Wednesday, June 13, 2012

Cleaning up China's stockmarkets: Access China newsletter

Cleaning up China's stockmarkets
It has been difficult for stockmarket investors to benefit from the growth of China's economy. China's capital controls have helped to keep its securities markets almost hermetically sealed from the outside world, and behind the wall corrupt practices have flourished, undermining the confidence of local investors in domestic stockmarkets. With the Chinese authorities aiming to turn Shanghai into a global financial centre by 2020, capital controls will be gradually relaxed. Corrupt practices will be difficult to eliminate, but a recently renewed focus on improving pricing procedures for new listings and other oversight measures will help to improve confidence.

Power up: massive investment in China's power grid
Massive investments are being made in China's power grid, as the government seeks to assure more dependable power supplies in the industrial east of China. Massive investment in key infrastructure projects should provide opportunities for equipment manufacturers, and could also position China well in the advanced power equipment market globally. Investments in smart grids as well as the adoption of newer power transmission technologies could put China in a leading position in this sector.

Provincial economic update

The latest updates from our monthly economic review report on China's regions:
  • Real GDP growth in China slowed to 8.1% year on year in the first quarter of 2012, from 8.9% in the last quarter of 2011. The aggregate growth rate for the provinces fell to 10.1% in the first quarter, from 11.7% in the previous quarter.
  • The more-developed areas are being hit hardest. Zhejiang, Guangdong, Shanghai and Beijing all saw their GDP growth rates dip below 8%.
  • The fastest-growing provinces, nearly all in western China, also saw growth slow from the previous quarter. But they remained relatively robust, recording average growth of above 13%.

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