China Economic Scan - Your daily update on the Chinese economy.
In this edition: China's factory output grows 7.3% in April, China Eastern Airlines gets further capital injection from SASAC, CNOOC-BG group sign agreement for Aus LNG project, Sanlu company sells for 7.3m yuan, Chinese stocks close at 9 month high.
Top 5 headlines
China’s Factory Output Grows Less-Than-Estimated
- Output rose 7.3% from a year earlier, the statistics bureau said today, after gaining 8.3% in March, and less than analyst estimates of 8.6%.
- Retail sales grew 14.8%, above estimates of 14.5% (and 14.7% in March).
- The data adds to evidence that a 4 trillion yuan ($586 billion) stimulus plan is buoying domestic growth, while the global recession takes a toll on exports and related industries.
China Eastern gets another 2b yuan injection
- China Eastern Airlines has secured another two billion yuan ($293 million) injection from the State-owned Assets Supervision and Administration Commission (SASAC).
- Last year, the central government injected 7 billion yuan and 3 billion yuan into China Eastern and its bigger rival China Southern Airlines, respectively, in a bid to help the troubled airlines to weather the financial crisis.
- It is rumored that the new injection will be used to facilitate a merger between China Eastern and Shanghai Airlines.
CNOOC, BG group sign agreement for Australian LNG project
- China National Offshore Oil Corp (CNOOC) signed an agreement with UK-based BG Group involving a liquefied natural gas (LNG) development project in Queensland, Australia.
- Under the agreement, CNOOC would buy 3.6 million tons per annum (mtpa) of LNG for 20 years
- The project would come on line in 2014 with two liquefaction trains providing 7.4 mtpa capacity.
Sanlu brings 7.3m yuan at auction
- The brand of Sanlu Group, the dairy company embroiled in China's tainted-milk scandal, was sold at an auction Tuesday for 7.3 million yuan ($1.07 million), court officials said.
- An unidentified individual entrepreneur from south China won the bid at an auction in the Shijiazhuang Intermediate People's Court in northern Hebei province.
- Beijing-based dairy producer Sanyuan bought the core assets of Sanlu, which went bankrupt in February, for 616.5 million yuan at an auction on March 4.
China Shares End At 9-Mo High Led By Petrochemicals,Coal Cos
- Chinese stocks reached 9-month highs with the Shanghai Composite up +1.74% to 2,664, the Shenzhen Component up +1.13% to 10,294, but the Hang Seng down -0.55% at 17,060.
- "Investors seem to have formed a consensus that any declines in the index levels represent opportunities to enter the market," said Wu Feng, an analyst at TX Investment Consulting. "It's not to say that there won't be a pullback on profit-taking in the near term though."
- Tangshan Iron & Steel was up 2.2% at CNY6.87 and Chongqing Iron & Steel rose 4.4% to CNY5.43. China Coal Energy jumped 7.1% to CNY11.71 and Hebei Jinniu Energy Resources rose 8.4% to CNY35.42. China Petroleum & Chemical ended up 3.1% at CNY10.84.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 17,060 | -94.02 | -0.55% |
| Shanghai Composite | 2,664 | 45.6 | 1.74% |
| Shenzhen Component | 10,294 | 115.22 | 1.13% |
| TAIEX | 6,485 | 52.59 | 0.82% |
| CNY/USD | 6.8270 | 0.001 | 0.01% |
Source: China Economic Scan
