The consumer inflation numbers for November were released today, and, as the producer price index hinted yesterday, they’re down to their lowest level in almost two years (2.4% year-on-year for the month). That should give policy makers an extra hand to work the levers of the economy to encourage growth, though economists continue to fret over potential deflation. Others are worrying as well: The trade statistics released yesterday may have influenced investor sentiment, as the Shanghai Composite Index fell 2.3% to 2,031.68.
A survey of Chinese CFOs by Duke University and CFO Magazine found that moods have soured quite a bit in the last three months – 78.4% were less sanguine about China’s economy than in September, and 65.1% had lower expectations for their own companies’ prospects. The surveyed group estimated an average drop in capital expenditure of about 4.4% over the next 12 months.
But Nissan has a rosier view of the situation. The head of manufacturing and sales at Nissan’s JV with Dongfeng Motor said the global slowdown has had a limited effect on China, and expects his company’s car sales to grow by a healthy 15% next year.
The State Administration of Foreign Exchange granted China Construction Bank a US$10 billion quota for financial guarantees to companies involved in cross-border deals, while rival Big Four lender Bank of China’s plan to invest US$342 million in French fund manager La Compagnie Financiere Edmond de Rothschild may have to be delayed as it hasn’t received official approval. Presumably this has nothing to do with China’s increasingly rocky relationship with France. The French embassy in Beijing’s website was allegedly attacked by hackers this week following Nicolas Sarkozy’s meeting with the Dalai Lama last weekend, prompting China’s foreign ministry to deny any involvement.