Shanghai Daily news

Share prices of the two stock markets on China's mainland inched down yesterday in response to the central bank's decision to raise interest rates.
Despite the small drop in stock prices, financial analysts say the rate hike is generally seen as a positive move that will have a moderating effect on the economy.
The analysts also said the move, which is seen as a clear signal the government plans to curb inflation, will have far-reaching significance as the central bank made rates more market oriented.
On Thursday, the People's Bank of China surprised many by raising the benchmark one-year bank deposit and lending rates by 27 basis points each to 2.25 percent and 5.58 percent respectively.
It was the first rate hike in nine years.
The Shanghai Composite Index dropped by 1.58 percent yesterday, while the Shenzhen Component Index dropped by 2.31 percent, as traders worried that the interest rate hike would have a negative influence on several sectors, including real estate, raw materials, petrochemicals and automobile manufacturing.
They also worry the move will hurt companies carrying large levels of debt.
Pressure on companies in these sectors will probably only last for a short while, said Zhang Qi, a Haitong Securities Co Ltd analyst.
"The impact brought by the rate rise is possibly very limited and will not last very long," Zhang said.
He said the rate increase was quite small so it's not likely to have a strong effect on the stock market.
"Higher interest rates do not necessarily result in declines on the stock market in the long term," Zhang added.
David Pitcher, executive director of CB Richard Ellis Property Consultants Ltd, Shanghai, cast doubt on fears the higher interest rates will hurt the city's real estate market.
"This is only an adjustment that could happen any time, not the beginning of a trend," Pitcher said.
He said common wage earners looking to buy a first home will be influenced more than property speculators by the hike.
"Speculators are looking at 10 or 20 percent investment returns. Such a minor increase in interest rates will have little effect on them," he said.
"Higher interest rates will have a major influence on first-time home buyers at the very bottom of the market. The government wouldn't like to see that," he added.
As a result, housing prices will probably level off or perhaps even fall in some suburban areas, he said.
While the rate hike isn't expected to have a big effect on financial markets, many local residents headed to their banks yesterday to make changes to their accounts.
A local surnamed Zhang changed his three-year deposit of 50,000 yuan (US$6,024) to a new account so he would earn an extra 1,080 yuan from the higher rates.
Home owners who have already signed a mortgage and started borrowing money from banks will begin paying the new interest rate starting next year. Those who have signed a contract without actually borrowing from lenders will be charged the new rates once they start using the loan.