China’s stocks will extend this year’s bear market losses and investors should avoid bank shares as loan growth slows and the need to raise additional capital increases, according to Pacific Sun Investment Management Ltd.
China’s stocks fell the most in a week after Moody’s Investors Service cut the debt ratings of six European nations and a former central bank official said the government is unlikely to significantly loosen credit this year.
Guangzhou Constant Shoes Co. is set to abandon Guangdong, the southeastern province at the center of China’s exporting boom since the 1980s, by shifting most of its production 500 kilometers (311 miles) inland.
China’s stocks rallied, driving the benchmark index to its biggest gain since October, on speculation policy makers will rein in efforts to cool the economy as Europe’s debt crisis threatens a global recovery.
China’s President Xi Jinping said officials shouldn’t be judged solely on their record in boosting gross domestic product, the latest signal that policy makers are prepared to tolerate slower economic expansion.
Hong Kong stocks fell, dragging the Hang Seng China Enterprises Index into a so-called bear market, on concern China’s efforts to cool property prices and the fallout from Europe’s debt crisis will hurt earnings.
China’s ruling party is planning to keep Zhou Xiaochuan as central bank governor as it prepares for the broadest shuffle of government leadership in five years, according to a person with direct knowledge of the discussions.