China Reserves Surge 23% to $2.4 Trillion

Darlington Musarurwa
15 Jan, 2010
New York City

Foreign exchange reserves surged 23% to $2.4 trillion in 2009 as trade surplus drives new fund flows of $453 billion. Foreign direct investment in December more than doubled to $12.1 billion. Automakers rise on the brisk demand for automobiles despite revised taxes in 2010.

[R]9:00 PM Hong Kong, China – Foreign exchange reserves surged 23% to $2.4 trillion in 2009 as trade surplus drives new fund flows of $453 billion. Foreign direct investment in December more than doubled to $12.1 billion. Automakers rise on the brisk demand for automobiles despite revised taxes in 2010.[/R]

Hang Seng index in Hong Kong decreased 62.79 or 0.29% to 21,654.16, and CSI 300 index in China higher 13.69 or 0.39% to 3,482.74.

Record Foreign Reserves in China

People’s Bank of China reported international reserves increased 23% to $2.4 trillion, largest in the world. Surging exports and trade surplus has lifted China’s reserve to a record in ten years. In the year, reserves increased by $453 billion. Foreign exchange reserves increased $127 billion in the fourth quarter after $141 billion gain in the third.

New loans in the year 2009 increased to Rmb 9.59 trillion or $1.4 trillion and record high liquidity in the financial system and the flow of speculative funds is a growing concern to regulators.

Trade economists are estimating that China may not record any trade surplus in the current year as the nation seeks to control the flow of speculative funds.

Foreign direct investment in December more than doubled from a year ago to $12.1 billion as investors seek more manufacturing capacity in China.

Other Movers

China Shipping Container Lines Company Limited the group of container lines rose 0.6% to HK$3.33.

China Shenhua Energy Company Limited dropped 0.7% to Rmb 32.73 after the coal producer signed 2010 coal term deals with power generating companies at Rmb 570 a ton, up Rmb30 from a year earlier according to media reports.

Chongqing Changan Automobile Company Limited climbed 1.1% to Rmb7.26.

Foxconn International Holdings Limited the contract maker of mobile-phones increased 6.5% to HK$11.04.

New World Department Store China Ltd increased 2.3% to HK$7.88 and the retailer said that the company is planning to open up to six stores in mainland China in the current year.

PetroChina Company Limited fell 0.9% to HK$9.54 and key refineries off the northeast coast have seen few disruptions to fuel shipments, despite severe cold weather according to media reports.

SAIC Motor Corporation Limited the maker of motor vehicles rose 1.4% to Rmb23.09.

Semiconductor Manufacturing International Corporation added 2.9% to HK$0.70.

Wolong Real Estate Group Co., Ltd rose 9.9% to Rmb16.97 after the specializes on real estate development announced that it will pay a cash dividend of Rmb 1 to every 10 shares held and use its additional paid-in capital to fund an issue of eight shares for every 10 shares.