Report Translation 2

Q: The Chinese markets swooned again?
   A: China's benchmark Shanghai Composite Index tumbled 8.3% to 3,670.40,   falling for the third time in four sessions since the government tripled the stamp duty on trading last Wednesday. The index has now fallen 15.3% from last Tuesdays all-time high of 4,334.92. Nevertheless, unlike the 8.8% plunge on Feb. 27 that prompted sell-offs in global markets, yesterdays drop caused only temporary declines in Asia. Boosted by U.S. economic data that beat expectations, Hong Kongs Hang Seng Index gained 0.6% to close at 20,729.59 while the Hang Seng China Enterprises Index (for H-shares) was up 0.4%.
   Alec Young, Standard & Poors International Equity Strategist, wrote: "While the current Chinese sell-off will likely spark some healthy short-term profit taking in global markets, we doubt the ramifications will be more severe. S&P expects the Chinese economy, which grew 11.1% in the first quarter, to remain strong as momentum builds leading up to the 2008 Summer Olympics. In addition, with an average annual income of only US$1,500 for the typical  person, consumption is not the primary catalyst for Chinese economic growth.  Rather, growth is driven by export manufacturing, lessening the economys vulnerability to a stock market downturn. Lastly, reflecting the infancy of Chinas capital market infrastructure, the vast majority of Chinese wealth is  invested in banks and real estate, not the stock market. S&P expects strong exports and ongoing domestic infrastructure expansion to lead to Chinese GDP growth of 10.2% to 10.6% in 2007. As long as China's real economy remains robust, we believe the Chinese sales of global multinationals will remain solid, allowing investors to largely ignore short-term volatility in local, and illiquid, Chinese stock markets. Until the economic data out of Beijing softens, S&P believes China will remain a bullish global equity indicator."
   标准普尔国际证券策略师Alec Young写到:“眼下中国股市的抛盘或会引发全球市场出现健康的短线获利回吐,但我们认为后果不会变得恶化。标准普尔预料中国经济继第一季增长11.1%后,有望保持强劲的发展势头,并延续到2008年夏季奥运会。此外,由于人均年收入仅有1,500美元,中国经济发展的主动力并非来自消费,而是出口制造业,这就减少了经济受股市下滑所拖累的可能性。最后一点,由于中国资本市场的基础尚不健全,国民财富大多集中在银行和房地产业,而非股市。标准普尔预料,由于出口强劲和国内基础施的不断扩张,中国2007年GDP有望增长10.2%至10.6%。只要中国的实体经济保持稳健,我们认为全球跨国公司在中国的销售就会保持旺盛,这样一来,投资者就不会在意当地的短期波动以及中国股市的流动性不足。标准普尔认为,在北京发布的经济数据减弱之前,中国一直都将是全球牛市的风向标。”

Words translated by CCJK


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