Whats Marinating in China 03.04.10 $CIC

·         China’s CIC played down on Thursday the chances of the fiscal problems of some European countries turning into a full-fledged crisis.  "In my personal view, the fiscal deficit of these countries is a little bit too high, but the possibility that it could develop into a major risk or a crisis is very small,"   Reuters 

·         China’s CIC says its investment strategy in ’10 will be “more flexible” as global markets have yet to reveal a clear trend.  CIC’s cash holdings are “relatively low” after using most funds for investments abroad last year – Bloomberg 

·         ICBC lending growth rate to fall 50% in ’10 - Outstanding credit is targeted to increase 22 percent to 855 billion yuan ($125 billion) this year compared with 40 percent growth in 2009 – Bloomberg 

·         China - China says it will boost its defense budget by 7.5% this year, the first time in more than 15 years it has announced less than a double-digit percentage increase (WSJ) 

·         China yields fall on liquidity and commentary - a deputy central bank governor said China can prevent inflation from spinning out of control this year and is confident of containing inflation expectations.  Also - A massive 776 billion yuan ($114 billion) of bills and repos will mature in March. This comes on the back of a net 222 billion yuan central bank injection via open market operations in February to ease a funding squeeze ahead of last week's Lunar New Year holiday.  Reuters 

·         China - the state-run China Daily reported Wednesday that China's banking regulator has ordered the nation's lenders to restrict credit to local government projects while increasing lending to private businesses - Marketwatch

·         China labor market outlook – from JPMorgan’s Q Wang - Recent labor shortages and wage increases driven by both temporary and long-term factors; Labor is no longer cheap, but unit labor cost is stable with the aid of improving labor productivity; This, along with producers’ weak pricing power, suggests rising wages unlikely to lead to a spike in CPI.  

·         China port operators based in northeastern China rallied after the National Business Daily said the government has submitted a plan to boost coastal development in the region – Bloomberg

·         China’s government plans to set aside funds for investment in strategic and emerging industries such as information networks, new materials, life science, aerospace, and ocean and earth sciences, the Shanghai Securities News reported today – Bloomberg 

·         China’s local governments will be allowed to sell a combined 200 billion yuan ($29 billion) of bonds this year, the same amount as last year, the Oriental Morning Post reported on its Web site today – Bloomberg 

·         China's official purchasing managers' index for non-manufacturing sectors plunged to a one-year low at 46.4 in February from 55.1 a month earlier, the China Federation of Logistics and Purchasing (CFLP) said on Wednesday.  It was the first time that the index fell below the boom-bust line of 50 since February 2009, when the index hit a record low of 41.9.  China Daily. 

·         Hong Kong – Jan Retail Sales Rise Less than Expected. +6.6% vs. St. 9.1%