Invest China Focus Newsletter
No. 04 2010 (Jan 21st – 27th)
Editor: Dr. Xiaozhou Cheng,
Greenway International Business Consulting
Shanghai Stock Exchange launched plans to open an access for foreign company to be listed in A- share on Shanghai stock markets. Pricecoperwater, a think – tank, had projected that five foreign companies would be listed on Shanghai Stock Exchange by IPO in 2010. Shanghai & Hong Kong Bank, Standard & Chartered Bank, New York Stock Exchange Group. Coco Cola, Siemens, Wal Mart, etc. probably would be qualified to launch IPO in 2010. Except these foreign companies, some Chinese companies, which were corporate at Hong Kong, were trying to seize the opportunity to launch IPO at Shanghai capital markets. Ten years ago, China was looking for a foreign investor with fund and capital, but now the situation has been changed. Given that China has $ 2.3 trillion foreign reserve and Chinese has a 30% of saving ratio to GDP by the end of 2009, the profound capital, which is not matched with new technologies, is looking for a good project to invest in China. Actually, there are lots of “good project” in China to be developed, such as a clean energy section, environment section, automobile section, infrastructure section, etc. The core issue is that the profound capital needs new technology to be matched. Both Canada and the United States are the developed countries, a lots of new technology has been used in the sections ranging from light industry to heavy industry. If you transfer your advanced technologies to a developing country, such \China, you would get more profits in a developing country than that of a developed country. The proposition has been proofed by the experiences of the capital and technology flow for last three decades.
2, The growth rate of GDP of China is 8.7% in 2009
The National Statistic Bureau of China released the data about the economy of China in 2009. The news said the growth rate of GDP is 8.7% in 2009 and achieved the expectation of 8%- growth-rate which was set at the beginning of 2009 by the government. The total GDP is ¥ 33.52 trillion in 2009 and the per capita of GDP is about US$ 3000 and the government is expecting that the per capita of GDP in China will be about over US $ 3400 by the end of 2010. Although China is a developing country by the criteria of per capita of GDP, but in the eastern area of China , especially like Shanghai, Shandong, Dalian, Guangdong (Canton), Jiangsu, Zhejiang, and Beijing, the per capita of GDP is same as that of a developed country, This mean that there are opportunities to develop the markets.
3, CPI in China has passed the turn point, the inflation is alert
CPI in China in Dec. is up 1.9% and PPI 1.7%, the National Statistic Bureau of China said, the two indexes has passed the slumming down period and begin to going up. With the price of vegetable and food going up in Dec. due to the bad weather and the bubble in the real estate markets, the central bank and the governments in China has been alert to the emerging inflation. The central bank already tightened the credits by requiring the commercial banks to park more money in their accounts at the central bank, and the governments has put restriction policies on applying bank loan to buy house trying to cool down the real estates markets and getting rid of the pressure if inflation.
4, High investment pushed the high growth rate of GDP in China.
The total value of GDP of China in 2009 is RMB¥ 33.52, said the government in last week, the growth rate of GDP is 8.7%, which is the highest one all over the world in 2009, the international financial crisis year. Similar to any other countries’ governments, China had launched RMB ¥ 4 trillion of stimulus package at the end of 2008 and tried to keep the economy from sliding down a recession. By the data of the economy in 2009, the total fixed investment is RMB ¥ 22.48 out of RMB ¥ 33.52 of GDP in China, and the growth rate of the investment is about 30% yearly, which is higher than that of last two decades. This means that the growth of economy in China still is not stable, and has a hazard to slide down. Based on this judgment, although the central bank of China has tightened its credits, the sound economic growth in China still needs easy monetary polices.
5, China has the largest cell phone markets all over the world in 2009
The new users of cell phone in 2009 were 106.13 million and the total users were 747.38 million, said of the government of China Comparison with that of the other countries; China had the largest cell phone markets share all over the world in 2009. What do you think about the news?
6, The sale of 3G cell phone was over 5 million in 2009
The sale of 3G cell phone was over 5 million in 2009, and the three brands of cell phone, such as Samsung, Nokia, and Copai, held the 60% of shares of the markets in China. The sale of the 3G cell phone in Dec. of 2009 was over 1.7 million, and got a one-third share of whole year sale. This meant that the sale of 3G cell phone is in the strong growing period. If you can catch the pulse of growth, you will make more profits in China.
7, Bank of China Sold RMB ¥40 billion of convertible bond
Bank of China announced that the bank sold 40 billion yuan of convertible bond. The proceeds of issuance of the bond will top up the capital of the bank.
Exclusive review of monetary policy
the monetary policy is not a good option for the economic growth of China in the
first half of the year
More information on the research report of the monetary policies in China, Please contact us.