A string of foreign and domestic brokerages have released their 2011 outlook for China’s stock market. Notably, Zhang Kun, strategist at Guotai Junan Securities, the country’s second-largest domestic brokerage, has predicted further losses for Chinese stocks as the central bank struggles to tamp down inflation. Zhang correctly predicted that Chinese equities would experience losses in 2010; the benchmark Shanghai Composite Index (SCI) slumped 14 percent to 2808.08 last year, making it the worst-performing benchmark index in the world’s biggest 10 markets, according to Bloomberg. On Wednesday the SCI fell 0.5 percent to 2838.59, its first drop in five days.

However a number of other prominent analysts have forecast a rebound in Chinese stocks in 2011, fueled by confidence in the government’s stewardship of the economy and a recovering global economy. Jing Ulrich of JPMorgan said she expects inflation to stabilize in mid-February after the Chinese Lunar New Year, which usually drives up the cost of food. Ulrich favors consumer- and construction-related stocks that will receive a boost from government policies to bolster domestic consumption and create low-cost urban housing. JPMorgan predicts that the benchmark index could post a 20 percent gain in 2011.

To read more about analysts’ predictions for China stocks in 2011, click here.

In another sign of an improving global economy, Chinese shipping giant China Cosco Holdings said that it will post a net profit for 2011. The Beijing-based shipper recorded a net profit loss of RMB7.5 billion (USD1.1 billion) in 2009 amid a global downturn in the shipping industry. The company is finalizing its yearly performance data.