Altruistica

"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

02 December 2006

China Growing 9.8% in 2007, 10% in 2008-US Recession

Chinese tell macro restrainers to piss off, Japan &SK invest
http://www.morganstanley.com/views/gef/archive/2006/20061201-Fri.html

The Chinese seem to be paying lip-service to the rebalancing imperatives that I and other macro types continue to stress -- the long-awaited shift from an export- and investment-led growth model to one that draws increasingly greater support from private consumption (see my just released Special Economic Study, “China’s Rebalancing Imperatives: A Giant Step for Globalization,” December 1, 2006). Senior Chinese officials frame such a transformation as a longer-term objective of market-driven reforms. For the foreseeable future, however, they believe they have the luxury of time to cope with what they believe to be an evolutionary shift in the macro sources of economic growth.

China News Summary December 1, 2006
http://news.tradingcharts.com/futures/4/9/86383094.html

BEIJING, Dec 01, 2006 (XFN-ASIA via COMTEX) -- FOREX

**Yu Yongding, a former People's Bank of China adviser said country's foreign exchange reserves policy has served it well and will not be suddenly changed. Yeah, sure...

**The yuan closed at 7.8325 to the dollar on the exchange-traded market against yesterday's close of 7.8311. The central bank set the yuan central parity rate at 7.8331 to the dollar, compared with the midpoint of 7.8436 set the previous trading €day.

MARKETS/ECONOMY

**China's interbank market will began trials for a Shanghai Interbank Offered Rate today today, the official China Securities Journal reported. The report said during the one-month trial period, major participating institutions will make bids for overnight borrowing to arrive at a SHIBOR quote.

**Goldman Sachs said it expects China's economy to grow 10.0 pct in 2008, after a very slight easing to 9.8 pct real GDP growth in 2007.

**Consumption of auto fuels, including diesel and gasoline, is expected to hit 150-170 mln tons in 2010, Liu Ming, a senior economist with the State Information Center, said at an oil conference.

**China is expected to record net crude oil imports of about 210 mln tons in 2008, Yang Xunying, the vice director of sales at Sinopec said at an oil conference. The country's total consumption of crude oil is expected to reach 380 mln tons in 2008 and 410 mln tons in 2010, Yang said. China's strategic stockpile...


**The purchasing manager's index for the manufacturing sector rose to 55.3 points in November from 54.7 in October, the China Federation of Logistics and Purchasing said.

**The China Banking Regulatory Commission said 776 illegal financial activities were uncovered during the first 10 months of this year, down from 995 a year earlier.

**Xie Fuzhan, the head of the National Bureau of Statistics, said China is wary of a possible rebound in investment in 2007, the official Securities Times reported.

**Nokia is estimating mobile phone user numbers in China will pass the 500 mln mark in 2007.


POLITICS/TRADE

**Foreign Ministry spokeswoman Jiang Yu said the US, China and North Korea exchanged views in a "frank and in-depth" manner during their two days of meetings but produced no agreement on a date for six-party talks, the official China Daily reported.

INDUSTRY

**Foreign investors will be required to operate life insurance businesses in China with local partners, and their joint venture stakes will not be allowed to exceed 50 pct "in future," the China Securities Journal reported, citing an insurance regulator.

**China will soon unveil new rules for vendors of oil products, a Commerce Ministry official said. Wu Guohua, director of the policy research department, told an industry conference that the new regulations will be part of China's market opening measures as required under its pledges to the World Trade Organization.

**Macquarie Research Equities said China's rapid growth in copper consumption is likely to taper off soon due to greater use of substitute metals, as well as market saturation in key products which traditionally have high copper content. Macquarie also said China's steelmakers have managed to show some improvement this year despite widespread overcapacity, intense competition and higher raw material costs

CORPORATE

**China Post Group has been established with registered capital of 80 bln yuan, completing a corporate transformation from its predecessor, the State Postal Bureau, the official Shanghai Securities News reported.

**China Development Bank, one of the country's three policy banks, said it has issued 20 bln yuan worth of six-month bills on the interbank market. In a statement on the Chinabond website, it said the nominal interest rate was set at 2.89 pct. The bank also said it plans to issue a third batch of asset-backed securities worth about 7 bln yuan in mid-December, the official Securities Times reported. Who's buying? JPM?

**China plans to auction on Dec 6 a treasury funds deposit of 20 bln yuan, the Finance Ministry and central bank said in a joint statement on the Chinabond website.

**Agricultural Development Bank of China, one of the country's three policy banks, said it plans to issue 15 bln yuan worth of three-year fixed-rate debt on Dec 8. The interest rate will be determined through a Dutch auction, the bank said in a statement.

**CNPC paid a windfall profit tax of 12.55 bln yuan for the third quarter, an official of the state-run oil company said.

**Jabat Yakin Aluminium Sdn Bhd is in talks with a few potential technology partners in China, including Shenyang Aluminium, regarding its plan to build an aluminum smelter complex costing about 3 bln rgt, its managing director Shaiful Nizam Abdullah said.

**The Export-Import Bank of China, one of the country's three policy banks, said it has issued seven bln yuan worth of fixed-rate two year debt on the interbank market today. In a statement published on the official Chinabond website, the bank said the yield was fixed at 2.9 pct through an auction.

**Baosteel's chairwoman is currently discussing the possibility of Nippon Steel taking a strategic stake in the company, a Baosteel spokeswoman told XFN-Asia.

**China Merchants Bank, the country's sixth-largest lender, said it will seek to compete via the credit card business, in a bid to offset its weak branch network relative to State-owned banks, the official China Daily reported.

**Intel Corp is likely to set up a stand alone branch for its China operations as early as next January, which will report directly to the US-based firm's global headquarters, state media reported.

**CNOOC, the country's largest offshore oil producer, has signed a cooperation memorandum with KOGAS, South Korea's biggest LNG importer, the China Business News reported. The two companies will cooperate on LNG, gas field exploitation and human resource management, the report said.

**Citigroup Inc said it plans to incorporate its China operations locally as soon as regulators allow, in order to meet a government requirement on the conduct of local currency retail banking, the Wall Street Journal cited a company spokesperson as saying.

**China Eastern Airlines Corp Ltd, one of the country's top three carriers, said it has raised its state share offer to 3.2 bonus shares for every 10 tradable A-shares held under its state share sale plan, from 2.8 shares previously.

**Telefonica SA continues to seek investment opportunities in China, after its attempt to take an 8 pct stake in PCCW Ltd was blocked by minority shareholders yesterday, Cinco Dias reported, citing unnamed sources close to the operation.

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