The Chinese Index slid by 0.79 percent
The Shanghai Composite Index dropped by 0.79 percent. The Index rallied to an early high of 3,167 before sliding most of the rest of the day. The Shenzhen Composite Index also fell by 1.05 percent and the Nasdaq-style ChiNext fell 0.72 percent. Chinese markets were defying a bullish trend in Asia today, while most indexes closed higher.
Shanghai Composite’s number one economic planner is projecting an overall economic growth rate of 6.7 percent in 2016 – which is well within the 6.5 to 7 percent target set by Chinese policymakers early this year. The director of the National Development and Reform Commission cited an International Monetary Fund Reports that expected China to be the biggest engine of global growth in 2016
The United States is expected to contribute 0.3 percentage point of total global economic growth.
Over the first three quarters of 2016, China’s service sector announced 52.8 percent of value-added industrial output. The 5.5 percent year-over-year increase in the Chinese producer Price Index also indicated demand heating up.
The analyst expects the Chinese auto industry boom to run out of gas this. According to the China Passenger Car Association, dealers moved 23.9 million units last year for a 15.9 percent yearly.
Forex reserves declined for six consecutive months, to U.S. $3.01 trillion in December, a decline from U.S. $3.05 trillion in November China has been piling up foreign currency reserves for years through substantial trade.
While reserves have been sliding and may soon fall below the standard mark, Chinese forex reserves are still more than enough to fight of the foreign threats that the Chinese currency is experiencing. The decline in Forex reserves is also a natural consequence of China opening its markets to foreigners.