China Unveils 'Mini Stimulus'
China has announced a small-scale stimulus to bolster growth as the nation restructures its sputtering export-dependent economy. Limited in size compared with the 4 trillion yuan package introduced in late 2008, the latest stimulus will give tax breaks to small businesses, cut costs for exporters and provide funding to railway projects. A fiscal stimulus had been expected since China's new leadership took office in March but it was not unveiled until Wednesday. Market watchers say this is the strongest indication yet of the new leaders' concern about the slowdown and resolve to deepen economic reforms. Premier Li Keqiang has reiterated 7.5% is this year's bottom line GDP growth target.
Top 4 Banks Hold Back Lending
China's 4 biggest state-owned banks extended 220 billion yuan in loans in the first 3 weeks of July, meaning they have significantly slowed down the pace they lent money as they reportedly lent 170 billion yuan in the first week alone, the Shanghai Securities Journal reported. The main reason behind the slowdown was deposits with the four banks decreased by over 1 trillion yuan during the 3 weeks. Analysts say shrinking deposits will continue to weigh on liquidity, and total lending is expected to fall to 600 billion yuan in July.
China to Sell 21.5 Million Vehicles in 2013
Auto sales are to grow 11.4% to 21.5 million units in China in 2013, BOCOM International predicted in a research report. This growth rate is well above the 4.3% in 2012, but is slower than in 1H 2013 due to a larger base and possibly car purchase restrictions in more cities. The continuous growth of China's auto market is drive by 1) auto replacement, which will benefit SUVs and luxury vehicles, 2) expansion of the after-sales services market, which will benefit the dealers, and 3) expansion of the secondary market, which will benefit both the auto makers and dealer, according to the report.
Insurance Premiums Exceed 950 Billion Yuan in 1H
China's premium incomes from insurance policies totaled 951.24 billion yuan in 1H 2013, including 555.66 billion yuan from life insurance, 312.67 billion yuan from property insurance, 58.65 billion yuan from health insurance and 24.27 billion yuan from casualty insurance, according to the China Insurance Regulatory Commission. Assets of the insurance industry amounted to 7.88 trillion yuan as of the end of June 2013, up 7.2% from the beginning of the year.
China Clears 8.5 Billion Yuan of Highway Debts Issuance
Hubei Provincial Transport Investment Co has been given regulatory approval to issue 8.5 billion yuan worth of corporate bonds, the largest of its kind in China's highway sector, the Hubei Provincial Development and Reform Commission said. The company said bonds will be issued in two tranches, with the first tranche of 4 billion yuan to be sold with maturities of 10 or 15 years. The National Development and Reform Commission approved the issuance of almost 800 billion yuan in corporate bonds last year. In the year to date, 321.75 billion yuan in corporate bonds has been issued, compared with 335.5 billion yuan during the same period of last year.
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