Based on the recent economic data that came out of China today, we can’t help but have a sense of optimism that the series of rate cuts done by the PBOC, the country’s central bank, and several measures to encourage borrowing, spending and investment such as the reduction in the reserve requirement on bank deposits, are filtering into the real economy. But stocks were flat after a recent rally that propelled the country’s key indexes to seven-year highs. Read on..
China’s industrial output, retail sales both rise in May. Industrial output was up 6.1% in May from a year earlier, above the 6% forecast and higher than the previous month’s 5.9% gain. Retail sales, meanwhile, inched up to 10.1% from 10% in April. Financial Times (paywall)
Chinese credit is better than forecast. The broadest measure of the country’s credit called aggregate financing reached 1.22 trillion yuan ($197 billion) in May, above the 1.13 trillion yuan estimate in a Bloomberg survey. Fresh loans hit 900.8 billion yuan, better than the 850 billion yuan forecast. The credit expansion is a sign that the central bank’s rate cuts are now having an impact on the economy. Bloomberg
China’s property investment rose at its slowest pace in six years. Investments in real estate rose 5.1% in January-May from a year ago, down from 6% in the first four months, though a separate data on floor area of property sold showed signs of recovery in the property sector. Reuters
The war of the Chinese firms. State-owned Industrial and Commercial Bank of China (ICBC) and Citic Trust are engaged in a tussle over two failed high-yield trust products that left investors owed 500 million yuan ($80.6 million). CITIC issued the trusts and were sold and marketed by ICBC. When the products fell due in March, the ultimate borrower — Shanxi Guye Industrial Group — was not able to pay investors. Now, ICBC and Citic were arguing over who should shoulder the unpaid debt. Reuters
Chinese shares mixed, Hong Kong slightly up. The Shanghai Composite Index closed up 0.3%, while the CSI300 index slipped 0.1%, as losses in banking counters offset gains in consumer stocks. The Hang Seng Index was up 0.8%. Reuters
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