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China’s Xi Jinping spotlights Shenzhen as future for economic growth, Hong Kong given back seat

China’s Xi Jinping spotlights Shenzhen as future for economic growth, Hong Kong given back seat

China’s President Xi Jinping praised the tech-hub city of Shenzhen in a landmark speech on Wednesday, leaving some puzzling over the future of nearby Hong Kong, as China’s traditional global foothold.

Xi said Shenzhen, often dubbed China’s Silicon Valley and home to tech giants Huawei and Tencent, was making “historic leaps” and “achieving miracles.”

He also announced that the area would be given more leeway to pursue opening-up reforms and become a “model city for a strong socialist country.”

Once a small fishing village adjacent to Hong Kong, Shenzhen is now home to about 13 million and was transformed in 1980 by veteran Chinese leader Deng Xiaoping, after he designated it a “Special Economic Zone,” carving out capitalist privileges in the staunchly communist country.

Retracing Deng’s footprints 40 years later during his own southern tour this week, Xi announced Shenzhen would again become a testing ground for foreign investment and talent, and a symbol of China’s place as a global economic power, he said.

His speech follows a five-year plan for the city published on Sunday, to ease regulations including land reforms, encouraging foreign workers and reducing red-tape in sectors such as bio-tech and telecoms. The city will also pilot China’s first digital currency.

Analysts see the focus on Shenzhen, which now has a GDP higher than Hong Kong’s, as a signpost to how China intends to manage its dizzying economic growth — with strict political dominance, while nearby economic powerhouse Hong Kong becomes less relevant.

“The strategy is to submerge the Westernized Hong Kong with more powerful Chinese rule,” said Kent Deng, professor of Chinese economic history at London’s LSE University.

“Xi will not give the West an inch. He sees Hong Kong as a threat to his rule over China. The Shenzhen model is political zero tolerance and

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China’s stocks take a break after Monday’s rally vaulted market value past US$10 trillion as traders put Covid-19 in rear view mirror

China’s stocks take a break after Monday’s rally vaulted market value past US$10 trillion as traders put Covid-19 in rear view mirror

a close up of a street: Hong Kong’s financial district is deserted as the approach of Typhoon Nesat on 29 September 2011 emptied the streets. Photo: SCMP

Hong Kong’s financial district is deserted as the approach of Typhoon Nesat on 29 September 2011 emptied the streets. Photo: SCMP

China’s stocks declined in early trading, taking a respite after rallying by the most in three months, as investors assessed the strength of the economic recovery and the prospect of refresh US stimulus packages. Trading was halted in Hong Kong due to an approach by the tropical storm Nangka.

The Shanghai Composite Index dropped 0.5 per cent to 3,342.18 in early trading on Tuesday. It jumped 2.7 per cent a day earlier on expectations that the recovering in the Asian nation will gather pace and President Xi Jinping will unveil further reform measure in his trip to Shenzhen to mark the 40th anniversary of the economic zone in southern China on the doorsteps of Hong Kong.

China’s stocks top US$10 trillion as economy shakes off 2015 rout, Covid-19

The combined market values of the companies trading on the Shanghai and Shenzhen exchanges rose to US$10.04 trillion on Monday, surpassing the US$10 trillion mark for the first time since 2015. China is the world’s second-largest equity market after the United States.

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China is due to release the September data on exports and imports on Tuesday and the data on third-quarter economic growth will be released on October 19. Other markets in Asia were mixed as the US was still deadlocked over a new round of stimulus measures.

Hong Kong’s securities market has been halted from trading in the morning session after the local weather agency raised the typhoon signal to the third-highest level on early Tuesday, the market operator said in a statement.

The Hong Kong Observatory issued the No

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China’s Stock Market Tops $10 Trillion First Time Since 2015

China’s Stock Market Tops $10 Trillion First Time Since 2015

(Bloomberg) — Chinese domestic equities are worth more than $10 trillion for the first time since 2015, when a record crash erased half the market’s value in months and saddled millions of investors with losses.


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The world’s second-largest stock market has added $3.3 trillion since a low in March, helped by Beijing’s policies to encourage trading, a flurry of new listings that arrived with eased rules, and the strengthening yuan. Stocks have been close to the $10 trillion milestone since July, when China’s government acted to tame a speculative rally that had suddenly pushed a gauge of large caps near a 12-year high.

The country’s total market capitalization is now $10.04 trillion and just shy of the all-time high, according to data compiled by Bloomberg as of Monday. The U.S. has the world’s most valuable stock market at $38.3 trillion.

“It’s a meaningful number, especially coming after a pause in the stock rally,” said Hao Hong, chief strategist for Bocom International in Hong Kong. “It’s possible China’s market value can expand faster now that market reforms like the registration-based IPO system are in place.”

chart, histogram: China market capitalization has once again hit the $10 trillion level

© Bloomberg
China market capitalization has once again hit the $10 trillion level

Chinese shares rallied after a long holiday break on optimism the government will introduce reforms to turn the region around Shenzhen into a global technology hub and that the ruling Communist Party will introduce policies to stimulate demand when it holds a major meeting later this month. Equities surged over the summer as margin debt climbed at the fastest pace since 2015 and turnover soared.

The CSI 300 Index of key stocks listed in Shanghai and Shenzhen slipped 0.2% as of 10:17 a.m. on Tuesday, paring its gain in 2020 to 17%. That rally tops the world’s major benchmarks.

China has

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China’s Jet and Aerospace Giant Could Land in U.S. Crosshairs

China’s Jet and Aerospace Giant Could Land in U.S. Crosshairs

(Bloomberg) — China put on a spectacular military parade to celebrate the 70th anniversary of Communist Party rule last year, and President Xi Jinping wasn’t the only star of that show.

As Xi and other leaders watched from a Tiananmen Square grandstand, a squadron of fighter jets, attack helicopters, troop transports and surveillance planes roared overhead in a display orchestrated to impress TV viewers at home and warn potential aggressors abroad. The company that made those aircraft: Aviation Industry Corp. of China (AVIC), a state-owned conglomerate with 100-plus subsidiaries and 450,000-plus employees — more than Boeing Co. and Airbus SE combined.

Being China’s premier military aerospace contractor and a pillar of Xi’s strategy to become an industrial superpower are enough by themselves to warrant attention from the U.S. government. But AVIC builds more than war machines, running a civilian business that makes airliners and private jets — some built with parts made by joint ventures with American companies.

“AVIC is aspiring to be China’s Boeing and Airbus,” said Zhanfu Yu, a partner with consultancy Roland Berger in Beijing focusing on aerospace and defense. “Aerospace is a capital-intensive industry and, therefore, fits with China’s state system. AVIC has benefited from such state backing.”

With relations between Washington and Beijing deteriorating, and companies increasingly being caught in the crossfire, AVIC could join Huawei Technologies Co., ByteDance Ltd.’s TikTok and Tencent Holdings Ltd.’s WeChat as a target for U.S. politicians wanting to crack down on China’s reach. President Donald Trump’s administration in June already put AVIC on a list of firms it says are controlled or owned by China’s People’s Liberation Army.

AVIC hasn’t addressed those allegations publicly and didn’t respond to requests for comment for this story. The government says it owns AVIC.

The Beijing-based conglomerate is one of the biggest

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Stocks rise on China’s economic recovery and reforms

Stocks rise on China’s economic recovery and reforms

Watch: Biggest gains in three months for Chinese stocks

European markets edged higher on Monday, after Chinese stocks rallied on fresh signs of strong economic recovery and market reforms.

The pan-European STOXX 600 (^STOXX) rose 0.2% on the open to its highest level in almost a month, despite its troubles getting a grip on the coronavirus.

France’s CAC 40 (^FCHI) also rose 0.2% and Germany’s DAX (^GDAXI) was trading 0.3% higher. Britain’s FTSE 100 (^FTSE) lost 0.2%, with concerns over tighter economic restrictions looming in parts of the country.

It followed gains in much of Asian in trading overnight.

Pudong financial district of Shanghai, China. Photo: Carlos Barria/Reuters

“Equity markets in the region have… started the week on the front foot with the Shanghai Composite (^SSEC) leading the gains partly on the back of news that Chinese President Xi could unveil plans to further open parts of the economy to foreign investment,” noted Deutsche Bank analysts in a note.

READ MORE: UK services sector recovery slows as restrictions reintroduced

Stocks were trading 2.6% higher in Shanghai. China’s government is exploring ways for institutional investors to attract more mid and long-term funds, according to Reuters.

The most recent data also shows sustained growth in China’s services sector, a rebound in tourism and limited COVID-19 cases while other regions struggle with a resurgent virus.

The Hang Seng (^HSI) in Hong Kong rose 2.2%, and the Kospi (^KS11) in South Korea rose 0.5%, but Japan’s Nikkei (^N225) shed 0.3%.

US markets looked set to rise on the open. S&P 500 (ES=F) futures rose 0.2%, Dow Jones futures (YM=F) were flat, and Nasdaq (NQ=F) were up 0.4% as European markets opened.

Watch: What is a recession?

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