China stocks defy interest rate hike to record high

China's major stock index shrugged off the latest monetary tightening measures on Monday, rising more than two percent to hit an all-time high.

China’s stock market has been booming for more than one year, the index started from around 1500 in Aug 2006 to above 5400 today. More than 3 times in one year! Last Friday the central bank of China announced another 0.27 interest hike, and the index again, picked a lot on the news.

There are a lot of reasons for the booming. China exports a lot which brings big favorable balance. Then US pressed China to improve RMB, and then a lot of more money rushed into China.

But now the buying power comes from the funds, who receive the money from the common people. Are Chinese so rich? No. Usually they invest thounds of RMB which is all they have. But they still do it. Don’t they know the risk of the market? Yes, They do. But they have to.

In China, the assets like apartment is increasing dramatically, more than 10% per month, so the RMB is devaluing in China. The latest price index released is 6.5%. So if the common Chinese don’t put their money into Stock market, their money is decreasing!

That is what is going in China. Everybody knows the price of the market is too high, but everybody is “pushed” into the market.

Credit Card Delay Payment Interest

Yes, China is a country with many controls, which make the Chinese sometimes seem dumb, and when they find out it is not taken granted by the foreigners, they will rage and then have to accept it.

Today I’d like to discuss about the credit card. Credit card started to grow fast from 2002 in China; now maybe more than 100 millions credit cards have been issued. Even for me, a early user, don’t realize something in it. For Example, the delay payment interest. As I know, in USA, the interest is charged differently by different issuers, which varies from 9 to 17 percent. But in China, all the issuers charge the same: 18 percent!! You have no choice.

The anti-monopoly bill has just passed a couple of days ago in China. I believe it is another type of monopoly, but not sure when it will be erased.

China Construction Bank—Partner of Bank of America in China

It is said Bank of America was investing $2 billion in the USA No. 1 mortgage lender, Countrywide Financial. But do you know China Construction Bank is the partner of Bank of America in China?

In China, there are four biggest commercial banks: ICBC( Industrial and Commercial Bank of China), BOC( Bank of China), CCB( China Construction Bank) and ABC(Agriculture Bank of China).

2005 August, Bank of America bought 9% share of CCB.

From 2006 April, both banks’ customers could cash out on each other’s ATM for free. CCB owns 11000 ATMs in China and Bank of America owns 17000 ATMs in USA.

From 2006 October, Bank of America and CCB have announced a joint pilot program to offer free consumer account wire transfer service to and from China.The pilot program is only available in the US at 110 Bank of America locations in Alameda, San Francisco and San Mateo counties. In China, the program is available in nearly 250 CCB locations in Beijing, Shanghai, Guangdong, Zhejiang, Liaoning and Xiamen.


This is good, isn’t it? The customers could save a lot. For the further information of CCB, please refer to: Http://www.ccb.com/portal/en/home/index.html