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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (18193)	5/12/2007 9:24:00 AM
From: elmatador	Respond to of 220185

China to Let Banks spread capital more evenly by letting buy Stocks Overseas for First Time (Update3) Nothing new, TJ. Let me China mobile operators coming out with huge wheel-barrow of moolah to buy foreign companies. Let come with container loads of money to invest in Brazil's infrastructure and use the country as China farm and china mines By Luo Jun and Zhao Yidi May 11 (Bloomberg) -- China will let its banks buy shares overseas for the first time, diverting some of the country's 35 trillion yuan ($4.6 trillion) of savings from a local stock market where trading has surged sevenfold. Commercial banks can invest as much as 50 percent of funds in the qualified domestic institutional investors program, or QDII, in overseas stock markets, the China Banking Regulatory Commission said on its Web site today. Investors need at least 300,000 yuan to buy such financial products, the regulator said. This will help ``cool the very hot domestic stock market a bit,' said Gabriel Gondard, who oversees $3.5 billion in Shanghai as a fund manager at Societe Generale venture Fortune SGAM Fund Management. ``Don't expect it to trigger a crash. Investors are still reluctant to invest overseas with booming stocks and expectations of currency appreciation at home.' China wants more money to be invested abroad to slow the growth in the country's $1.2 trillion in currency reserves, which are flooding the domestic market with cash. Local investors have shunned QDII because they had been limited to lower yielding fixed-income and money-market products. ``The government is easing restriction on capital controls so that the central bank won't be the only institution to deal with the flood of foreign exchange coming in,' said Tao Dong, Credit Suisse Group's China economist. ``The QDII was introduced to help mop up excess liquidity in the system.' Bubble Trouble China's CSI 300 Index has surged 81 percent this year, after more than doubling in 2006, as investors seek higher returns than the 2.79 percent one-year savings rate at banks. The surge has prompted officials including People's Bank of China Governor Zhou Xiaochuan to warn of a stock market bubble. Daily turnover jumped almost sevenfold from 2006 to 131.6 billion yuan in the first three months, as investors opened 8.7 million new accounts to trade shares, the People's Bank of China said in its first-quarter monetary policy report yesterday. The market boom and improving social security protection will boost spending in an economy that expanded 11.1 percent in the first quarter, according to the report. The government has granted a total of $13.4 billion in QDII quotas to 15 commercial banks. At the end of November, Chinese banks sold less than 3 percent of their QDII quotas. U.S. 10-year government bonds are yielding 4.62 percent a year, while the yuan has appreciated 4.3 percent against the dollar in the past twelve months. Yuan Pressure Expanding QDII may reduce pressure on the yuan to appreciate. The currency this week had its biggest gain since the end of a fixed dollar link in July 2005 and the U.S. is pressing China to let the currency rise more quickly. The regulator's move ``will enable investors to have a more diversified investment portfolio and better manage risks,' said Zhang Junyong, who runs Bank of China Ltd.'s QDII fund in Hong Kong. Hong Kong's stock market may be the biggest beneficiary, said China International Capital Corp. Chief Economist Ha Jiming. ``Hong Kong is the most natural starting point as the QDIIs are most familiar with the Hong Kong market, especially the Chinese companies listed there,' he said in a phone interview today in Beijing. ``It will be positive news for H shares,' as Hong Kong-traded Chinese stocks are called. The Hang Seng China Enterprises Index has gained 0.5 percent this year, lagging behind the 19 percent advance by the benchmark Hang Seng Index. Banks are still banned from investing in hedge funds, commodity derivatives and securities rated below investment grade, the banking regulator said. Individuals will still be barred from investing directly overseas. To contact the reporter on this story: Luo Jun in Shanghai at at jluo6@bloomberg.net

To: TobagoJack who wrote (18193)	5/13/2007 9:07:17 AM
From: elmatador	Respond to of 220185

CHINA'S low-cost labour could start shrinking by 2010, a state press report said Saturday China faces labour shortage in 2010 SHANGHAI 13-May-07 CHINA'S ample supply of low-cost labour, one of the mainstays of China's remarkable economic transformation, could start shrinking by 2010, a state press report said Saturday. "China is moving from an era of labour surplus into an era of labour shortage," the China Daily reported, citing the Chinese Academy of Social Sciences, the nation's key government-run research institute. China 1.3 billion people constitute the globe's most populous country but the new study said its massive rural labour force, that has spearheaded the nation's roaring growth, may have been poorly estimated. The number of unemployed workers below the age of 40 in rural areas that migrate in search of jobs is only about 52 million, far below previous estimates of 100 to 150 million, according to the institute. The shortage will eventually trigger a demand for higher wages, possibly as soon as in three years, it said. Rising labour costs would in turn go right to the nation's economic heart as foreign investors forsake the world's factory floor for cheaper workers elsewhere. While it was too early to judge whether more expensive Chinese labour would become less competitive, the nation needs to start making adjustments now, said Cai Fang, a labour economics expert and chief researcher of the study. "The country needs to change its growth mode from relying solely on one production factor (labour) to advanced production methods," Cai said. The report pointed to the recent worker shortages in the southern hub of Guangdong that has long relied on labour-intensive industries to compete in global markets. "The phenomenon is spreading gradually from coastal areas to central China or even some provinces that boast huge labour surpluses," said Cai. In an unrelated development, state press yesterday reported that the China Securities Regulatory Commission stock market professionals to take more responsibility to alert the public to the risks of investments. Financial institutions must caution investors on risks of the market to prevent irrational behaviour of "reckless and blind" investments, the Xinhua report said, citing the regulator. "Some investors are using pension savings or pawn their properties to speculate on stocks. They must be warned and remember funds essential for living should never be put into risky investments," it said. AFP