The Mainland China equity market closed higher on Thursday, 14 November 2019, as soft economic data reinforced expectations that Beijing will introduce fresh measures to support economic growth. However, market gains capped amid uncertainty around an anticipated initial China-US trade deal. At closing bell, the benchmark Shanghai Composite Index advanced 0.16%, or 4.63 points, to 2,909.87. The Shenzhen Composite Index, which tracks stocks on China's second exchange, was up 0.61%, or 9.83 points, to 1,624.13. The blue-chip CSI300 index added 0.15%, or 5.88 points, to 3,905.86.
China's industrial production, a measure of growth in sectors such as manufacturing, mining and utilities, expanded by 4.7% cent last month, down from 5.8% in September. In another piece of data released by China's National Bureau of Statistics (NBS) on Thursday, fixed asset investment, purchases of capital goods, real estate and infrastructure, grew by 5.2% in the first 10 months of the year, down from September's reading of 5.4%. Retail sales, a key metric of consumption in the world's most populous nation, grew by 7.2% in October from a year previous.
A Beijing-based think tank has become the first Chinese economic research institute linked to the government to predict that China's economic growth rate will slow below 6% next year. The National Institution for Finance and Development (NIFD) on Wednesday said that China's economic growth rate will slow to 5.8% in 2020 from an estimated 6.1% this year. This is at the bottom end of China's target range of 6 to 6.5% growth for 2019, and further indicates the continued downward pressure on the economy from the trade war with the United States as well as domestic headwinds.
In Sino-US trade deal, uncertainty about a potential deal between the world's two biggest economies remain on the table as President Donald Trump failed to offer many details about the trade talks in a speech on Tuesday.
President Trump said China had agreed to buy up to $50 billion in U. S. soybeans, pork and other agricultural products annually, but China is reluctant to put a numerical commitment in the text of a potential agreement. The dispute over farm purchases is one of several issues that have delayed completion of the limited trade accord announced by Trump and Chinese Vice Premier Liu He on Oct. 11. Both sides are also at odds over when and by how much the U. S. would agree to lift tariffs on Chinese imports. Chinese officials have also resisted U. S. demands for a strong enforcement mechanism for the deal and curbs on the forced transfer of technology for companies seeking to do business in China.
Shares of infrastructure-linked companies closed higher after the State Council said on Wednesday that it will lower the capital requirement ratios for some projects. The minimum capital requirement ratio for ports and shipping projects will be cut to 20 per cent from 25 per cent, and equity-backed financing can be used to fund construction of infrastructure projects, according to the cabinet. Zhejiang Chengbang, a landscape construction company, surged 5.7% to 9.70 yuan. Xinjiang Beixin Road and Bridge Group climbed 5.4% to 5.83 yuan and China Design Group added 2.3% to 10.18 yuan.
Hangzhou Hikvision Digital Technology dropped 2.5% to 33.37 yuan after the surveillance camera maker said two of its board directors were under regulatory probes for allegedly violating rules of information disclosures.
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