China Economic Scan - Your daily update on the Chinese economy.
In this edition: China economists raise growth forecasts, China may raise gasoline and diesel prices, Gold fever hits Chinese investors, Rocawear owner forms venture with Bosideng, Shanghai Gold Exchange marks 134% increase in trading.
Top 5 headlines
China Economists Raise Growth Forecasts Amid Signs of Weakness
- China’s growth prospects have improved from three months ago, even after accounting for drops in steel and electricity output and the risk of a manufacturing contraction this month, economists’ forecasts show.
- The world’s third-largest economy will expand 7.5% this year, according to the median estimate of 14 economists surveyed by Bloomberg News, up from a 7.1% forecast in February.
- Gross domestic product expanded 6.1% in the first quarter, the slowest pace in almost 10 years.
China May Raise Gasoline, Diesel Prices, Analyst Says
- China, the world’s second-biggest energy user, may raise gasoline and diesel prices by about 10 percent by next weekend as higher oil prices are leading to losses at the nation’s refiners, according to an analyst.
- Crude has surpassed $60 a barrel, putting pressure on Chinese refiners, Gordon Kwan, the head of energy research at Mirae Asset Securities in Hong Kong, said in an e-mail today.
- “We believe China is forced into a corner” and will raise prices “as soon as this weekend, and if not, very likely by next weekend following OPEC’s strong resolve to support higher oil prices,” Kwan said.
Gold fever grips Chinese investors
- Gold prices quoted on the Shanghai Gold Exchange SGE have increased by an average 6.74% in the past month to the current level of about 209 yuan a gram.
- "Gold demand in China in the first quarter rose to 114 tons, up 2% over the same period last year, solely boosted by an increase in jewelry demand," according to the latest Gold Demand Trends report for the first quarter of 2009 published by the World Gold Council.
- The report said global demand for gold rose 38 percent year-on-year to 1,016 tons, representing a 36% rise in value. China is the world's second largest gold consuming country after India.
Rocawear Owner Forms Venture With Bosideng to Open China Stores
- Rocawear, a brand co-founded by rapper Jay-Z, may sell clothes through 300 China stores after its owner entered into a venture with Bosideng International Holdings Ltd., the country’s biggest maker of down jackets.
- Bosideng said in a statement to Hong Kong’s stock exchange that it will partner with Iconix China Ltd. to sell the Rocawear range of men’s and women’s products in China by next year.
- Bosideng fell -1% to HK$1.04 in Hong Kong trading. Bosideng shares have gained +42% this year, compared with +26% for the benchmark Hang Seng Index.
Shanghai gears up for the big league
- With gold gaining a greater role in China's foreign exchange portfolio, experts feel that it is only a matter of time before Shanghai becomes a major gold trading market.
- Around 4,220.7 tons of gold was traded at the bourse in 2008, worth 822.9 billion yuan ($120.52), up 134.19% and 164.15% year-on-year, respectively, making it the world's top exchange for spot gold trading.
- "Although Shanghai still lags behind other gold trade centers like Hong Kong, New York and London in terms of global influence, China's robust economic growth and the city's plans to turn itself into a global financial center will give it an added advantage," said Albert Cheng, director of the World Gold Council's Far East Division.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 18,171 | 285.73 | 1.60% |
| Shanghai Composite | 2,633 | ||
| Shenzhen Component | 10,128 | ||
| TAIEX | 6,890 | ||
| CNY/USD | 6.8325 |
Source: China Economic Scan
