China Trade Surplus Surges; HK Stocks Drop

123jump.com Staff
11 Feb, 2009
New York City

Exports from China dropped 17.5% in January and imports plunged 43%. Total foreign trade surplus in the month surged 102% to $51.43 billion in the month. Stocks in Hong Kong dropped sharply on the weakness in financial on the lack of clarity in the U.S. bank bailout plan.

[R]6:00AM New York, 6:00PM Hong Kong - China exports fell 17.5% to $90.45 billion in January.[/R]

Hong Kong stocks fell on skepticism over the U.S. financial rescue plan.

In Hong Kong trading Hang Seng Index fell 2.5% or 341.43 to 13,539.21, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, dropped 2.8% or 215.11 to 7,597.57. In Shanghai trading CSI 300 index rose 0.2% or 4.38 to 2,331.14.

Export Declines 17.5% in January

General Administration of Customs in China reported today that export fell 17.5% to $90.45 billion in January, while the imports tumbled 43.1% to $51.43 billion.

Total foreign trade rose to $141.8 billion and trade surplus soared 102% to $39.1 billion.

Excluding the effect of the week-long Spring Festival holiday, export growth advanced 6.8% year-on-year and the import decline stood at 26.4%.

Export volume increased 10.1% in December on a monthly basis and the import value dropped 3.8%.

China Savings Rate to Remain High

China Daily Online reported that Governor of the Peoples'' Bank of China Zhou Xiaochuan said China will not be able to reduce its savings rate quickly because of a number of complex factors.

Zhou added that it wasn''t possible to adjust the savings rate by changing the exchange rate.

The report notes that special traditions, cultural differences, family structures and demographic features of East Asian economies attribute to the high savings rate of the countries.

""""""""People may think the exchange rate and interest rate are deciding the relationship between savings and consumption, but in realty things are much more complicated,"""""""" said Zhou.

Gainers & Losers

Hong Kong stocks dropped on skepticism over the U.S. financial rescue plan announced by Treasurer Timothy Geithner yesterday.

The $2 trillion fund did not provide specifics of how bad debts on companies'' balance sheets were going to be mopped.

Financial stocks dropped. HSBC Holdings slipped 4.8% to HK$59.95.

Energy stocks fell after crude oil prices fell 2.1% to $37.60 per barrel. PetroChina dipped 3% to HK$6.40, CNOOC declined 2.9% and Sinopec Corp fell 4.8%.

Commodity stocks also gained. Zijin Mining soared 7.5% and Zhaojin Mining edged up 7.1%.

Aluminum Corp of China Ltd (Chalco) advanced 0.7% after the company said that senior management is not expected to change. Yesterday, chairman, Xiao Yaqing stepped down as president of Chalco''s parent company, Aluminum Corp of China.

Tsingtao Brewery rose 2.5% on expectations government will cut taxes on consumer goods.