Checked all the news feeds out of China, and there’s not much to report of major interest. Seems like the world has shut down as the East Coast enjoys a Christmas like last long weekend of the summer.
Here’s what’s happening in China:
There was almost no movement in the major China indexes today with the Shanghai A shares down .46%, and the B shares up .02%.
BIDU has been on a tear of late, but lost about 6 points from yesterday’s high thanks to a report by something called the Bedford Group suggesting China internet firms are under attack from their own government, and censorship is wide spread. They also suggest the censorship might help those big boys by eliminating some of the small competition. The stock has been on a tear of late, but is down 6 points from yesterday’s high of $151.
China manufacturing rebounded slightly in August, put costs were higher as well. The HSBC purchasing manufacturers index rose to 49.9 from 49.3. At the same time, new exports fell from 50.4 to 48.3. On these indexes, readings under 50 suggest contraction- over 50 is expansion. As a perfect reflection of the rest of the world, China export numbers suggest we are teetering at the brink of recession vs expansion. I suspect this will be the slowest period as the global news flow has to be slowing expansion appetites.
In a move I believe shows China’s commitment to help their rapidly expanding consumer class, the Chinese government has decided to eliminate income taxes for 60 million people. This will increase disposable income for the poorest people in the work force. This will also help mitigate some of the social unrest that is brewing thanks to rising food costs in China.
China Daily reports a new study suggests consumer lending in China could triple by 2015 to $3.3 trillion. This requires annual average growth of 24%. In terms of new financial products in China, mortgages are #1 and credit cards are #2. Currently, there are about 230 million credit cards in China- with young card holders averaging 2.6 cards per person.
That’s it for today. This will pick up next week as Wall Street’s big boys get back to work.