China Targets 8% Growth, Stocks Drop

Darlington Musarurwa
05 Mar, 2009
New York City

China targeted economic growth of 8% in the current year and Premier Jiabao did not expand its current stimulus package of Rmb4 trillion. Stocks fell in Shanghai and Hong Kong after surging in previous session ahead of the announcement. Hutchison Telecom surged 10%.

[R]6:00AM New York, 6:00PM Hong Kong – China targets economic growth of 8% in 2009.[/R]

Hong Kong stock benchmark fell 1% as optimism that China will expand its Rmb4 trillion stimulus plan dissipated after China’s Premier Wen Jiabao didn’t mention the plans in his work report to the National People’s Congress today.

Premier however noted that the country will allocate more financial resources to achieve economic growth of 8% this year.

In Hong Kong trading Hang Seng Index dropped 1% or 119.91 to 12,211.24, and the China Enterprises of Hong Kong listed mainland shares, or H shares, shed 0.7% or 47.62 to 6,900.75. In Shanghai trading CSI 300 index gained 0.9% or 19.77 to 2,304.92.

Daily turnover on main-board declined to HK$43.1 billion from HK$45 billion yesterday.

China Targets 8% Economic Growth

Chinese Premier Wen Jiabao told parliament’s 3,000 delegates at the National People’s Congress the country will achieve the targeted 8% economic growth this year, notwithstanding the current global financial crisis.

China will avail more financial resources to critical sectors to support growth.


The country’s deficit is Rmb570 billion more than a year ago at Rmb750 billion and is projected to increase further.

Bilateral relations between China and Taiwan are expected to improve and Beijing will provide Rmb 130 billion in financing over the next two to three years to Taiwan-based companies operating on the mainland.

Gainers & Losers

Hong Kong stocks fell 1% as investors were disappointed after the premier did not expand already large stimulus package.

However, Beijing reported that it will increase spending in order to ensure that it achieves the set target of 8%.

Hutchison Telecommunications International Ltd surged 10.4% to HK$2.34 after saying it will spin off its Hong Kong and Macau businesses. Goldman Sachs also upgraded the stock to ""buy"" from ""neutral.""

HSBC rose 1.4% to HK$44.80.

China Mobile fell 1.9% and Hong Kong Exchanges & Clearing declined 4.6%. China Construction Bank edged up 1.3% to HK$4.01 and Bank of China edged up 0.9%.

Dongfeng Motor Group soared 3.9% to HK$2.94.