asian Nations (ASEAN); the PRC; Hong Kong, China; Republic of Korea; and Taipei, China, growth is expected to fall by one percentage point to 5.5% in 2008.

China Power Production to Rise 13%

China Daily reported today on its web site that China Electricity Council announced that China’s major power plants produced 12.9% more electricity at 1.68 trillion kWh in the first half of this year, while electricity produced at coal-fired power plants rose 11.7% from a year earlier to 1.41 trillion kWh.

Also, hydropower stations produced 214.9 billion kWh, up 18.5% from the comparable period last year, and electricity produced at nuclear power stations rose 25.9% from last year to 32.9 billion kWh.

The country invested Rmb133.7 billion and added 33 gW of installed capacity during the first six months of the year.

Power consumption also rose 11.67% to 1.69 trillion kWh in the review period.

Gainers & Losers

Hong Kong stocks rose as oil prices widened losses and lifted airlines.

Airlines further rose on speculation that there will be consolidation in the sector. China Eastern Airlines soared 11.8% and Shanghai Airlines advanced 4.1% after Caijing magazine reported China''s central government and Shanghai''s city government were discussing the possibility of merging the carriers.

Air China climbed 5.6%, Cathay Pacific rose 6.3%, and China Southern jumped 9.9% as a result.

Oil refiner Sinopec Corp rose 5.3% also on dropping oil prices.

Hong Kong Exchanges & Clearing edged up 3.8%.

Financial stocks advanced on rising optimism over the outlook of the global economy. HSBC Holdings rose 3%, China Construction Bank added 3.4%, Bank of Communications increased 2.9% and ICBC gained 3% to HK$5.87.

Insurer China Life jumped 3.1%, while Anhui Conch recovered to gain 10.2%.

Hutchison Whampoa declined 0.7% on worries over the company’s capacity to bankroll the 3.1 billion euro upgrade of cargo facilities at Greece''s Thessaloniki port.

Zijin Mining plummeted 2.4% after gold prices retreated.