Surge in Chinese Exports Jump-Start Market, China Unicom Rises on iPhone Negotiations

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In Asia Wednesday Hong Kong's Hang Seng Index rose 0.7% to 19,621 and China's Shanghai Composite gained 2.8% to end the day at 2,583. In Japan the Nikkei 225 Index slid 1% to close at 9,439.

Chinese exports surged by 50% in May from a year earlier, reports Reuters, sending a positive message out to investors around the globe. But in China's Pearl River Delta, just across the water from Hong Kong where many exports are produced, factory workers have begun protesting low wages in light of the salary hikes announced for neighboring Foxconn employees. According to a report in China Daily, Foxconn's example has given factory management the tough choice of increasing wages for their own workers, moving to more remote areas or closing up shop. A Hong Kong survey showed that 63% of HK-invested companies with operations in the Pearl River Delta's Guangdong province are considering leaving the area.

On the positive export numbers, Hong Kong-listed exporter Li & Fung rose 1% and Hong Kong banks that lend to small businesses also advanced. Industrial & Commercial Bank of China increased 1.1% and Bank of China gained 1%. HSBC inched up 0.5%. Foxconn recouped 2.4%.

CNOOC, a Hong Kong oil exploration company surged 1.8% and PetroChina, which refines and exports petroleum products, gained 1.7%.

China Unicom was among the best performers in the territory after announcing that it was in talks with Apple over introducing the new iPhone 4 to China if it can get approval from the Chinese regulatory agency. According to China Daily, iPhones are not too popular in China due to their high price and the lack of WiFi in the Chinese models. In order for the product to do well there, prices will have to come down to a point where they can compete with smuggled iPhones and fakes. Today China Unicom soared 2.3%. Meanwhile, online gaming company Tencent, which does business in China, plunged 4.3%.

Investors plowed money into Chinese property stocks on new predictions that the numbers, including a 3.1% rise in consumer prices last month, show that a sharp slowdown may not be in the cards. Poly Real Estate rocketed up 6.1%, Gemdale leaped 5.9% and China Vanke jumped 2.8%.

Among commodity producers and exporters, Jiangxi Copper gained 3% and Aluminum Corp. of China, or Chalco, rallied 2.3%. Maanshan Iron & Steel climbed 2.7% and Baoshan Iron & Steel advanced 2.1%.

Japan's new government got a boost from data showing that the country's machine orders rose more than 9.4% from a year earlier, with a 4% gain from March to April, according to Bloomberg. These numbers indicate an increase in business investment. But today, shares were down nearly across the board, with exporters hard hit. Konica Minolta tumbled 4.3% and Canon sank 1.8%.

Electronics makers fared badly, with Advantest, a maker of semiconductor testing devices plunging 3.2% and Alps Electric, which makes electronic parts for cars falling 3.4%. Pioneer slid 3.1% and Panasonic slipped 2.4%. Electronics giant Sony plunged 1.7%.

Telecom company Softbank was among today's few winners in Tokyo, rising 1.7%. The company has been chosen as the service provider for Apple's iPhones and iPads. No small business in a technology-loving country like Japan.
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