Finally we have a piece of somewhat good news. Industrial production was up only 17.9% year on year in October, down substantially from September’s 18.9% year-on-year rise. Not only is this well below last month’s number, it is also well below expectations, which were for an 18.3-18.5% rise.
But we shouldn’t get too excited by the decline. September’s growth in industrial production was extremely high, and the October growth rate may be a partial rebalancing of that number; buspirone dosage. The October figure is more or less in line with August’s 17.5% and July’s 18.0%.
Also it seems to me that in past year we saw these numbers moderate around this time of year before bouncing back up again early in the next year. Buspirone dosage: this may have something to do with the reduction in credit expansion we normally see in October, including this October. For the first ten months of the year total factory output was 18.5% higher than for the same period in 2006.
In Shenzhen, a city in Guangdong near the Hong Kong border, the local branch of the PBoC has issued instructions to local banks to limit cash withdrawals.Individuals are allowed to withdraw no more than RMB 30,000 (about $4,000) a day, RMB 50,000 a week, or RMB 200,000 a month from their bank accounts. The limit for companies is RMB 100,000, RMB 200,000 and RMB 500,000 respectively.
The reason for this restriction is to slow down the flood of money leaving the mainland attempting to take advantage of the relatively lower share prices at which Chinese companies sell in Hong Kong. I think H-shares (Hong-Kong-traded shares) trade at roughly half the price of A-shares (Shanghai- or Shenzhen-traded shares). Of the RMB 195.6 reduction in deposits withdrawn across the mainland in the year to date, about half comes from Shenzhen, giving pretty good circumstantial evidence that this money is being withdrawn to be invested in Hong Kong.
I am not sure how effective these measures will be. It is pretty commonplace here that bank records are so weak that little information travels from branch to branch, and even less so from bank to bank. If you open two accounts at two different banks you can probably transfer half your money to one of those accounts legally and then legally withdraw the full amount permitted from each account. The only ones who won’t be able to do this are depositors who have too little money to afford the hassle and cost of opening two accounts, but I doubt they are the big source of speculation anyway.
One thing though, this is good practice for dealing more generally with bank runs.