Shanghai Economy Overtakes Hong Kong, Asian Shares Rise

For the first time in about 30 years, the size of Shanghai’s economy has surpassed Hong Kong’s, according to a report in Business Week. While China is still the world’s third largest economy, stimulus measures helped pump Shanghai’s GDP up 8.2%, while Hong Kong actually suffered a 2.7% decline, according to Bloomberg’s data.

China Indicator Shows Growth Quickening

A Chinese leading indicator climbed, adding to evidence that the world’s second-biggest economy is maintaining momentum as Premier Wen Jiabao extends a campaign to cool inflation.

The index rose 0.5 percent to 155 in May, The Conference Board said on its website today, citing a preliminary reading. The gauge is designed to capture prospects over the coming six months. April’s index was revised to a 0.1 percent gain from a previous 0.2 percent increase.

China, the world’s fastest-growing major economy, may expand more than 9 percent this year, even after the central bank boosted interest rates and controlled lending to cool the quickest inflation in three years in June. Growth may be strong enough to withstand more monetary tightening as local governments raise spending on low-cost housing and manufacturers build more factories in inland provinces.

China’s February Foreign Direct Investment Increases 32.2%

Foreign direct investment in China climbed in February, indicating investor confidence in the world’s second-biggest economy.

Investment rose 32.2 percent to $7.8 billion last month from a year earlier, the Ministry of Commerce said in a statement on its website today. That compares with a 23.4 percent gain in January.

Raising wages and reducing income inequality will be among the government’s top tasks in the next five years as the nation switches the focus of growth to consumption from investment, Wen said on March 5.

Foreign investment in the first two months rose 27.1 percent to $17.8 billion, the commerce ministry said today. The number of newly approved foreign-invested companies in the first two months of the year rose 7.5 percent from a year earlier to 3,399, according to the statement.

Get set to invest in the new China

China’s latest five-year plan should lead to a much larger consumer economy and plenty of new investing themes. Here, I give you 10 stocks to consider.

Meet the new and improved China. The government released the draft of its next five-year plan. The plan includes soaring goals written by numbers of bureaucrats. It also commands the uncommandable, such as improved democracy.

This latest plan lays out a major shift in the Chinese economy. It calls for slower growth, increased domestic consumption, cuts in water and energy consumption per unit of GDP, a shift toward a service economy, an increase in urbanization and a 13% annual increase in the minimum wage.

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