China Cuts Interest Rate Again
On rate cuts, China is moving in sync with the rest of the world.
China's central bank cut its benchmark interest rate by 27 basis points on Wednesday, after a coordinated rate cut took place in several major economies of the world. This is China's second rate cut within a month. Now the one-year lending and deposit rates stand at 6.93% and 3.87%.
While the rate cut is insignificant in magnitude, the move has indicated China's willingness to join the global financial community as a stakeholder to tackle the current crisis. With reliance on export-driven growth and significant holdings of U.S. Treasury bills, China has found itself increasingly integrated into the global economy.
Besides the rate cut, China has also suspended the 5% tax on interest income for individuals.
The Chinese equity markets declined alongside the rest of the world. For the past five days, the Shanghai Composite Index slumped by 14.7% to 2,000, while the Shenzhen Composite Index dropped 11.9% to 6,758. The stabilization measures from the government, including interest-rate cuts and suspension of tax on interest income, were unable to restore investors' confidence under the current circumstances.
Insurer Ping An Writes Down Fortis Investment
Ping An recently said it intends to write down its investment in Fortis by approximately CNY 15.7 billion ($2.3 billion) in its third-quarter results. Ping An has bought a 4.99% stake in Fortis since last year, but it recently called off its plan to buy half of Fortis' asset-management unit.
China Merchants Bank Opened First U.S. Branch in New York
The branch targets Chinese companies investing in America, U.S. companies with branches in China, and local companies dealing with China-U.S. trade. China International Marine Containers and China Ocean Shipping Company have become the bank's first customers. Before this, China has not opened a new bank branch in the United States for 17 years.
China Cuts Jet Fuel Prices by 7% for the Fourth Quarter
China's energy regulator and civil aviation authorities have lowered the jet fuel price to CNY 7,750 ($1,132) a ton for the next three months. Such prices have been adjusted quarterly to reflect price changes in the international market.
Survey on C2C Trading Shows Online Store Owners Struggle to Make Money
According to China's first-ever survey on online traders' income, China's C2C sites had created 420,000 jobs as of September, but only a quarter of the online store owners or employees earn more than CNY 2,000 ($292) a month. More than 40% of them fell into the CNY 800-1,500 range. Only 1.3% made more than CNY 6,000 a month. The number of online store owners on China's three major C2C sites, taobao.com, paipai.com, and eachnet.com, hit 1.17 million, with taobao.com attracting the majority with 1.05 million.
Chinese Online Gaming Market Expanded in Third Quarter
According to iResearch, the market grew by 52% year over year to RMB 5.5 billion in the third quarter. Shanda (SNDA) continued to take the lead with 15.7% market share, followed by NetEase (NTES) (11.7% share), Giant (GA) (9.9% share), Tencent (9.7% share), The9 (NCTY) (8.8%), Perfect World (PWRD) (7.1%), Jiuyou (6.8%), and Sohu (SOHU) (6.6%).
Monster (MNST) to Fully Acquire ChinaHR
Monster will pay $174 million in cash for the remaining 55% stake in privately held ChinaHR, the second-largest Chinese online recruiting site in terms of revenue.
Thanks for contributions from Iris Tan, Peter Liu and Feliz Li
Dan Su does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.