China Economic Scan - Your daily update on the Chinese economy.
In this edition: Chinese urban fixed-asset investment climbs further in May, China's May exports plunge 26.4%, Chinese car sales surge resulting in 2-month waiting lists, CICC beats Goldman Sachs in Asian bonds, Chinese stocks close down on Thursday.
Top 5 headlines
Chinese Investment Surges, Countering Record Export Slump
- China’s spending on factories, property and roads surged by the most in five years as the government’s 4 trillion yuan ($585 billion) stimulus package countered a record slump in exports.
- Urban fixed-asset investment climbed 32.9% in the 5 months to the end of May from a year earlier, the statistics bureau said today in Beijing.
- Urban fixed-asset investment in the first five months was 5.35 trillion yuan. The increase in spending was faster than the 30.5% gain in the first four months and the 31% median estimate of 16 economists surveyed by Bloomberg News.
China's May exports plunge 26.4%
- May exports fell by a record 26.4% from the same month of 2008, while imports were down 25.2%, the customs agency reported Thursday.
- Despite the year-on-year import decline, demand for foreign raw materials is rising as Beijing's stimulus spending takes hold, analysts said.
- They said the value of imports fell even as volume rose because of a 30 to 50% drop in the price of oil and other commodities from last year's highs, which cut China's import bill.
China Car Sales Jump ‘Beyond Imagination,’ Bring Two-Month Wait
- Beijing drivers, used to leaving showrooms with new cars the same day, now have to wait about three weeks for a Hyundai Motor Co. Yuedong Elantra, China’s bestselling car, or as long as eight weeks for a Honda Motor Co. CR-V sport-utility vehicle.
- Carmakers failed to predict a 14% sales jump caused by an economic rebound, tax cuts and subsidies and are now trying to raise Chinese output even as they cut U.S. and European production on plunging sales.
- “We are having headaches and shortages because the automaker can’t make enough Yuedongs,” said Li Minghui, a salesman at dealership Beijing Hyundai Boshishan. “We expected sales to pick up at the beginning of this year, but it’s beyond our imagination that it would be this good.”
CICC Beats Goldman as China Banks Join Top Ranks in Asia Bonds
- China’s banks, the world’s largest by stock market value, are starting to beat Western financial companies in underwriting Asian bonds as the government turns to capital markets to stimulate the economy.
- China International Capital, Morgan Stanley’s partner, Industrial & Commercial Bank of China and Bank of China penetrated the ranks of the top 10 bond firms in the region. They led underwriters with $39 billion of debt sales this year, or 12% of the total in the Asia-Pacific region, according to data compiled by Bloomberg.
- Beijing-based China International was the main securities firm in Chinese sales of $92 billion this year, almost five times the total of a year earlier.
Chinese shares down 0.67% on trade data, IPO shift
- Chinese stocks fell on Thursday with the Shenzhen Component down -1.12% to 10,700, the Shanghai Composite down -0.67% to 2,797, the Hang Seng edged sideways +0.03% to 18,791.
- "The new foreign trade data undermined investors' confidence," said Qin Xiaobin, a senior equity strategy analyst, Galaxy Securities. Further, news that China's securities regulator was ready to end de facto suspension of IPOs on Shanghai and Shenzhen stock exchanges also hurt stocks, Qin said.
- China Vanke, the largest property developer by market value, lost -2.94% to 10.89 yuan. China Merchants Real Estate shed -2.32% to close at 27.4 yuan.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 18,791 | 5.37 | 0.03% |
| Shanghai Composite | 2,797 | -18.93 | -0.67% |
| Shenzhen Component | 10,700 | -120.83 | -1.12% |
| TAIEX | 6,567 | 105.10 | 1.63% |
| CNY/USD | 6.8361 | 0.0031 | 0.05% |
Source: China Economic Scan
