RMB Appreciation to Benefit 4 Industries

Banking, real estate, air transportation and papermaking sectors are believed to benefit from the appreciation of Chinese Yuan.

This month, China's real estate policies are expected to be more certain and the effect of the macro control will become more visible, thus to reduce the industry risks. People's Bank of China (PBoC) as the nation's central bank raised the benchmark interest rates of one-year RMB loans and deposits by 0.25 percentage point as from October 20. In this way, the benchmark interest rate for one-year loans rose to 5.56% and the interest rate for one-year deposits was adjusted up to 2.50%. PBoC is guessed to adjust the benchmark loan rate and interest rate circa the Spring Festival.

During the first three quarters of this year, 16 Chinese listed lenders saw a 32.5% year-on-year growth in their net profits, which reached CNY 524.8 billion in the nine months. By the end of this September, the banking sector had the outstanding loans of CNY 46.28 trillion, up 18.5% year on year.

During this January to September, China's papermaking sector realized the operating turnover of CNY 44.3 billion, a year-on-year growth of 28.5%; and the nine-month net profits of the whole industry totaled to CNY 1.95 billion, going up 32.2% compared to the figure in the same period of 2009. With the renminbi appreciation, these Chinese papermaking enterprises will see lowered import cost. On Wednesday, the mean price of the US dollar against Chinese Yuan was 1: 6.6818, a slight appreciation of 107 base points from the previous trading day.

There will be more investment opportunities emerging from more industries during China's 12th Five-Year Plan period from 2011 to 2015. These sectors include the Internet of things, the information security, grain security and agriculture, new material, consumer goods, new energy, energy saving, emission reduction and environmental protection, marine industry, advanced manufacturing, aviation and so forth. In addition, the transportation construction in Tibet will be further propelled during the coming five years. With the planned investment of CNY 49.89 billion, the highway traffic mileages are expected to reach 70,000 kilometers in Tibet by 2015; and eight freight transportation hubs, 50 township bus stations and 300 bus stops will be built in Lhasa and some other regions.