China Economic Scan - Your daily update on the Chinese economy.
In this edition: Inflation said unlikely to occur in China in 2009, Hong Kong Q1 GNP/GDP down, CIC confirms financing deal with Australia's Goodman Group, UBS strategist speculates that US companies such as Coca Cola/GE/Walmart may seek Chinese listing, Chinese stocks get a boost on Wednesday.
Top 5 headlines
Economists: Inflation not likely to occur in China in 2009
- Concerns over possible inflation have shadowed the growth in bank credit, which continued to expand in May, with new loans reaching 664.5 billion yuan ($97.29 billion), according to the People's Bank of China (PBOC), the central bank, on June 12.
- About 49% of Chinese bankers thought the loans policy was a bit too "relaxed", an increase of 3.9 percentage points from the first quarter, while confidence in macro-economic growth prediction reached 39.1%, up 5 percentage points.
- "Deflation, instead of inflation, should be the major concern," said Yao Jingyuan, chief economist with the National Bureau of Statistics (NBS). "There is no need to be too worried about inflation, as commodities prices will remain low for the whole year," said Yao.
Hong Kong's first quarter GNP, GDP go down
- Hong Kong's gross national product (GNP) fell 9.2% in the first quarter over a year earlier, to 388.7 billion HK dollars (US$50.15 billion) at current market prices, Hong Kong Census and Statistics Department said.
- According to statistics from the department, Hong Kong's gross domestic product (GDP), estimated at 380.1 billion HK dollars (US$49.05 billion) at current market prices in the first quarter, fell 7.3% during the period.
- Compared with GDP, the value of the GNP was larger by 8.6 billion HK dollars (US$1.11 billion) in the first quarter, representing a net external factor income inflow of the same amount, and equivalent to 2.3% of GDP during the period.
CIC confirms financing deal with Goodman Group
- China Investment Corporation (CIC), the country's sovereign wealth fund, confirmed Wednesday that it will lend AU$200 million ($159 million) to Australia's leading property trust Goodman Group.
- CIC would commit to a financing facility alongside Macquarie Bank, Australia's biggest investment bank, said a source with CIC who declined to be named.
- Goodman Group is the third overseas company which CIC had chosen to invest in after buying stakes in Blackstone and Morgan Stanley since 2007.
Coca-Cola, GE, Wal-Mart May Seek China IPO, UBS Says
- Coca-Cola Co.,General Electric Co.Wal-Mart Stores Inc. are among U.S. companies that may seek to list on China’s stock exchanges, UBS AG said.
- John Tang, a Hong Kong-based UBS strategist, said he expects a dozen Western companies with a “strong presence” in China to offer shares in the yuan-denominated A-share market.
- “An A-share IPO allows foreign companies direct access to much needed renminbi funding,” Tang wrote in a note to clients. UBS declined a request for an interview.
China shares rise after Hu says stimulus working
- Chinese shares rebounded Wednesday after President Hu Jintao said Beijing's stimulus is showing results and China was determined to take the lead in emerging from the global economic crisis.
- Real estate stocks jumped, with China Vanke Ltd., the country's biggest developer, soaring 9.7% to 11.88 yuan, and rival Poly Real Estate Group up 8.2% to 25.52 yuan.
- Medical shares rose on speculation that the spread of the swine flu pandemic would drive sales. Da An Gene Co., a biotechnology company, surged 9% to 16.43 yuan, while Shenzhen Neptunus Bioengineering Co. rose by the daily 10% limit to 9.04 yuan.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 18,085 | -80.9 | -0.45% |
| Shanghai Composite | 2,810 | 34.1 | 1.23% |
| Shenzhen Component | 11,040 | 243.29 | 2.25% |
| TAIEX | 6,196 | -24.90 | -0.40% |
| CNY/USD | 6.8382 | 0.0041 | 0.06% |
Source: China Economic Scan
