China Economic Scan - Your daily update on the Chinese economy.
In this edition: China provides further details on stimulus spending, China considers setting iron ore price index, Zhongjin to boost gold production assets, Lenovo shares fall on record loss, Chinese stocks fall again - closing the week down.
Top 5 headlines
China updates spending details of stimulus fund
- China's economic planning body released a breakdown Thursday of how the government's 4 trillion yuan (US$586 billion) of stimulus funding was being spent.
- According to the commission, 214,000 units of low-income housing were completed, with construction started on another 650,000 units.
- Since the stimulus package was unveiled in November, 230 billion yuan had been used as of the end of April, the National Development and Reform Commission (NDRC) said.
China considers setting iron ore price index
- China will unveil its first iron ore trade platform Rizhao International Iron Ore Trade Center on May 25 in Shandong Province, which signals that the establishment of the country's iron ore price index is under way.
- Jointly invested in by 5 local private companies pursuing bulk commodity transaction in Shandong, the center mainly provides electronic commerce services for iron ore suppliers and steel makers.
- Data from China Customs showed the country imported 443.7 million tonnes of iron ore in 2008, and imports in January-April period in 2009 hit 188 million tonnes.
Zhongjin to get gold assets from parent
- Zhongjin Gold Co is making a bid to become the leading producer of the yellow metal in China.
- The Shanghai-listed company, controlled by the State-owned China National Gold Group Corp (CNGGC), plans to acquire seven gold mines in Henan, Hebei, Jilin provinces and Xinjiang Uygur autonomous region from its parent company in a transaction described by Zhongjin as an "asset injection".
- The acquisition, if it goes through, will boost Zhongjin's total gold reserves to 405.98 tons and annual production to 12.5 tons.
Lenovo Shares Fall on Record Loss, PC Market Outlook
- Lenovo's sales in Q1 2009 fell 26% to $2.77 billion, the company reported yesterday after the Hong Kong market closed.
- “There won’t be much of a rebound in business in the U.S. and Europe,” said Kevin Tam, who rates Lenovo shares “hold” at Everbright Securities in Hong Kong. “Profitability should improve as costs come down after the job cuts, and the company should gain sales in China and emerging markets.”
- The computer maker dropped -5.4% to HK$2.83 as of 10:55 a.m. on Hong Kong’s stock exchange.
China’s Stocks Decline, Complete First Weekly Drop in a Month
- Chinese stocks fell again on Friday with the Hang Seng down -0.80% to 17,063, the Shanghai Composite down -0.50% to 2,598, and the Shenzhen Component down -0.36%.
- “The economic recovery will take longer than earlier expected due to weak external demand,” said Yan Ji, who helps oversee $850 million of investments at HSBC Jintrust Fund Management Co. in Shanghai. “Investors shouldn’t expect stocks to rise as quickly as they have done this year.”
- Shenhua dropped -2.1% to 26.09 yuan. China Coal Energy, the No. 2, fell -3.2% to 11.68 yuan, paring its 2009 gain to 81%. Crude oil for July delivery yesterday dropped -1.6% to settle at $61.05 a barrel. An index of energy stocks has rallied 74% this year, the best performer out of 10 industry indexes on the CSI 300 Index. The gauge of materials shares ranks third, having climbed 62%.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 17,063 | -136.97 | -0.80% |
| Shanghai Composite | 2,598 | -13.02 | -0.50% |
| Shenzhen Component | 10,073 | -36.23 | -0.36% |
| TAIEX | 6,737 | 18.48 | 0.28% |
| CNY/USD | 6.8277 | -0.0018 | -0.03% |
Source: China Economic Scan
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