Chinese shares remain weak with shrinking turnover China's economy able to expand over 8% for long time

China shares up 2.5 pct on index futures trading comment

2008-05-28

BEIJING, May 28 -- Chins Shares performed strongly on Wednesday, gaining about 2.5 percent, as sentiment was buoyed by a regulator's comment that stock index futures were about ready to begin trade.

The news particularly benefited brokers and a range of non-financial companies that have holdings in futures-trading companies.

A senior official with the China Securities Regulatory Commission said on Wednesday morning that after two years of preparation, index futures were "ready for market."

Analysts with Guotai-J&A said that the start of stock index futures would benefit brokerage firms.

The benchmark Shanghai Composite Index closed at 3,459.99 points, up 84.58 points, or 2.51 percent. The Shenzhen Component Index ended at 12,330.16 points, up 331.79 points, or 2.77 percent.

Combined turnover climbed to 100.8 billion yuan (14.6 billion U.S. dollars) from the previous day's 83.78 billion yuan, reflecting a recovery of investor confidence.

Among futures-related stocks, Northwest Chemical, New Huangpu, Dazhong Transport, Jiangsu Shuntian, Zhongda Holdings, Hongye Holdings and Xiamen International Trade rose by the daily limit of10 percent. These companies hold stakes in futures-trading operations.

Brokers' shares gained more than 6 percent on average. For example, CITIC Securities rose 6.16 percent to 34.31 yuan and Changjiang Securities went up 6.98 percent to 24.36 yuan.

All heavyweights rose steadily.

Sinopec, China's largest oil refiner, gained 4.49 percent to 12.79 yuan, PetroChina, the nation's biggest oil producer, went up2.14 percent to 17.63 yuan, and China Ping An, a leading life insurer, up 3.26 percent to 55.8 yuan.

On Wednesday, the Hushen 300 Index reflecting the performance of both the Shanghai and Shenzhen stock exchanges closed at 3,676.23 points, gaining 100.03 points from the previous close.

Gains outnumbered losses by 779 to 51 in Shanghai and 621 to 40in Shenzhen.

Macro-Economy

China's economy able to expand over 8% for long time

2008-05-28

BEIJING, May 28 -- China's economy can maintain a steady growth above 8 percent for a relatively long period because of a stable society, a vast market and ample capital, said Cheng Siwei, an economist and former vice chairman of the Standing Committee of the National People's Congress.

"China's economy can stay in the fast developing track if we work hard and pay enough attention to existing problems," Cheng said at a three-day forum with the theme of "Economic globalization and the choice of Asia: transition, growth and welfare" Wednesday in Shanghai.

"Social stability is crucial to economic development while China has a market of 1.3 billion people, which creates a huge consumption power," said Cheng. "Meanwhile, China's foreign reserves have reached US$1.68 trillion, and it has built up an ample capital pool."

China also beefed up its efforts to improve education and expand its coverage, which paved the way for sustainable economic development, he said, but added that there were problems China could not afford to ignore.

One of them was the yawning gap between the rich and the poor. The income of urban residents has tripled that of rural households while the purchasing power in cities was four times larger than that in rural areas.

China faced increasing pressure to protect the environment and in securing raw materials and resources for its economy. It also lacks a large pool of senior professionals in finance and management.

"For example, we buy a lot of the United States treasury bonds. It means appointing them (US bond managers) to manage our assets and we only gained a little bit of interest," said Cheng. "We are trying to work on such problems."

Cheng estimated China's per capita GDP can reach US$3,000 by 2010, US$5,000 by 2020 and US$10,000 by 2049, given its economic expansion and a stronger yuan.