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Thungen Financial 7th October 2014 - Chinese Economic Update
Chinese markets started to make headway today after a week that saw demonstrations in Hong Kong and the World Bank revise down its growth forecasts for the second time this year.
Student protestors in Hong Kong have managed to disrupt multiple businesses in several districts in Hong Kong as they look to achieve a level of negotiations that will see a fully democratic voting process in the Chief Executive elections in 2017. The mainland government previously said that the voting in 2017 would be as such, however in 2012 they changed their policy and said that only candidates that were vetted by Beijing would be allowed to stand.
When the protestors initially took occupancy in the Central Business Districts they were met with force from authorities, using tear gas and reportedly using rubber bullets in an attempt to disperse the protestors. As soon as daylight came the police moved back and allowed the peaceful protest to continue. This was seen by many around the world as China backing down however at the time they requested outside governments keep their opinions to themselves and not interfere with the situation. Obviously this has been ignored with pledges of support coming in from many Western governments.
Whether the protestors will saty as long as they have threatened and whether we will see an uprising of the likes of Tiananmen Square are very unlikely as the temperament of the students involved is far more relaxed and focused on getting the message out in the global domain rather than causing a revolt on the street of Hong Kong's CBD.
The World Bank has again downgraded the growth expectations of the Chinese Economy, stating a slowdown in demand for Chinese goods and a change in the drivers behind the economy. With mass stimulus already in place the local government has looked to take steps to amend the more localized issues which will halt the GDP growth expected form the World's second largest economy. Revised down to 7.4% from 7.6% for 2014 this is a figure many have quoted since the first quarter of the year. What is more concerning is the revision for the coming next 2 years which see a more significant shift. 2015's revision see's drop from 7.5% to 7.2% and 2016's falls further to 7.1%. Still seen as good growth considering the current global conditions it is fair to say that the Chinese are not really concerned by this as they look at more positive steps to attempt to change their economy from an export to domestic demand driven backbone.
Major Asian Markets as of 7th October 2014
Hang Seng 23,433.49 (+0.51%)
SSE Comp 2,363.87 (+0.26%)
Nikkei 225 15,863.79 (-0.17%)
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DISCLAIMER The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Thungen Financial Advisors. All market data within this release is for your general information and enjoys indicative status only. Thungen Financial Advisors does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.
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