Shanghai Economy Overtakes Hong Kong, Asian Shares Rise
For the first time in about 30 years, the size of Shanghai's economy has surpassed Hong Kong's, according to a report in Business Week. While China is still the world's third largest economy, stimulus measures helped pump Shanghai's GDP up 8.2% in 2009, while Hong Kong actually suffered a 2.7% decline, according to Bloomberg's data.
Hong Kong has reigned as China's financial center, benefiting from its classification as a Special Administrative Region, which has allowed it to thrive as a global business center, free from China's strict rules and regulations. But now China is opening up and business opportunities are everywhere. The recent financial crisis has also driven hoards of expats, who were driving certain parts of the Hong Kong economy, back to where they came from, along with their extensive expat packages including club memberships, leased luxury cars and expense accounts.
Chinese automakers surged Friday, perhaps reflecting the ever-growing demand for vehicles among China's new middle class who are rapidly exchanging their bicycles for cars. FAW Car surged 5.2%, Chongqing Changan Automobile gained 1.2% and Anhui Jianghuai Automobile advaced 0.8%.
In Hong Kong, exporters rose on the news from the U.S. government that the number of people claiming unemployment for the first time fell by 29,000 last week. Li & Fung, a Hong Kong-based clothing and toy distributor filling enormous orders for Abercrombie, Kohl's and Walmart, soared 4.2% Esprit gained 1.7%.
Hong Kong property companies continued their upward trajectory, despite all warnings that the market is just too hot. Today Hang Lung climbed 2.2%, Henderson Land rose 2.1%, New World Development gained 1.9% and Sino Land was up 1.8%.
In Japan, most Nikkei stocks were in positive territory thanks to rumors that the Bank of Japan was on the brink of loosening monetary policy. Electronics companies rose higher again today on hopes that U.S. shoppers will be heading to the mall in search of made-in-Japan stereos and cameras: Panasonic Electric rocketed up 4.5%, Sony surged 3.4%, Sanyo gained 2.1% and Sharp advanced 1.9%.
Japanese department stores had a good day with department store operator Marui Group racking up a 5.9% gain and Takashimaya getting a 2.8% boost. Beer makers also saw gains with Sapporo up 2.9% and Asahi Breweries rising 2.1%, giving investors a reason to grab a beer at the pub to finish off the week.