China Economic Slowdown, Third Largest Economy

123jump.com Staff
22 Jan, 2009
New York City

Chinese economy grows at the slowest pace in the last seven years as the falling domestic demand and international trade contributes to the weakness. The GDP rises 6.8% in December as trade growth declines. Inflation falls sharply in December and corporate profits increase at the slowest pace.

[R]6:00AM New York, 6:00PM Hong Kong - China’s gross domestic product increases at the slowest pace in the last seven year as the falling domestic demand and international trade contributes to the weakness. The GDP rises 6.8% in December.[/R]

Hong Kong stocks stocks edged higher after a week of weak trading and falling prices.

In Hong Kong trading Hang Seng Index rose 0.6% or 74.36 to 12,657.99, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, edged up 0.4% or 29.95 to 6,760.77. In Shanghai trading CSI 300 Index rose 1.1% or 22.84 to 2,044.55.

Daily turnover on main-board declined to HK$35.4 billion compared with HK$39.6 billion yesterday.

China GDP Slows to 6.8% in December

China Daily Online reported today that commissioner of the National Bureau of Statistics Ma Jiantang said the country’s gross domestic product eased to 6.8% in December from the year ago period.

The economy however advanced 9% to Rmb30 trillion in 2008, and the economy grow at a rate less than 10% for the first time since 2002 and fallen from its peak rate of growth at 13%.

China is now the world’s largest economy after the United States and Japan.

Agricultural production increased 5.4% to 528.50 million tons in 2008 from a year ago, while the output of meat rose 5.9% to 72.50 million tons on increased production of pigs.

The NBS also noted that industrial production eased 12.9% in 2008 from the same period a year ago, which is 5.6 percentage points lower than the previous year.

Value added of the state-owned and state holding enterprises advanced 9.1%; collective enterprises 8.1%; share-holding enterprises 15%; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan 9.9%.

Heavy industry increased 13.2% and the light industry edged up 12.3%.

In the first eleven months of the year profits of industrial enterprises above the designated size soared 4.9% to Rmb2.4 billion from a year earlier.

The statistics bureau also said total volume of imports and exports for the year grew 17.8% to $2.5 trillion.

The total value of exports increased 17.2% to US$1.4 trillion, while imports rose 18.5% to US$1.1 trillion, yielding a trade surplus of US$ 295.5 billion.

Production gained 5.9% in December from 5.4% in the previous month.

Consumer Price Index also eased to 1.2% in the month from 2.4% in November.

CPI is however dropping at a fast pace raising the spectre of a sustained decline in the prices of food and commodities.

The Producer Price Index slipped 0.4% in December from a year earlier from a peak of 10.1%.

PPI also rose 6.6% and 2% in November.

China''s retail sales edged up 4.8 percentage points from last year to 21.6%in 2008.

Gainers & Losers

HSBC advanced 3.6% on bargain hunting after dropping sharply for the past eight trading sessions.

Financial stocks advanced. ICBC rallied 1.6% and China Construction Bank gained 1.6%.

Conglomerate Hutchison Whampoa increased 0.1%.

Shun Tak Holdings Ltd dropped 24.2% to HK$2.6 after the company and Mandarin Oriental International announced that they have sold a Macau hotel to Stanley Ho''s flagship company for HK$1.6 billion.

The company also unloaded its stake worth valued at HK$740 million and a share buyback program.

China Power International rose 1.5% despite announcing yesterday that it forecasts a loss for 2008 on an impairment loss related to the closure of smaller generation units.

China Shipping Container Lines fell 1.8% after saying its profit will drop 50% as export cargoes from China dropped and demand slowed.

Li & Fung increased 5.9%.