Posted on Monday, 4 October 2010 [GMT+1]
There’s an old Chinese proverb which says something like “better to do a good deed near home than to go far away and burn incense”. But is Premier Wen clever enough to do both?
Currently he is in Europe, and began with a visit to Greece on Friday and the weekend; thereafter, he moves on to Italy, Belgium and Turkey. Wen is also the first Chinese Premier to visit Greece for 24 years and, here, he signed a co-operation agreement on tourism, infrastructure, technology and shipping. He also said that China will buy Greek bonds when the Nation begins tapping the international markets again. On the larger European pitch, an increasingly sure-footed Wen said that China supports a stable Euro and will not reduce its holdings of European bonds. “We are passengers in the same boat”.
Simultaneously, on Sunday, CNN screened an interview which Wen gave in New York on 23 September. Here, he focused, primarily, on domestic affairs and said that China realises that it has structural issues in its economy and that the Government will be taking steps to stimulate domestic demand; whilst also being especially vigilant on both inflationary pressures and corruption. However, he also underlined the success of Government spending in China and its role in “the continuance of steady and relatively fast economic growth”. Since then, manufacturing, in September rose at its fastest pace in four months and, on Saturday, another PMI survey showed that non-manufacturing also gathered momentum in September with construction particularly strong; its sub-index rose 3.6 points to 69.5. Real estate did well, too, although it is also reported that Shenzen has introduced greater restrictions on home purchases, while in Beijing, Suzhou and Hangzhou, unit sales in the second hand housing market tanked in early October. That said, in Hong Kong, its two largest developers sold $1.42 billion worth of homes over the National Day holiday weekend.
In other news, the biggest is Sinopec’s $7.1 billion investment in Repsol’s off-shore oil unit in Brazil. Meantime, closer to home China is being nice to both Korea’s, whilst its relationship with Japan has ameliorated. Finally, Taiwan has raised its benchmark interest rate by 0.125 to 1.5% to cool its real estate sector.
“Zeal without knowledge is a runaway horse”
Shanghai Composite:
Today: closed for National Day holidays
Thursday: +1.72% at 2,655.66 at close
Last week: +2.5%
YTD: -18.9%
Hang Seng:
Today: +1.17% at 22,618.66 at close
Last week: +1.1%
YTD: +3.4%
Oil futures: $81.48
Gold futures: $1320.80
(new immediate delivery ‘high’ on Friday of $1320.70)
Euro/$ spot: 1.3772
Headlines
- Wen visits Greece to sign co-operation deals and display confidence in EU
- China supports stable Euro and will not reduce European bond holdings, said Wen
- China will stimulate more domestic demand, says Wen
- China non-manufacturing PMI rises in September on demand for construction
- Shenzhen introduces restrictions on home purchases, reports the SCMP
- Beijing second hand home sales fall
- Nomura stakes “cautious” stance on China property; with 5-10% price falls by year-end
- Cheung Kong and Sun Hung Kai sell more than $1.42 billion of homes in Hong Kong
- Sinopec invests $7.1 billion in Repsol’s Brazil unit to tap off-shore fields
- Hu says China will boost ties with new North Korean leaders, says Xinhua
- China triples holdings of South Korean Government bonds to $4.6 billion
- China calls on Japan to maintain diplomatic relations
- Taiwan raises key rate as it seeks to restrain property speculation
- China hosts 200 nations in climate change meetings in Tianjin, says the SCMP
- France denies Financial Times report of secret talks with China on the co-ordination of currency
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