Manufacturing Slows Sharply in June
China's economy has taken another hit as the official purchasing managers index – a gauge of manufacturing activity – fell to 50.1 in June from 50.8 a month earlier, according to joint figures from the National Bureau of Statistics and the China Federation of Logistics and Purchasing. The situation is in line with HSBC's China PMI data, which dipped by 1 point from May to a 9-month low of 48.2 in June. A reading below 50 indicates manufacturing output contracts compared with a month ago. HSBC analyst Qu Hongbin said that fewer export orders and mounting inventory were behind the decline in the PMI, and that rising funding costs for small and midsized businesses following the recent credit crunch would add to economic sluggishness and lead to the PMI running low.
China Eyes Greater Financial Market Reform
China will step up the development of an in-depth bond market by expanding RMB-backed bond issuance by domestic institutions and encouraging onshore RMB-backed bond issuance by high credit-rated international institutions, central bank governor Zhou Xiaochuan said at the Lujiazui Financial Forum last Friday. Zhou also said the central bank planned to allow more foreign institutions into China's interbank money market to expand the RMB's trading volume and the currency's onshore and offshore markets.
Big Developers Unscathed from Credit Crunch
The recently strained credit in China will not affect major property developers as they secured enough credit facilities in the beginning of the year and have not drawn on credit lines, CCB International says in its latest China Property report, adding that smaller developers will definitely be hit. The report also says a key downside risk to China's property sector is a surge in new home prices in the largest cities because this could trigger further policy curbs and credit tightening and might cause panic selling.
Home Prices Rise 10% in Top 10 Cities
Home prices in China's 10 largest cities averaged 17,376 per square meter in June, up 1% month on month and up 9.9% year on year, according to the China Index Academy. In a broader market, the average price of the 100 largest cities was 10,258 per square meter, up 0.8% month on month and up 7.4% year on year. It was the 13th straight month that the price saw month on month gains.
Minimum Wage Updates
Some provinces raised minimum wage July 1, 2013. Here are the updates.
Region / Monthly / Hourly / Effective
Shanghai: 1,620 / 14 / April 2013
Shenzhen: 1,600 / 14.5 / March 2013
Guangdong: 1,550 / 15 / May 2013
Xinjiang: 1,520 / 15.2 / June 2013
Tianjin: 1,500 / 15 / April 2013
Jiangsu: 1,480 / 13 / July 2013
Zhejiang: 1,470 / 12 / January 2013
Beijing: 1,400 / 15.2 / January 2013
Shandong: 1,380 / 14.5 / March 2013
Liaoning: 1,300 / 13 / July 2013
Shanxi: 1,290 / 14 / April 2013
Henan: 1,240 / 11.7 / January 2013
Jiangxi: 1,230 / 12.3 / April 2013
Guangxi: 1,200 / 10.5 / February 2013
Gansu: 1,200 / 12.7 / April 2013
Sichuan: 1,200 / 12.6 / July 2013
Shaanxi: 1,150 / 11.5 / January 2013
Guizhou: 1,030 / 11 / January 2013
Note: Shanghai and Beijing's monthly minimum wages do not include employer's contribution to an employee's social welfare account, which is compulsory in Shanghai but not in other regions.
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