China Economic Scan - Your daily update on the Chinese economy.
In this edition: China's fiscal revenue rises 4.8% in May, Microloans drive growth and change in rural China, Tencent CEO says still hopes to list yuan A shares, Everbright and Zunyi may be first to IPO following CSRC green light on new issues, Chinese stocks close down on Tuesday.
Top 5 headlines
China's fiscal revenue in May signals recovery
- An increase in China's fiscal revenue in May indicates a recovery in the economy and leave the government more room to employ fiscal measures to boost it, Tuesday's China Daily quoted experts.
- The country's fiscal revenue in May rose 4.8% year on year to 656.95 billion yuan ($96.05 billion), reversing the downward trend of the past few months, the Ministry of Finance (MOF) said yesterday.
- Aggregate central and local government revenues in the first five months stood at 2.71 trillion yuan, down 6.7% from a year earlier.
Wang Shulian’s Microloan Funds China Growth Impetus
- Microfinance provides small loans of a few thousand yuan to people in poverty who can’t get regular bank funding. Such programs have encouraged rural growth in countries including Bangladesh, where Nobel Peace Prize-winning economist Muhammad Yunus established Grameen Bank in the 1980s to extend loans to the poor.
- “Getting the money to trickle down” to the lowest level of the economy “is very, very important for the long-term development of China,” says Tammy Lam, who left her job as chief risk officer at Citibank last year to found Rural Impact Professionals, a nonprofit that fosters microcredit.
- “It’s really effective,” says Wang, 58, whose success encouraged her neighbors to get loans to raise sheep, expanding their village economy beyond subsistence farming. Many families now make at least several thousand yuan a year. Without the loans, “we’d still be poor,” she says.
Tencent CEO: Still Hope To List Yuan-Dominated A Shares
- Chinese Internet portal operator Tencent Holdings said the company still hopes to list yuan- denominated A shares in Shanghai. In March, the company said it had to drop its plans to list A shares because of poor market conditions.
- "Many domestic investors want to buy our shares and we want to allow our users to become our shareholders," Chairman and Chief Executive Ma Huateng told reporters Monday.
- Tencent said last month its net profit for the three months ended March 31 rose 94% to CNY1.05 billion from CNY542.0 million a year earlier.
Everbright, Zunyi May Lead China Share Sale Revival
- Everbright Securities Co., Zunyi Titanium Co. and Sichuan Expressway Co. may be among the first companies to sell shares publicly in China since September as the government prepares to reopen what was the world’s second- largest equity fundraising market in 2007.
- Everbright Securities, China’s 11th-biggest brokerage by assets, Zunyi Titanium and Sichuan Expressway are working on final documents required for regulatory approval to offer stock in Shanghai or Shenzhen, three people with knowledge of the matter said.
- “Current liquidity conditions can support share sales,” said Yi Yangfang, investment director at GF Fund Management Co. in Guangzhou, which manages about 78 billion yuan ($11.4 billion).
China Shares End Lower Led By Property Cos, Banks
- The benchmark Shanghai Composite Index, which tracks both A and B shares, ended down 0.5% at 2776.02. The Shenzhen Composite Index was flat at 916.55.
- Turnover for the Shanghai Composite Index slipped to CNY110.55 billion ($16.17 billion) from CNY111.43 billion Monday, which was down from CNY136.3 billion Friday. Analysts pointed to the shrinking turnover as a sign of investor cautiousness.
- Zhang Gang, an equity strategist at Central China Securities, said the Shanghai Composite Index will likely continue to consolidate around 2800 ahead of the resumption of initial public offerings, which may be later this month. "Until new IPOs are launched and people see how they're priced, uncertainty in the market will continue," he said.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 18,166 | -333.46 | -1.80% |
| Shanghai Composite | 2,776 | -13.53 | -0.49% |
| Shenzhen Component | 10,797 | 28.24 | 0.26% |
| TAIEX | 6,221 | -4.75 | -0.08% |
| CNY/USD | 6.8341 | -0.0069 | -0.10% |
Source: China Economic Scan
