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The day's top China business headlines
October 22, 2018
Chinese markets rally following bullish statements from officials Mainland China’s key stock indices gained significant ground over the weekend, shortly after high-ranking policymakers responded optimistically to downbeat GDP figures on Friday. The Shanghai composite jumped over 4% on Monday, peaking at 4.5% during earlier trading to close at around 2654.88. The tech-heavy Shenzhen composite similarly gained 4.9%, after double-figure losses during a chaotic past few weeks. China’s economic growth slowed to 6.5% year-on-year from 6.7% during the previous three months – the lowest figure in the decade since the global financial crash. Eager to prop up market sentiment, authorities doubled down on their confidence to reach annual targets and hinted at further steps to energise the economy. Many market watchers are not so optimistic when it comes to the value of Monday’s rally, however. “Eventually, at the end of the day, fundamentals will still rule,” Vasu Menon of OCBC Bank told CNBC. “You see a rebound today, but does it mean that the markets have turned a corner and you know, will hit higher? I’m not sure. I don’t think so.”
China promises more tax cuts in 2019 An adviser to the People’s Bank of China has said another round of hefty tax reductions could be on the cards for 2019, as Beijing vows to follow through on plans for a more proactive fiscal policy. Growth in the world’s second-largest economy has slowed to the lowest pace since the global financial crisis a decade ago, prompting policymakers to consider stimulus measures to stimulate flagging domestic demand. Tax cuts lined up for next year could exceed 1% of GDP, said Ma Jun. Reuters calculates that such a rate would equal over Rmb 827 billion ($119 billion). Beijing has already forecast at least Rmb 1.3 trillion of tax reductions for this year. Finance Minister Liu Kun said in September that there are plans to broaden the cuts even further in coming years.
China’s SMEs losing confidence, says Standard Chartered An index tracking the sentiment and performance of small- and medium-sized enterprises in China dropped in October, with firm heads saying the impact of a cooling economy was beginning to trickle down. London-based bank Standard Chartered found that strains on sales and production were now exacerbating previous concerns of slowing demand and trade war threats, pushing down the headline reading from 55.6 in September to 54.5 last month. A reading of fifty indicates no growth in the sector. The survey also should that investment and hiring by smaller firms was cooling, reflecting a less optimistic outlook for the economy’s near-term future. Many firms reported constraints from tighter financing conditions and expressed hopes for further stimulus measures from Beijing.
Chinese property insurer delays IPO as market turmoil continues

The People’s Insurance Company of China (PICC), China’s leading property insurance company, has downsized and delayed its planned initial public offering on the A-share market due to the turbulence currently roiling the country’s stock market, Bloomberg reports.

PICC will offer 1.8 billion A-shares, down from 2.3 billion, and will only proceed with the offering at the “optimal time in light of market conditions,” the company told the Hong Kong stock exchange in a statement Monday.

The IPO would raise around $863 million, making it the third-largest in China this year after Foxconn Industrial Internet Co and Shenzhen Mindray Bio-medical Electronics.

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