(Yicai Global) Aug. 12 -- Below is a roundup of Yicai Global's top financial, business and markets news on China last week.
Both the offshore and onshore rates of the Chinese yuan versus the US dollar broke the psychologically important level of 7 on Aug. 5. The rate is appropriate and the fluctuations are driven by market forces, according to Yi Gang, the governor of the People's Bank of China, seeking to assure that the central bank has the ability to maintain the stability of the foreign exchange market.
China's cabinet designated the Lingang Area, the district about 75 kilometers from downtown Shanghai where Tesla's first overseas factory is located, as an addition to the Shanghai free trade zone, the State Council announced on Aug. 6. The government aims to support the fields of semiconductors, artificial intelligence, biomedicine, and civil aviation with lowered income tax rates.
China's foreign exchange reserves decreased by USD15.5 billion from June to USD3.1 billion last month while the nation's central bank continued its eight-month streak of adding gold reserves to 62.3 million ounces, the State Administration of Foreign Exchange said in a statement on Aug. 7.
MSCI plans to raise the weighting of all large-cap Chinese mainland stocks in its indexes as scheduled to 15 percent from 10 percent after markets close on Aug. 27, the New York-based global index compiler announced on Aug. 8.
China's securities regulator denied a Bloomberg News report about its alleged plan to greatly ease controls on foreign investment in stock market index futures, as the China Securities Regulatory Commission said on Aug. 8 that it will open up the commodity futures market in an orderly manner.
China's foreign trade rose 4.2 percent annually to CNY17.41 trillion (USD2.47 trillion) in the first seven months, the General Administration of Customs announced on Aug. 8. The top three trading partners were Europe, the 10 member states of the Association of Southeast Asian Nations, and the US.
China's consumer price index jumped 2.8 percent in July from a year earlier, the fastest increase in China's consumer price inflation since last March, according to data released by the National Bureau of Statistics on Aug. 9. The producer price index fell 0.3 percent from a year ago, the first decline since August 2016.
The International Monetary Fund said that the Chinese yuan has been "broadly stable" against other currencies in its annual review on the Chinese economy, potentially reducing doubts of currency manipulation.
Over the week, the Shanghai Composite Index dropped 3.3 percent to 2,774.75 points. The Shenzhen Component Index pared 3.7 percent to 8,795.18 points. The ChiNext Price Index, which tracks growth enterprises listed in Shenzhen, fell 3.2 percent to 1,507.71.
Editor: Emmi Laine