“China’s new yuan loans surged to a record high”, ANZ Banking Group said in a research note.
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Figures released by the Commerce Ministry on Monday showed that foreign direct investment to China rose 3.2 percent year-on-year to $14.07 billion in January. China’s blue-chip CSI300 index jumped 2.9 percent, to 3,030.59 points by the lunch break, while the Shanghai Composite Index advanced 2.8 percent, to 2,823.86 points.
“This shows that if China wants to deliver a 6.5 to seven per cent growth target this year they have to rely on domestic demand”, said Larry Hu, head of China Economics at Macquarie Securities in Hong Kong.
Exports fell 11.2 percent in January from a year earlier and imports tumbled 18.8 percent, both far worse than expected.
The export figure reflected weaker demand for shipments of manufactured goods as the global recovery continues to stumble.
The Chinese economy grew 6.9% in 2015 – the slowest rate since 1990 – and capital has been flowing out of the country due to worries over flagging growth and a sharper fall in the currency.
Chinese exports dropped by a staggering 11.2 percent in January year-on-year to $177.5 billion (158.1 billion euros) as tremors in overseas markets and weakness of trading partners weighed on the Asian giant. Total ticket sales over the first three days of this year’s Lunar New Year nearly equaled the total for the whole week-long holiday last year, according to the statement.
The yuan hit a 2016 high after the central bank set its official midpoint rate sharply stronger against the dollar and the central bank governor tried to bolster the currency.
Oil prices also inched up 12% on Friday after reports said that the Organization of the Petroleum Exporting Countries (OPEC) might move to cut global production rate in response to the worsening supply glut.
Zhou said there was no basis for the yuan to keep falling, and China would keep it stable versus a basket of currencies while allowing greater volatility against the U.S. dollar.
Investors were buying one of the most beaten up stock markets globally this year, as a recovery in global markets started Monday and picked up across the Asia today.
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“It was a steeper than expected fall in trade numbers”, said Chester Liaw, an economist at Forecast Pte Ltd in Singapore.
