More support for consumption, property

China's regulators vowed to strengthen the financial support for large-item consumption and the real-estate sector in a bid to boost the slower-than-expected economic recovery.

Meanwhile, the central bank said the yuan will remain stable as the onshore yuan extended the fall to a six-month low yesterday.

At the Lujiazui Forum in Shanghai, National Financial Regulatory Administration director Li Yunze said that the authorities should increase their financial support for consumption and services to promote spending in new energy vehicles and green home appliances.

The Ministry of Commerce also said that it will pick about 100 cities to further foster growth in the automobile market.

Sales of electric vehicles grew 60.9 percent yearly in May, slower than 85.6 percent year-on-year in April, but a contraction is expected in June amid the weak demand, according to the China Passenger Car Association.

Li said China would strengthen the financing protection related to investments to support the transformation of urban villages into megacities.

Shares of mainland developers jumped yesterday in Hong Kong after Morgan Stanley said in a report that it expected China to roll out easing measures for the residential real-estate sector or infrastructure industry in the next one or two months.

Country Garden (2007) surged 10.2 percent, the best performer among blue chips.

On the recent banking turmoil in the west, Li said the direct impact on the domestic market is small, but China will strive to avoid systemic risks.

The financial regulator is also determined to eliminate regulatory gaps and blind spots.

Also addressing the forum, the People's Bank of China deputy governor Pan Gongsheng said he expected the yuan to remain relatively stable in the future as the US interest rate hikes near an end.

The yuan fell 15 basis points to 7.1275 per US dollar yesterday, hitting a fresh six-month low after six major Chinese state banks began cutting interest rates on yuan deposits, which could herald a broader interest rate cut by the PBOC.

The forum in Shanghai was also attended by many market heavyweights, including HSBC (0005) chairman Mark Tucker and the chief executive of Hong Kong Exchanges and Clearing (0388), Nicolas Aguzin.