China rushes to bolster country’s market
(12 October 2011 – China) China’s sovereign wealth fund jumped into the country’s banking stocks in a sign Beijing is rattled by tumbling share prices and the risk of an economic hard landing.
The buying, after a summer of punishing falls for shares listed in Shanghai and Hong Kong, was designed to reassure panicking investors of Beijing's confidence in its banking sector and stockmarkets.
China's banking shares have been especially savaged, the sub-index falling by more than 35 percent this year.
Investors have watched with growing dismay as government and private sector economists have re-calculated the scale of a potential bad loan crisis arising from local government spending.
Local government debt stood at RMB11 trillion (A$1.7 trillion) at the end of last year.
To perform its confidence-boosting task, Central Huijin Investment, a unit of the $US400 billion China Investment Corporation, bought shares in the Big Four Chinese financial giants - a state-owned quartet that includes Bank of China and the Industrial and Commercial Bank of China.
China's banking shares have been especially savaged, the sub-index falling by more than 35 percent this year.
Investors have watched with growing dismay as government and private sector economists have re-calculated the scale of a potential bad loan crisis arising from local government spending.
Local government debt stood at RMB11 trillion (A$1.7 trillion) at the end of last year.
To perform its confidence-boosting task, Central Huijin Investment, a unit of the $US400 billion China Investment Corporation, bought shares in the Big Four Chinese financial giants - a state-owned quartet that includes Bank of China and the Industrial and Commercial Bank of China.
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