Chinese shares open 1.39% higher on stimulus policies

Special Report:Global Financial Crisis

BEIJING, Dec. 4 (Chinese media) -- Chinese shares opened 1.39 percent higher on Thursday following the State Council (Cabinet)'s decision Wednesday to encourage commercial banks to grant more loans for stimulating economic growth and to stabilize the stock market.

The benchmark Shanghai Composite Index, which covers both A and B shares, rose 1.39 percent, or 27.31 points, to 1,992.72 at the opening.

The smaller Shenzhen index was up 1.16 percent, or 81.94 points, to open at 7,123.00 points.

Chinese shares also got a boost from a strong overnight rally on Wall Street, analysts said.

At an executive meeting presided over by Premier Wen Jiabao Wednesday, the Cabinet said nine measures would be taken to update the financial system, offer more loans for bolstering economic growth and raise the country's ability to ward against risks among financial institutions.

"The government would stabilize the stock market, promote the stable development of the futures market and give priority to the issue of bonds targeted at infrastructures, ecological and environmental projects and after-quake reconstructions," said the meeting.

Tang Yonggang, a senior analyst with domestic Hong Yuan Securities, said one layer of meaning in "to stabilize the stock market" was to brake the downward trend of the stock market.

The benchmark Shanghai Composite Index has shed more than 67 percent from its peak set at mid-October last year amid worries among investors fueled by the deepening global financial turmoil.

"The government's attitude to stabilize the market was very important to investors," Tang added.

Chinese equities surged 4.01 percent, or 75.78 points, to 1965.41 points on Wednesday, after China Securities Regulatory Commission chairman Shang Fulin said the regulator was considering allowing institutional investors to invest more in the equity market.

The banking sector, which had been sluggish for previous weeks due to financial crisis impact, boosted up the index after China Construction Bank(CCB) announced that the Central Huijin Investment Co., Ltd. had increased its CCB A-shares to 70.8 million by Nov. 28.

China Cabinet meeting encourages

commercial banks to make more loans


BEIJING, Dec.

3 (Chinese media) -- China's State Council, or the Cabinet, said Wednesday it would

adopt more favorable policies and update the financial system so as to encourage

the country's commercial banks to grant more loans to support economic growth.

At an executive meeting presided over by Premier Wen

Jiabao, the Cabinet also said measures should be taken to raise the country's

ability to ward against risks among financial institutions.

China makes policies to address

difficulties of enterprises, promote economic

growth

BEIJING, Nov. 26

(Chinese media) -- China's State Council, or the Cabinet, said on Wednesday that more

efforts would be made to encourage enterprises to upgrade technology and engage

in independent innovation.

It also said there would be policies to promote merger and

acquisition among enterprises.

China's 4 trillion yuan stimulus to

boost economy, domestic demand

BEIJING, Nov. 9 (Chinese media) -- China said on Sunday it will

loosen credit conditions, cut taxes and embark on a massive infrastructure

spending program in a wide-ranging effort to offset adverse global economic

conditions by boosting domestic demand.

This is a shift long advocated by analysts of the Chinese

economy and by some within the government. It comes amid indications that

economic growth, exports and various industries are slowing.