China’s stocks fell yesterday, dragging the benchmark index down to the lowest level since March 2009, after an index of leading indicators signaled a slowdown in the world’s second-largest economy.
Anhui Conch Cement Co (安徽海螺水泥) led declines for industrial companies after the Conference Board’s leading index fell in October.
Poly Real Estate Group Co (保利地產), China’s second-largest developer by market value, dropped 2.1 percent after the government affirmed it would maintain a campaign to curb property prices following an annual economic conference that sets the policy tone for next year.
The Shanghai Composite Index dropped 20.07 points, or 0.9 percent, to 2,228.53 at the close, the lowest level since March 2009 and a fifth straight day of declines. The CSI 300 Index fell 1 percent to 2,397.48.
The leading index declined 0.1 percent to 160.1 in October, the Conference Board said yesterday in a statement, citing a preliminary reading.
The gauge captures prospects for the next six months, the New York-based research organization said. In September, it rose 0.4 percent.
“The risk of a more substantive slowdown in China’s economic growth than anticipated so far is rising,” Andrew Polk, an economist at the Conference Board, said in the statement.
“Targeted loosening of credit markets” should give some help to companies, “but the pass through from previous policy tightening measures will continue to act as a brake on the economy,” he said.
China’s expansion slowed to 9.1 percent in the third quarter, the least in two years, after the government raised interest rates, tightened credit and expanded property-market curbs.
Housing transactions declined in 27 out of 35 cities last week, according to Soufun Holdings Ltd (搜房網), the operator of the nation’s biggest real-estate Web site.
China’s economy will grow 8.5 percent next year, the least in 11 years and down from 10.4 percent last year, according to the Organisation for Economic Co-operation and Development (OECD).
The Conference Board leading index’s components include loans, raw-material supplies, export orders, consumer expectations and floor space started, from data released by the central bank and the statistics bureau.
First published in May last year, the gauge has successfully signaled turning points in China’s economic cycle if plotted back to 1986, according to the Conference Board.
Meanwhile, China’s leaders affirmed they would stick next year with a campaign to bring down property prices even as a “very grim” global outlook threatens growth in the second-largest economy.
The nation would target “basically stable” consumer prices and “unswervingly” implement real--estate curbs, according to a statement after an annual economic planning meeting in Beijing.
At the same time, officials would seek “steady and relatively fast growth,” Xinhua news agency said.
“The authorities are cautious about a premature or aggressive easing of policy, while committed to be pre-emptive and flexible to roll out supportive policies if needed,” said Chang Jian (常建), a Hong Kong-based economist at Barclays Capital, who formerly worked for the World Bank. “The policy focus will be shifting from managing inflation to supporting growth.”
Yesterday’s statement did not include wording from last year, that stabilizing prices would take a “more prominent position” in policies.
Inflation has cooled from a three-year high of 6.5 percent in July. Concerns highlighted this year included “latent risks” in the economic and financial systems.
In China, the theme for next year is “progress amid stability,” a statement carried by Xinhua said. “Stability means to maintain macroeconomic policies basically stable, maintain steady and relatively fast growth, keep overall price levels basically stable and maintain social stability.”
Policies will be fine-tuned as needed and the nation would press on with economic reforms, the Xinhua statement said.
The global outlook “remains very grim” with China facing pressure for growth to slow and prices to rise, operational difficulties at some companies and “a grim situation in energy saving,” it said.
China would speed construction of “ordinary commercial residential housing” and seek to return home prices to a reasonable level, the statement said.
The yuan’s exchange rate would be kept “basically stable,” it said.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is