China Aerospace Engine Group: Shares in Chinese defence shares have moved sharply upward after Beijing confirmed that it was planning to invest heavily in the China Aerospace Engine Group, its new national aircraft engine company that is to coordinate the government’s drive to develop the country’s aerospace and defence ambitions. The government is now expected to pump hundreds of billions of yuan into the civil and military aircraft engine building industries through the group, which will bring 46 companies under one management umbrella.
The group was officially launched at the end of May with a registered capital of $7.62bn. The announcement was made to coincide with the ruling by the international tribunal in the Hague that China’s claims to sovereignty over much of the South China Sea had no legal basis and overwhelmingly backed the Philippines by ruling that the islands claimed by China – some of which are exposed only at low tide – cannot be used as the basis of territorial claims. It said some of the waters in question were “within the exclusive economic zone of the Philippines, because those areas are not overlapped by any possible entitlement of China”. It also found that China had violated the Philippines’ sovereign rights in those waters by interfering with its fishing and petroleum exploration and by constructing artificial islands.
Shares in China Aerospace International Holdings, AviChina Industry & Technology, the China Shipbuilding Industry and Sainty Marine Corp rose by 4.22%, 2.64%, 0.82% and and 9.97% respectively.