Wednesday, March 18, 2009

Unemployment rate in Hong Kong climbs to 5.0%

Special Report:Global Financial Crisis





HONG KONG, March 17 (Chinese media) -- Unemployment rate in Hong Kong for the

three months starting from December climbed to 5 percent, from 4.6 percent for

the three months starting from November, the Hong Kong Special Administrative

Region (HKSAR) government said Tuesday.

Matthew Cheung, Secretary for Labor and Welfare, said he expected the

unemployment rate to rise even further as the tough times were not yet over in

the labor market.

The latest figure for the unemployment rate, which typically lags behind

the trend in economic performance, was the highest in Hong Kong in 34 months.

The Census and Statistics Department said the underemployment rate held

stable at 2.1 percent for the periods respectively ended Jan. 31 and Feb. 28.

Sectors such as construction, transport, import and export trades,

manufacturing and restaurants, were among the hardest hit.

Total employment declined by around 17,500 from 3,53 million to3.51

million, while the labor force decreased by around 3,200 from3.69 million to

3.68 million.

The number of the unemployed increased by around 14,200 from 157,700 to

171,900.

The labor market had been much affected by the economic slowdown and the

HKSAR government will do its best to help those affected by the downturn,

including funds earmarked for helping those who are trying to find jobs, Cheung

said.



Pay freezes hit HK companies

Special Report:Global Financial Crisis





HONG KONG, March 17 (Chinese media) -- The trend of having pay freeze and flexible

incentive schemes was spreading among local companies, said the Hong Kong

Institute of Human Resource Management (HKIHRM) when making its survey results

public on Tuesday.

In its January 2009 Pay Trend Survey, the HKIHRM surveyed 125 prominent

Hong Kong companies from 17 business sectors.

Of the 45 companies that confirmed their pay adjustments during the January

survey period, 68.9 percent of them were making an overall zero pay adjustment,

hitting a record high since 2002.

The data revealed that companies are now more prudent in making pay

adjustments, and that the pay freeze is the prevailing cost- control option.

However, no pay cut has been recorded for six consecutive years.

"Given a rather gloomy economic outlook, we believe the downward trend will

continue. Base pay increases will now be offered on a more selective basis" said

Lai Kam-tong, Co-chairman of the Remuneration Committee of HKIHRM.

With respect to the bonus payment, most of the 45 companies running a

guaranteed-bonus policy awarded their employees with the average bonus size

being one month's base pay. A few of them would shift to a non-guaranteed-bonus

system.

As for the 33 companies with a non-guaranteed bonus scheme, 93.2 percent of

their eligible employees were awarded the bonus, with the average bonus size

being 1.08 months of pay. This compared with the 95 percent of eligible

employees actually awarded a bonus of 1.42 months of pay in the same period last

year.

The HKIHRM said that changes in incentive systems could be frustrating for

employees especially during tough economic periods, therefore, companies were

suggested to have open communication with their staff and to put in place an

effective benefit strategy and bonus plan.

"Communication with employees is the key to ensure employees' buy-in for

any corporate changes and will help them understand the current performance of

the business. It will also help engage them in making contributions towards cost

control and enhancing productivity," said Lai.

Statistics: Myanmar foreign investment rises sharply in 2008

YANGON, March 18 (Chinese media) -- Myanmar's foreign investment rose sharply by 93.06 percent in 2008, reaching 974.996 million U.S. dollars compared with 2007, according to the latest figures released by the Central Statistical Organization.



The organization attributed the sharp increase of the foreign investment to that added in the mining sector which registered 860.996 million dollars. Of it, over 855.996 million dollars were injected by China, while the remaining 5 million dollars by Singapore.

Of the 114 million dollars' foreign investment in oil and gas during the year, Russia accounted for 94 million dollars, while Vietnam represented 20 million dollars.

According to local report, total foreign contracted investment in Myanmar has hit 15 billion U.S. dollars in 422 projects up to end of 2008 since Myanmar opened up to such investment in late 1988.

Of the 29 countries and regions investing in Myanmar, Thailand stood first with over 7 billion U.S. dollars, followed by Britain and Singapore with over 1 billion U.S. dollars each, the Union of Myanmar Federation of Chambers of Commerce and Industry was quoted as saying.

Electric power sector dominated with 6 billion U.S. dollars, followed by oil and gas (over 3 billion U.S. dollars).

Such sectors as manufacturing, mining, real estate development, hotel and tourism were injected with over 1 billion U.S. dollars each, while fisheries and livestock breeding, and transport and communication took 300 million U.S. dollars each, industry estate 100 million U.S. dollars, construction and agriculture 30 million U.S. dollars each.

Myanmar also received 136.5 billion Kyats' (113.7 million U.S. dollars) investment from domestic companies in 11 sectors namely -manufacturing, real estate development, transportation, construction, fisheries and livestock breeding, mining, hotel and tourism, electric power, industries and agriculture, local news reports said.

Of these sectors, manufacturing topped the investment with 40 billion Kyats (33 million U.S. dollars), followed by real estate development (25 million U.S. dollars) and transportation (16.6 million U.S. dollars).

Bangladesh forms high-level task force to fight global financial crisis

Special Report:Global Financial Crisis



DHAKA, March 18 (Chinese media) -- Bangladesh has formed a high-powered task force to intensely monitor its economic situation and keep the country away from the fallout of on-going global financial crisis.

The formation of the 27-member task force led by Finance Minister AMA Muhith was formally announced in a government circular issued here on Wednesday.

The members of the task force including as many as four ministers, governor of the central bank, other senior government officials, leading economists, representatives of local think tanks and trade bodies.

According to the circular, the task force has been assigned to identify impacts of the global financial meltdown on Bangladesh in addition to reviewing the overall economic situation of the country.

It said the task force will make recommendations on reducing government's unnecessary expenditures and check whether there is a need to devaluate local currency against any foreign currency including U.S. dollar to help exporters remain competitive in global market.

The task force has been asked to prepare a strategic plan to gear up the activities for developing the country's agriculture sector for boosting production.

According to the circular, the government may invite other experts to join the team if requires. It said the task force would meet once in two months and if urgent it could hold more meetings.

The formation of the high-level team came after the country's apex trade body Federation of Bangladesh Chambers of Commerce and Industry demanded a 60 billion taka (about 857.1 million U.S. dollars) rescue package from the government to help local industries cope with the global financial meltdown.

Bangladesh's Commerce Minister Faruq Khan earlier said the country's economy is being hit by the global economic recession with slump in exports and remittance earning.

India extends zero customs duty, ban on pulses export for a year

NEW DELHI, March 18 (Chinese media) -- India Wednesday extended the import of pulses at zero customs duty and the ban on exports on the products for another fiscal year due to decline of the mass consumption food product in the country.



"The decision today is to extend zero duty on import of pulses for one more year beyond March 31, 2009. Pulses can now be imported at zero duty for one more year till March 31, 2010," Indian Home Minister P. Chidambaram told the media.

The fiscal year starts April 1 and ends March 31 each year in India.

He said the government took the decision to increase the domestic supply of pulses, a popular food product in India.

"The government also decided to extend the distribution of imported pulses through the public distribution system for six more months till Sept. 30 this year," he said.

India banned exports of pulses and exempted them from customs duty since June, 2006.

An earlier report by the Indian government said Tuesday the import of mass consumption goods increased by 33 percent from April to December 2008 over the same period of previous year.

The import of edible oil, automobiles, fruits, vegetables, cotton, silk, rubber, spices, alcoholic beverages, marble, granite, tea, coffee and milk products have increased during the reference period, said the Indian Ministry of Industry and Commerce.

Singapore sets out trials to build green roads

SINGAPORE, March 18 (Chinese media) -- Singapore's Land Transport Authority (LTA) has set out trials to build roads with recycled waste materials, local media reported on Wednesday.



According to local radio 938 Live, the LTA is exploring using both processed road construction wastes and industrial waste in future new roads, which would be made up of 70 percent of recycled materials.

The report said the effort is to ensure long term sustainability and make Singapore less dependent on imported materials.

The clean energy industry is identified as a strategic key growth industry for Singapore. According to the Clean Energy blueprint of the city-state, the clean energy sector is expected to generate a total of 170 million Singapore dollars (about 111 million U.S. dollars) in value-added and 7,000 new jobs by 2015.

Central bank: S Korea unlikely to face deflation

Special Report:Global Financial Crisis



SEOUL, March 18 (Chinese media) -- South Korea faces little risk of deflation for this year, unlike in the United States and Japan, South Korea's Bank of Korea (BOK) said Wednesday.

It has been predicted that the South Korean economy may fall into deflation, or a persistent decrease in the general price level, due to sluggish domestic demand and falling property prices.

"Some institutions have raised concerns on possible deflation in the South Korean economy, but the likelihood of deflation is extremely low," the BOK said in a report.

Basing its prediction on future inflationary probability data, the BOK said concerns over inflation rather outweigh those over deflation.

South Korea's inflation growth could slow down, however, if the global economic slump lasts for a longer period and on a broader scale than expected, the central bank added.

Meanwhile, the BOK said that there was a high possibility for the United States and Japan to fall into deflation, with Japan's risk exceeding that of the United States.

Spokesman: HK resumes processing of poultry import applications from Thailand

HONG KONG, March 18 (Chinese media) -- The Center for Food Safety (CFS) of Hong

Kong Wednesday announced that the processing of applications for importing

poultry and poultry products from Administrative Region 6 of Thailand (the

central west part of the country) would resume with immediate effect.

The center suspended the processing of applications following confirmation

of an outbreak of the highly pathogenic avian influenza H5N1 on a poultry farm

in Thailand last November.

The center lifted the restrictions for Thailand (except Administration

Region 6) in January while continuing to monitor the situation in Administrative

Region 6.

"In view of the control measures taken by Thailand and the fact that there

are no other cases of avian influenza reported in the country, we decide to

resume processing applications from the whole of Thailand," a CFS spokesman

said.

HK export confidence slightly rebounds

Special Report:Global Financial Crisis





HONG KONG, March 18 (Chinese media) -- Confidence in Hong Kong's trade sector has

improved but is still weak, according to the latest HKTDC Export Confidence

Index released on Wednesday by Hong Kong Trade Development Council (HKTDC).

The quarterly-released index, which reflects the business sentiment of

local exporters, stood at 25.8 in the first quarter of this year, compared with

22.3 in the fourth quarter of 2008.

This is still very downbeat as any reading below 50 signifies exporters are

pessimistic about the outlook, said the council in a statement.

"Although export confidence in the first quarter improved slightly, the

general economic outlook remains difficult," said HKTDC Chief Economist Edward

Leung.

However, export confidence improved in all major markets, with the Chinese

mainland at 45.5, continuing to lead the pack.

"Among all the markets, HK exporters are most confident toward the Chinese

mainland, as they believe the Chinese government is more capable of dealing with

the financial crisis than any other countries and China is likely to be the very

first country recovering from the economic downturn," Leung said.

What's more, all industries showed a rebound in confidence, with the index

for timepieces seeing the biggest rise from 17.5 to 28.5.

The index reading is based on a survey of 500 Hong Kong companies that

source, produce and sell, according to the HKTDC.

Sanyuan eyes 87% jump in 2008 net profit

BEIJING, March 18 (Chinese media) -- Beijing Sanyuan Foods Co., the only listed company to sell melamine-free products during the country's dairy scandal, said Wednesday that its net profit in 2008 jumped 87.2 percent from a year earlier.

Net profit rose to around 40.75 million yuan (about 5.96 million U.S. dollars), up from 21.77 million yuan in 2007. Earnings per share was 0.06 yuan last year, doubling the level of 0.03 yuan in 2007, according to the company's statement submitted to the Shanghai Stock Exchange.

Sanyuan credits its impressive results to rising sales of its dairy products such as powdered and liquid milk. Its sales revenue of dairy products rose 29.7 percent to 1.39 billion yuan from 2007.

The company is expected to be the only one profitable among the listed dairy firms in China as other companies such as Inner Mongolia-based Yili Group and Mengniu Dairy, as well as Shanghai-based Guangming, forecast losses for 2008. No specific figures for those losses were disclosed.

However, Sanyuan was not immune from China's tainted dairy scandal as exports of its milk powder declined 55 percent to 3.15 million yuan from 2007.

Sanyuan said it would face a capital shortage this year. Cash outflow exceeded inflow by 35.97 million yuan in 2008, reducing the net cash flow from operating activities by 145.4 percent from a year earlier. The capital balance at the end of 2008 stood at 167 million yuan.

Sanyuan bid 616.5 million yuan to win an auction on March 4 for the assets of Sanlu Group Co., the bankrupt Chinese dairy company at the center of the tainted-dairy scandal.

Analysts said Sanyuan needs a large amount of money for the operation of Sanlu assets, which puts great capital pressure on the company.

Multinationals eye China's Northeast despite global downturn

Special Report:Global Financial Crisis





By Wang Fengfeng, Wang Zhenhong and Wang Jun

SHENYANG, March 18 (Chinese media) -- Multinational corporations are closing factories and pulling back investment amid the global economic downturn, but not in China's Northeast.

Business executives attribute their optimism and initiatives there to the region's reliable supplies of power, raw materials and cheap labor and the business opportunities in the Chinese market.

"We want to be able to take advantage of the strong market when the crisis is behind us," said Kirby Jefferson, general manager of Intel's Fab 68 .

Fab 68, in Dalian, a coastal boomtown of northeast China's Liaoning Province, is Intel's first wafer fabrication plant (FB) in Asia. It broke ground in 2007 and is due to be in operational in 2010.

In spite of the tough market conditions, Jefferson said the global chip giant had no plans to delay the operation of the 2.5-billion-U.S.-dollar facility.

"Business will come back, business will get strong again. It's important that Intel has a very strong presence with manufacturing in China," Jefferson said.

Intel has made it clear that it wanted to produce computer chips locally to cut costs as China has emerged as a major consumer of the products.

China, also a huge market for many other products, has helped a number of foreign businesses to partially offset trouble in other major markets amid the global recession.

In addition, China would be the first major economy to recover from the global financial crisis with the help of the 4-trillion-yuan (585-billion-U.S.-dollar) stimulus package, economists estimated.

Multinationals considered China as the most attractive destination for investment, because of market size, higher market growth rates and cheaper labor, according to the World Investment Prospects Survey 2008-2010 by the United Nations Conference on Trade and Development.

General Electric (GE), the U.S. technology and services conglomerate, also is planning expansion in the Northeast, reaffirming the strategic importance of Chinese market.

GE has four factories in Shenyang, capital of Liaoning, with two newly opened last year. The plants produce wind turbines, gas turbines and A/C motorized drive systems for mining operations.

Jack Wen, president and chief executive officer of GE Energy China, said the company planned to add more investment and staff members to its two joint ventures in Shenyang this year.

The Northeast, including provinces of Liaoning, Jilin and Heilongjiang, was "an important area in GE's future," as it had advanced heavy industries and more government support, he added.

To help revive the old industrial base, the central government unveiled in 2003 a series of policies, including tax cuts and subsidies for technology innovation, industry restructuring and infrastructure construction.

The region also has trained a huge army of cheap technicians and engineers, compared with the often low-skilled rural migrant workers in the South, Lin Muxi, professor of economics at Liaoning University, told Chinese media.

In the financial crisis, factors including low cost and advanced industry base put the Northeast in a better position to attract foreign capital than the southern coastal regions, Lin said.

The region actually used 17.58 billion U.S. dollars of foreign investment last year, a 30.7 percent increase from 2007, according to the National Development and Reform Commission. The rate was much higher than the 10 percent for the high-cost Shenzhen, a southern boom city bordering Hong Kong.

Among the optimistic multinationals is ITT Corporation, the world's largest supplier of pumps and systems for transporting and treating water.

Dong Ruiping, external affairs director for ITT China, said the company was planning to increase investment and expand operations in the Northeast. In 2007, ITT Corporation set up a 25-million-U.S.-dollar plant in Shenyang.

The optimism was echoed by Heino Dannemann, executive president of Wuerth (China) Holdings Co., who was busy helping to attract foreign firms to its 40-million-U.S.-dollar industrial park in Shenyang.

Dannemann said Wuerth Group, a German wholesaler of fasteners, screws and construction fittings, among other foreign investors, had confidence in the Chinese market as the massive stimulus package would bring business opportunities.



Mercosur to hold special meeting on global financial crisis

Special Report:Global Financial Crisis



MONTEVIDEO, March 17 (Chinese media) -- The Parliament of South American Common Market (Mercosur) decided on Tuesday to gather the economy ministers of the bloc in a special session to deal with the current economic downturn.



The session will be held on April 27 to 28 in Asuncion, capital of Paraguay, aimed at discussing the "grave crisis" which "already had substantial effects on real economy," the parliament said in a communique.

"The bloc's contraction tendency in the flow of commercial trade could affect the viability and the strategic meanings of the Mercosur," it said.

The parliament also said that Mercosur "must unify and coordinate its position to face the crisis in the Group-20 (G20), World Trade organization (WTO), the International Monetary Fund (IMF) and the World Bank."

The parliament requested member governments to analyze the crisis at the Americas Summit scheduled on April 17 to 19 in Trinidad and Tobago.

Argentina, Brazil, Paraguay and Uruguay are full members of Mercosur, while Venezuela has been waiting for joining the bloc.



Central bank officials: Latin America in better conditions to face financial crisis

Special Report:Global Financial Crisis 



LIMA, March 17 (Chinese media) -- Latin America is in better conditions to face the international financial crisis, officials of central banks of the region said Tuesday.

The conclusion was reached at a seminar titled "The global financial crisis: Answer from the central bank in the western hemisphere" held in Lima, the Peruvian capital, said Peru's Central Bank of Reserves.

Officials from central banks of Latin America discussed the impacts of the financial crisis and they considered that Latin America was in better conditions to face it, the bank said.

The participants shared the experiences of Latin American countries, and discussed the challenges brought by the crisis, said Julio Velarde, chief of Peru's central bank.

The seminary, organized by the Peruvian central bank and the International Monetary Fund (IMF), was also attended by officials from the central banks of Argentina, Brazil, Mexico, Canada, Chile, Uruguay and Colombia, as well as the European Central Bank and international financial institutions.

Velarde said that the crisis demanded different actions and central banks in the world have taken actions of monetary policies to tackle the crisis.

Gilbert Terrier, the representative from the IMF, also said that Latin America was in a better position to face the crisis due to different factors.

The financial system in the region barely had toxic assets, its external and public debts had been reduced over the last year, he said.

"The response from Latin America has been very fast with injections to the liquidity," Terrier added.



ECLA suggests learning lessons from financial crisis

Special Report:Global Financial Crisis





SANTIAGO, March 17 (Chinese media) -- The Economic Commission for Latin America and the Caribbean (ECLA) suggested on Tuesday the governments in the region to learn lessons from the financial crisis in the U.S. to prevent turbulences in their economies.



In an analysis entitled "The Sub-prime Crisis in U.S. and the Financial Regulation and Supervision: Lectures for Latin America and the Caribbean," the ECLA said that among the causes of the crisis is the change on the financial system functioning model, where the banks gave the credits but transferred the risk.

Other factor was the inadequate incentive structure for those who operated the financial system with an asymmetric distribution of the risks.

According to ECLA, for any cause the results were, since September 2008, there were strong drops on the assets and it started the worse systemic financial crisis in many years.

The global crisis will impact the emerging economies, therefore in Latin American countries it will be felt with more strength in the first six months of 2009, ECLA said.

The evolution of the crisis showed that the financial markets have serious failures of self-regulation, which explained by the expectations' roles in its functioning, a high presence of asymmetries and information failures, moral risk, interest conflict and failures on its governability.

For those reasons those markets are susceptible to unsustainable balances "obsessions and panics" that can become into a systemic crisis.

Once taking into account the social effects that produce the financial crisis, the public policy is key, through regulations and supervision and direct investments in the markets and institutions if needed.

The lessons for the region to prevent the financial crisis are on internal regulatory aspects and are gathered in four areas: to have a macro-prudential focus to complement the current regulatory focus; and to design mechanisms translated into a reduction of the pro-cycling of the financial systems

Other lessons include widening the traditional ambit of regulation and supervision of all the institutions with systemic risks, and the relations between the grading and risk agencies, the external auditory companies and the financial institutions.

ECLA said that the financial systems in the region are different to those of the more developed countries. However, the lessons from the current discussion will be also valid to improve the definition of the regulatory frames and good conduction of the public policy in the region.



Geithner: AIG to pay back government for hefty bonuses

Special Report:Global Financial Crisis




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China welcomes new energy cooperation with multinationals

BEIJING, March 18 (Chinese media) -- Vice Premier Li Keqiang

said Wednesday that China welcomed expanded cooperation with multinationals to

develop new energy sources.

Li made the remarks when meeting with Charles Holliday, chairman of the board of U.S.-based chemical company DuPont.















Chinese Vice Premier Li Keqiang (R) meets with Charles Holliday, chairman of the board of U.S.-based chemical company DuPont, in Beijing, capital of China, March 18, 2009. (Chinese media/Pang Xinglei)
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"China has taken measures to cope with the impact of

the international economic situation," Li said.

Li said China hoped DuPont and other multinationals would take the opportunity to increase investment in China and expand cooperation in new energy and other areas.















Chinese Vice Premier Li Keqiang (R) meets with Charles Holliday, chairman of the board of U.S.-based chemical company DuPont, in Beijing, capital of China, March 18, 2009. (Chinese media/Pang Xinglei)
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"I hope this will achieve a win-win result," he said.



Holliday said DuPont was confident about China's

economy and its business development in the country. DuPont would continue

increasing investment and cooperation with China, he said.

DuPont entered the Chinese market 26 years ago and

has set up 39 companies in China.

Chinese official: Four-nation land-sea service to start in NE Asia in May

CHANGCHUN, March 18 (Chinese media) -- A land-sea transportation service linking

China, Russia, the Republic of Korea (ROK) and Japan will be officially launched

in May, a local Chinese official said Wednesday.

Trial operation of the cargo and passenger service will start March 30,

said Chu Tiecheng, deputy director of the Huichun Municipal Navigation Affairs

Bureau. He said an earlier trial, in October, was a success.

Further trials will be conducted sometime in April, he said.

The service will run 800 nautical miles from Huichun, an inland city in

northeast China's Jilin Province, to Niigata port in Japan via the Russian port

of Zarubino and the ROK port of Sokcho.

The vessel will make one round trip a week. It will be able to carry 240

20-foot equivalent units and 1,000 passengers.

The trip in each direction will take about 36 hours, about one-eighth of

the current travel time. The quicker trips will be cheaper and provide a boost

to the regional economy and tourism, Chu said.

A ROK-based joint venture, with a registered capital of 3 million U.S.

dollars, will operate the service. The ROK will have a 51 percent stake, with

China, Japan and Russia holding 16 percent, 16 percent and 17 percent,

respectively.

China to build railway to northwestern Tibetan prefecture

HEZUO, Gansu Province, March 18 (Chinese media) -- A railway linking the Gannan

Tibetan Prefecture in northwestern China's Gansu province to its capital Lanzhou

is to be built, announced local authorities on Wednesday.

Construction of the 174.2 kilometer long railway will cost 8.75 billion

yuan (about 1.3 billion U.S. dollars).

Work will begin at the end of this year and is expected to be complete in

three years, said Li Zhiyong, an official with the Gannan Prefecture Commission

of Development and Reform.

"We hope the railway could finish earlier," he said.

According to Li, the exact route of the railway will be decided before this

May. It is expected to handle trains with speeds of 160 kilometers per hour

after its completion.

With a population of 680,000, 54 percent of whom are Tibetans, the

prefecture in southern Gansu covers 45,000 square kilometers.

"We have no railways, flights and water carriages," said Mao Shengwu, head

of the prefecture. Mao noted that road traffic was the only mode of

transportation they had.

"Poor transportation has hampered development in the prefecture," he said.

Li Zhiyong said the aim of the new railway was to boost the local economy

where stock breeding is the main industry.

Li listed some numbers: if local people wanted to carry out beef and mutton

by roadway, cost for each ton per kilometer was 0.8 yuan. When the railway

opens, the cost should drop to 0.1 or 0.15 yuan.

The railway could also help develop tourism, he added.

Gannan boasts the 300-year-old Labrang Monastery, a center of the Gelug

Sect of Tibetan Buddhism. It also has a swamp on the national protection list,

Li said.

Jigshegya, a 25-year-old Tibetan man living in Luqu county, had never

traveled by train.

"There is a song called 'heavenly route' on the Qinghai-Tibet Railway," he

said. "It described the happiness of people in Lhasa when the railway opened to

traffic in 2006. Now the 'heavenly route' is coming to my home."

China's Hainan linked to national power grid by underwater cable

HAIKOU, March 17 (Chinese media) -- Workers connected China's Hainan Island to the

national power grid Tuesday.

The workers drew one of three planned seabed cables onshore at Linshi Isle

in Chengmai, a county in Hainan Province, through Qiongzhou Strait at 3:28 p.m.

from Xuwen in Guangdong Province, south China. The cable is 32 kilometers long.

The 500-kilovolt seabed power transmission project is the first of its kind

in China and the second in the world after Canada, according to Shang Chun,

deputy general manager of the China Southern Power Grid.

Two other cables will be installed in late March. All three cables,

produced by Nexans of Norway, will eventually be linked up to the Fushan power

transformer substation based in Chengmai County. They will go into service in

late June.

The project will cost about 2.5 billion yuan (about 368 million U.S.

dollars) in all.

The initial capacity will be 600,000 kilowatts. When the project is

completed, the capacity will double.

Once the project is completed, the province will be able to sell surplus

electricity to the national power grid.

Italy to give banks "stress test" as preventive measure

ROME, March 17 (Chinese media) -- Italy will give banks a "stress test" to see if they have enough capital to weather the current economic recession, Italian central bank governor said here on Tuesday.

The initiative is aimed to "put a number on how much they expect to lose from bad loans, how many of their clients will not pay their debts and how they plan to balance this in their budgets," Mario Draghi, the head of Bank of Italy, told parliament.

"Once we have this number, we will ask them: do you have enough cash?" he added.

The governor said the examination period will run until June 2010, when the recession is expected to be over. In making their calculations, banks need to report how much they lost during recession and the amount of debt their clients had at that time.

Referring to the global financial crisis, Draghi said while central banks and the states "were able to keep the financial system from collapsing, insufficient light was shed on the balance sheets of those banks which had invested heavily in what became toxic assets," or bad loans and investments.

"We still do not know for certain how big the losses were for the world's leading banks and how these losses were distributed," Draghi told the lower house finance committee.

The governor also said the Bank of Italy had played the role as the country's financial watchdog. Since February 2006, the bank had drawn attention to the risks created by the derivatives market and had been more focused "on operators rather than on products," he added.



Central bank: Italy's GDP to fall in first quarter of 2009

ROME, March 17 (Chinese media) -- Italy will see its GDP fall in the first quarter of 2009, the fourth drop in a row, Bank of Italy Governor Mario Draghi said on Tuesday.

"All key economic indicators (output, orders and warehouse stock) continue to slow down," he said.

"The first quarter of this year will see GDP decline for the fourth quarter in a row," Draghi told the lower house finance committee.

"It is likely that for all 2009 there will be another significant decline in economic activity, especially for the private sector," the central bank governor added.



Swiss government forecasts worse economic recession in 2009

GENEVA, March 17 (Chinese media) -- The Swiss economy could shrink by 2.2 percent in 2009, worse than previously expected, a government agency said on Tuesday.

The State Secretariat for Economic Affairs (Seco) said it had adjusted its previous prediction that the gross domestic product would decline by 0.8 percent, the official Swissinfo news website reported.

Unemployment, which rose to 3.4 percent in February, is expected to increase to 3.8 percent in 2009 as a whole and to 5.2 percent in 2010, according to the agency.

"The outlook of the global economy, already gloomy at the end of last year, has once again deteriorated considerably since the start of 2009," Seco said in a statement.



China Enterprises Index up 1.66% on March 18

Special Report:Global Financial Crisis





HONG KONG, March 18 (Chinese media) -- Hang Seng China Enterprises Index on the

Hong Kong Stock Exchange went up 124.44 points, or 1.66 percent, on Wednesday to

close the day's trading at 7, 632.52.

The H-shares index, initiated in August 1994 and readjusted on March 10,

2008, tracks the overall performance of 42 Chinese mainland state-owned

enterprises listed on the Hong Kong Stock Exchange.

Hang Seng China H-Financials Index moved up 162.40 points, or 1. 60

percent, to close at 10,325.71.

The H-Financials Index, initiated on Nov. 27, 2006, readjusted on Sept. 10,

2007, tracks the performance of nine major banks and insurers of the Chinese

mainland.

Hang Seng Mainland Composite Index went up 44.65 points, or 1. 78 percent,

to close at 2,553.16.

Introduced on Oct. 3, 2001 with the latest readjustment effective on Oct.

20, 2008, Hang Seng Mainland Composite Index gauges the performance of 130 Hong

Kong-listed companies with principal places of business in Hong Kong and the

Chinese mainland.

Hang Seng China-Affiliated Corporations Index moved up 44.25 points, or

1.48 percent, to close at 3,025.36.

The index tracks the performance of 33 locally listed companies with a

significant equity interest held by entities in the Chinese mainland.

HK extends tax break for electric vehicles

HONG KONG, March 18 (Chinese media) -- The first registration tax exemption for

electric vehicles has been extended another five years to March 31, 2014.

The extension's resolution was passed by the Legislative Council of Hong

Kong on Wednesday.

The exemption was first granted in 1994-95 and was extended in 1997-98,

2000-01, 2003-04 and 2006-07.

Hushen 300 index up on March 18

BEIJING, March 18 (Chinese media) -- The Hushen 300 Index reflecting the performance of China's Shanghai and Shenzhen stock exchanges closed at 2,332.65 points Wednesday, up 10.25 points, or 0.44 percent, from the previous close.

About one fifth of the total stocks listed on the two markets are chosen as samples of the Hushen 300 Index, accounting for 60 percent of the market value in China's stock market.

Chinese shares edge up 0.24% led by material producers

BEIJING, March 18 (Chinese media) -- Chinese equities rose

0.24 percent on Wednesday led by material stocks such as coal, oil and steel.

The benchmark Shanghai Composite Index added 0.24

percent, or 5.40 points, to 2,223.73. The Shenzhen Component Index rose 0.91

percent, or 76.10 points, to 8,465.96.















A woman looks at the share price screen

at a stock trading hall in Chongqing, southwest China, March 18, 2009.

China's benchmark Shanghai Composite Index on the Shanghai Stock Exchange

closed at 2,223.73 points Wednesday, up 5.4 points, or 0.24 percent, from

the previous close. The Shenzhen Component Index on the Shenzhen Stock

Exchange closed at 8,465.96 points, up 76.1 points, or 0.91 percent, from

the previous close. (Chinese media/Zhou Hengyi)
Photo Gallery



Gains outnumbered losses by 561 to 231 in Shanghai

and 476 to 196 in Shenzhen.

Combined turnover was 194.3 billion yuan (24.89

billion U.S. dollars), up from 170 billion yuan on the previous trading day.

Coal shares gained across the board as crude prices

continued to gain and closed above 49 U.S. dollars a barrel, the highest price

in the past three months. This led investors to believe rising oil prices would

boost demand for alternative resources, analysts said.

Stocks of Anhui-based SDIC Xinji Energy Company rose

by daily limit of 10 percent to 10.19 yuan. Shanxi Guoyang New Energy Co. closed

at 15 yuan, up 5.78 percent.

The rising crude prices also lifted oil stocks.

PetroChina edged up 0.09 percent to 10.91 yuan.

The steel sector saw rises as the Shanghai Stock

Exchange tested operations of futures transactions of two types of steel

products Wednesday. Preparations for steel futures will be completed by March

25.

Both Gansu Jiu Steel Group and Liaoning-based Bengang

Steel Plates Co. rose 9.98 percent. Their shares closed at 7.27 yuan and6.06

yuan, respectively.

The textile and garment sector advanced, as investors

were encouraged by media reports that the government may further lift tax

rebates for the industry in a detailed support plan.

Sinotex Investment and Development Co. gained 4.91

percent to 4.7 yuan. Ningxia Zhongyin Cashmere Co. was up 6.32 percent to close

at 6.06 yuan.

The majority of medical care stocks gained on media

reports that detailed methods of China's medical reform would be released.

Chengdu Hoist Inc. was up 9.95 percent to 8.07 yuan. Wuhan Jianmin

Pharmaceutical Group rose 6.36 percent to 7.02 yuan.

Denmark to partner Zimbabwe in economic revival

Special Report:Global Financial Crisis



HARARE, March 18 (Chinese media) -- Danish Minister of Cooperation Development Ulla Tornaes arrived in Harare on Tuesday to assess the situation following the formation of the inclusive Government, ZBC News reported on Wednesday.

This makes Denmark the first EU country to start dialogue with Harare. Speaking soon after her arrival at Harare International Airport on Tuesday, Tornaes said she wants to get first hand information on the progress.

"I have read a lot about the country and I am here to get an impression of the progress in the country," she said. Tornaes, however, said the formation of the inclusive Government was an important step forward adding that the new administration should stick to the road map crafted in the broad-based agreement.

"The Government and the road map are important for the fulfilling of the GPA (Global Political Agreement) and would give an opportunity for countries to open up dialogue with Zimbabwe," she said.

The Danish minister began her mission with a meeting with Foreign Affairs Minister Simbarashe Mumbengegwi before holding further talks with Zimbabwe Acting Prime Minister Thokozani Khupe and Deputy Prime Minister Arthur Mutambara.

Khupe has said the visit by the Danish Minister for Development Cooperation Ullar Tornaes is an indication that the outside world has accepted and is now beginning to embrace the inclusive government.

Speaking to journalists, Khupe said Denmark has, through its minister, expressed its willingness to partner Zimbabwe in its economic revival programs.

Earlier on the Danish delegation met the Minister of Foreign Affairs Simbarashe Mumbengegwi who revealed that the Zimbabwean government is committed to re-establishing normal relations with the European Union which existed prior to the imposition of illegal sanctions.

S Korea's debt restructuring agency buys bad assets from savings banks

Special Report:Global Financial Crisis



SEOUL, March 18 (Chinese media) -- South Korea's state-run debt restructuring agency said Wednesday that it made a purchase deal on local savings banks' bad assets worth 1.24 trillion won (875 million U.S. dollars).

With the current purchase deal, the Korea Asset Management Corp. (KAMCO) has thus far bought 1.74 trillion won, or 1.23 billion U.S. dollars, worth of property-related loans from local mutual savings banks, the agency said.

It also plans to buy out bad assets from commercial lenders, which have been suffering from a surge in bad loans amid a severe economic slump.

The South Korean government is set to launch a restructuring fund worth 40 trillion won (28.2 billion U.S. dollars) to clear out bad assets from local financial companies.

Tokyo stocks close slightly higher to five-week peak

Special Report:Global Financial Crisis



TOKYO, March 18 (Chinese media) -- Japanese share prices extended winning streak for the fourth consecutive trading day, closing up 0.29 percent on Wednesday at a new five-week high.



The Nikkei-225 index gained 23.04 points to end at 7,972.17. At one point in the morning, it stood up the psychologically important line of 8,000.

The broader Topix index of all first-section shares climbed 4.03 points, or 0.53 percent, to 764.67.

Leading gainers were insurance, gas and electric, and banking issues. Major losers included pulp and paper, and rubber product issues.

Despite gains in the index, declining issues outnumbered advancing ones 830 to 758, with 126 others remaining unchanged on the First Section.

Trading volume on the main section came to 2,389.25 million shares, up from Tuesday's 2,323.40 million.

The TSE's Second Section index was up 5.15 points, or 0.29 percent, to 1,795.77 on a volume of 32.77 million shares. On the Osaka Securities Exchange, the near-term June Nikkei 225 index futures contract was up 30 points to 7,920.



Toshiba to have new president in June amid crisis

Special Report:Global Financial Crisis





TOKYO, March 18 (Chinese media) -- Toshiba Corp. said Wednesday it will promote Norio Sasaki, corporate senior executive vice president, to president and CEO in late June, replacing Atsutoshi Nishida in a bid to better cope with the economic slump.

The appointment is subject to approval by the board meeting following the ordinary general meeting of the shareholders, the company said in a statement.

Concurrent with the election of the new president and CEO, Nishida will become Chairman of the Board of Toshiba Corporation in late June. The current Chairman, Tadashi Okamura, will become an Advisor to the Board.

Sasaki joined Toshiba in 1972 after he graduated from Tokyo's Waseda University in Mechanical Engineering department.

Toshiba is cutting 4,500 jobs and slashing investment as it sees a net loss of 280 billion yen (2.8 billion dollars) in the current financial year to March.

The leadership reshuffle came after other Japanese electronics giants including Panasonic and Sony announced similar management reshuffle amid the global downturn.









Japan's central bank keeps key rate unchanged, raises bond purchases

Special Report:Global Financial Crisis 



TOKYO, March 18 (Chinese media) -- The Bank of Japan (BOJ), or the central bank, left its key interest rate unchanged at 0.1 percent Wednesday.

It is the third consecutive month that the BOJ kept the rate the same.

At the central bank's two-day policy meeting, the BOJ's eight-member Policy Board voted unanimously to leave the target rate for unsecured overnight call money unchanged.

The BOJ also decided to raise its outright purchase of long-term government bonds to 1.8 trillion yen (18.3 billion U.S. dollars) per month from 1.4 trillion yen to boost liquidity in the money market and curb a rise in long-term interest rates, it said in a statement.

However, with the key interest rate at a near-zero level, the central bank has been left not too much leverage. It cut the key rate last October and December and had outright purchase of commercial papers and corporate bonds from financial institutions.

But it projects that the economy will start recovering from the latter half of fiscal 2009, with price declines abating as global financial markets regain stability and overseas economies move out of their deceleration phase, according to the statement.







China-Africa Development Fund opens in Johannesburg















Chen Yuan (2nd L), chairman of the board

of the China Development Bank, Zhong Jianhua (2nd R), China's ambassador

to the Republic of South Africa and Elizabeth Thabethe (1st L), deputy

minister of South Africa's Ministry of Trade and Industry attend the

opening ceremony of the first representative office of the China-Africa

Development Fund in Johannesburg, South Africa, March 16, 2009. The

China-Africa Development Fund (CADFund) that will boost economic

development in Africa by encouraging investment by Chinese enterprises,

opened its first representative office in Africa in Johannesburg on

Monday.(Chinese media/Liang Shanggang)
Photo

Gallery

















Chen Yuan (front R), chairman of the

board of the China Development Bank and South African government's

representative Matthews Phosa (front L), attend the opening ceremony of

the first representative office of the China-Africa Development Fund in

Johannesburg, South Africa, March 16, 2009. The China-Africa Development

Fund (CADFund) that will boost economic development in Africa by

encouraging investment by Chinese enterprises, opened its first

representative office in Africa in Johannesburg on Monday.(Chinese media/Liang

Shanggang)
Photo

Gallery






















Zhong Jianhua, China's ambassador to the

Republic of South Africa, addresses the opening ceremony of the first

representative office of the China-Africa Development Fund in

Johannesburg, South Africa, March 16, 2009. The China-Africa Development

Fund (CADFund) that will boost economic development in Africa by

encouraging investment by Chinese enterprises, opened its first

representative office in Africa in Johannesburg on Monday.(Chinese media/Liang

Shanggang)
Photo

Gallery

















Elizabeth Thabethe (front L), deputy

minister of South Africa's Ministry of Trade and Industry, and

China-Africa Development Fund (CADFund) CEO Chi Jianxin (front R) shakes

hands after sign on the memorandum at the opening ceremony of the first

representative office of the China-Africa Development Fund, in

Johannesburg, South Africa, March 16, 2009. The China-Africa Development

Fund (CADFund) that will boost economic development in Africa by

encouraging investment by Chinese enterprises, opened its first

representative office in Africa in Johannesburg on Monday.(Chinese media/Liang

Shanggang)
Photo

Gallery




WB: Protectionist measures show worrisome rise since beginning of financial crisis

Special Report:Global Financial Crisis 



WASHINGTON, March 17 (Chinese media) -- Since G20 leaders signed a pledge in November 2008 to avoid protectionist measures, several countries, including 17 of the G20, have implemented 47 measures that restrict trade at the expense of other countries, a new World Bank study said on Tuesday.

Since the beginning of the financial crisis, officials have proposed or implemented roughly 78 trade measures, according to the World Bank's monitoring list of trade and trade-related measures.

Of these, 66 involved trade restrictions, and 47 trade-restricting measures eventually took effect. The effects of these measures are likely minor relative to the size of unaffected markets but they have a significant negative effect on particular exporters shut out of markets.

"Leaders must not heed the siren-song of protectionist fixes, whether for trade, stimulus packages, or bailouts," said World Bank Group President Robert B. Zoellick in a statement.

"Economic isolationism can lead to a negative spiral of events such as those we saw in the 1930s, which made a bad situation much, much worse," he warned.

The cost of inaction on the Doha Agenda is rising, the World Bank study cautions. To date most countries have not yet raised tariffs to bound levels or taken full advantage of headroom on agricultural subsidies.

However, as the recession deepens, many countries may be tempted to. This threat underscores the importance of pushing forward with a rapid conclusion of the Doha round.

The study suggests that the G20, for its part, could adopt additional measures that would strengthen the fragile consensus against further protectionism.



Dollar rises slightly against most major currencies

Special Report:Global Financial Crisis





NEW YORK, March 17 (Chinese media) -- The dollar rose slightly against most major currencies on Tuesday as investors chose to be cautious ahead of rate decisions from the U.S. and Japan.



Federal Open Market Committee, the monetary policymaking body of the U.S. Federal Reserve, began a two-day meeting on Tuesday. Analysts expected that the U.S. central bank would hold key rate unchanged at a level near zero and announce more plans to stabilize the financial system.

The Bank of Japan also started a two-day policy board meeting on Tuesday. It was expected to hold key rate at a record low level of 0.1 percent. The Japan's central bank said on Tuesday that it was considering lending up to one trillion yen (about 10 billion dollars) to commercial banks in a latest effort to revive lending.

U.S. privately-owned housing starts in February rose unexpectedly by 22.2 percent to a seasonally adjusted annual rate of 583,000, the U.S. Commerce Department reported on Tuesday.

Risk appetite in foreign exchange market was boosted by the report in early trading, but faded later as investors focused on monetary policy meetings in the U.S. and Japan.

The euro bought 1.3005 dollars in late New York trading compared with 1.2981 dollars it bought late Monday. The pound fell to 1.4026 dollars from 1.4085 dollars.

The dollar rose to 1.2703 Canadian dollars from 1.2688 Canadian dollars, and fell to 1.1831 Swiss francs from 1.1863 Swiss francs. It rose to 98.46 Japanese yen from 98.27 Japanese yen.



Study: Digital music purchases increase in U.S.

SAN FRANCISCO, March 17 (Chinese media) -- More people are buying more digital

music downloads in the United States, entertainment market research company NPD

said on Tuesday.



A new study released by NPD showed that the number of U.S. Internet users

paying for digital music increased to 36 million in2008, up more than 8 million

compared with a year ago.

Purchases of online digital music downloads increased by 29 percent since

last year and now account for 33 percent of all music tracks purchased in the

United States, the study said.

Meanwhile, it also found the trend of CD sales decline continued with

nearly 17 million fewer CD buyers in 2008 compared to the prior year.

"Consumers' primary reason for not purchasing CDs was that they were

spending less on entertainment overall, because of the recession," NPD said in a

press release.

"Among the reasons consumers cited for preferring digital music over CDs

was that they could choose only the songs they wanted to purchase, and could

immediately download and listen to their purchases," the press release added.

Dell launches world's thinnest laptop computer

SAN FRANCISCO, March 17 (Chinese media) -- Dell officially launched on Tuesday a high-end laptop computer which the company said is the thinnest in the world.

The laptop is the first product under Dell's Adamo brand. Adamois derived from the Latin word meaning "to fall in love."

With a thickness of 0.65 inches (1.65 centimeters) and available in onyx and pearl colors, the new Adamo laptop is thinner than Apple's MacBook Air.

Adamo will "serve as a flagship in a line of products created to disrupt the personal computing space with the combination of new design aesthetics, personalization choices and sought-after technologies," Dell said in a statement.

However, some analysts doubt how the Adamo laptop, with price tags starting at 1,999 U.S. dollars, will be received by the cash-strapped consumers under the current economic environment.

Earlier this month, market research company Gartner predicted that as a result of economic downturn, global personal computer shipments will drop 11.9 percent from last year in 2009, the sharpest year-over-year decline.

The Adamo laptop is available for on-line pre-order from Tuesday and will start shipping on March 26, Dell said.



Apple unveils new iPhone operating system

SAN FRANCISCO, March 17 (Chinese media) -- Apple on Tuesday gave preview of its upcoming iPhone operating system which has new features such as cut, copy and paste texts.

The third version of iPhone operating system (OS 3.0) is now available for developers and will be open to customers this summer, Apple said.

The new software is packed with over 100 new features including cut, copy and paste texts within or across applications, a function requested by iPhone users.

iPhone customers can download the new software for free this summer while Apple's iPod Touch media player users will have to pay 9.95 U.S. dollars for the upgrade.

The software upgrade will keep Apple "years ahead" of the market competition, Philip Schiller, the company's senior vice president of worldwide product marketing, said in a statement.

According to latest figures released by Apple, the company has sold more than 30 million iPhones and iPod Touches so far.

Its groundbreaking on-line store now has more than 25,000 applications available to customers in 77 countries and regions, Apple said.  



Oil prices rise above $49

Special Report:Global Financial Crisis











Graphics shows the price of light, sweet crude oil in the past 13 months. The price of light, sweet crude for April delivery rose 1.81 dollars to settle at 49.16 dollars a barrel on the New York Mercantile Exchange, which is the highest closing price in more than three months. on March 17, 2009.(Chinese media/Zhang Liyun)





Graphics shows the price of light, sweet

crude oil in the past 13 months. The price of light, sweet crude for April

delivery rose 1.81 dollars to settle at 49.16 dollars a barrel on the New

York Mercantile Exchange, which is the highest closing price in more than

three months. on March 17, 2009.(Chinese media/Zhang Liyun)
Photo

Gallery



NEW YORK, March 17 (Chinese media) -- Crude oil prices

continued to gain and closed above 49 U.S. dollars a barrel on Tuesday on the

rally in the stocks market.

Light, sweet crude for April delivery rose 1.81

dollars to settle at 49.16 dollars a barrel on the New York Mercantile Exchange,

which is the highest closing price in more than three months.

Crude futures obtained support from the U.S. stocks

market which surged on positive economic data. The U.S. Commerce Department

reported Tuesday that new home construction jumped 22.2 percent from January to

a seasonally adjusted annual rate of 583,000 units in February. Applications for

building permits also rose in February by 3 percent to an annual rate of

547,000. Economists were expecting both readings to drop.















A worker fills gas for a car at a gas

station in New York, capital of the United States, on March 17,

2009.(Chinese media/Liu Xin)
Photo Gallery



Meanwhile, the U.S. Labor

Department said wholesale prices edged up 0.1 percent in February with a 1.3

percent increase in energy prices. Gasoline prices jumped 8.7 percent in

February, which boosted investors' confidence that the outlook of the energy

demand will possibly revive with the coming of driving season.

In London, Brent crude for May delivery gained 1.78

dollars to settle at 48.24 dollars a barrel on the ICE Futures

Exchange.

















A worker fills gas for a car at a gas

station in New York, capital of the United States, on March 17, 2009. U.S.

light crude for April delivery settled up $1.81 at $49.16 on the

expiration day for April crude oil options, the highest settle since Dec.

1, 2008. (Chinese media/Liu Xin)
Photo

Gallery




U.S. refinery expansion delayed by

poor market


HOUSTON, March 17 (Chinese media) --

Houston-based refiner Motiva Enterprises is delaying the planned completion of

the expansion of its Port Arthur refinery due to poor market conditions, the

company's spokesman said Tuesday.









Motiva, a joint venture between Shell Oil and Saudi

Refining Inc., had planned to complete the 7-billion-U.S.-dollar project by late

2010, but now has to postpone it until the first quarter of 2012, local media

quoted Motiva spokesman Stan Mays as saying. Full story

U.S. stocks rally on economic

data


NEW YORK, March 17

(Chinese media) -- U.S. stocks staged a strong rally on Tuesday as better-than-expected

economic reports helped offset disappointing corporate news.



The U.S. Labor Department reports wholesale prices

edged up 0.1 percent in February, which was smaller than the 0.4 percent

increase economists had expected.Full story

Dollar rises slightly against most

major currencies


NEW YORK,

March 17 (Chinese media) -- The dollar rose slightly against most major currencies on

Tuesday as investors chose to be cautious ahead of rate decisions from the U.S.

and Japan.

Federal Open Market Committee, the monetary

policymaking body of the U.S. Federal Reserve, began a two-day meeting on

Tuesday. Analysts expected that the U.S. central bank would hold key rate

unchanged at a level near zero and announce more plans to stabilize the

financial system. Full story

Gold falls for second session as

economy sentiment eases


CHICAGO,

March 17 (Chinese media) -- Gold futures on the COMEX Division of the New York

Mercantile Exchange declined for the second straight day Tuesday on speculation

that the economy turmoil eased as stock market bounced continuously, further

reducing gold's safe-haven appeal. Silver ended lower too, while platinum rose

slightly.



Gold price for April delivery was down 5.20 U.S.

dollars, or 0.6 percent, to settle at 916.80 dollars an ounce. May silver closed

at 12.67 dollars per ounce, losing 22 cents. April platinum gained2.40 dollars

to 1,051.80 dollars per ounce. Full story



Gold falls for second session as economy sentiment eases

Special Report:Global Financial Crisis



CHICAGO, March 17 (Chinese media) -- Gold futures on the

COMEX Division of the New York Mercantile Exchange declined for the second

straight day Tuesday on speculation that the economy turmoil eased as stock

market bounced continuously, further reducing gold's safe-haven appeal. Silver

ended lower too, while platinum rose slightly.

Gold price for April delivery was down 5.20 U.S.

dollars, or 0.6 percent, to settle at 916.80 dollars an ounce. May silver closed

at 12.67 dollars per ounce, losing 22 cents. April platinum gained2.40 dollars

to 1,051.80 dollars per ounce.

The Commerce Department reported that U.S. housing

starts rose 22 percent to an annual rate of 583,000 in February from a revised

January estimate of 477,000. It was the first increase in recent eight months,

while economists had expected it to fall to 450,000 from the 466,000 originally

reported for the previous month.

Sparked by the unexpectedly strong housing data, the

U.S. Stock market in New York soared to a new 4-week closing high as the Dow

industrials climbed 2.5 percent on Tuesday, reducing not only investors'

sentiments on economy crisis but also the safe-haven appeal of the precious

metal.

The Federal Open Market Committee opened its two-day

meeting and a rate decision is expected to be made on Wednesday, which is widely

anticipated to be unchanged at a range of zero to 0.25 percent.





Chinese shares up 0.45% at midday led by material producers

BEIJING, March 18 (Chinese media) -- Chinese shares were up

0.45 percent, led by material producers when morning trading ended Wednesday.



The benchmark Shanghai Composite Index was up 0.45

percent to 2,228.21 points and the smaller Shenzhen index rose 1.05 percent to

8,478.02 points.

Oil stocks rose as crude prices continued to gain and

closed above 49 U.S. dollars a barrel. PetroChina was up 0.73 percent to 10.98

yuan and Sinopec 0.83 percent rose to 8.49 yuan and.

The news also lifted coal shares with Anhui Hengyuan Coal

Industry and Electricity Power Co. up 6.12 percent to end at 19.42 yuan.

The steel sector also saw rises as the Shanghai Stock

Exchange tested operation of futures transactions of two types of steel products

Wednesday. Angang Steel Company gained 3.07 percent to close at 8.05 yuan.

Beijing Sanyuan Foods Co. rose by the daily limit of

10 percent to 7.33 yuan after the dairy firm reported a 87 percent growth in its

net profit in 2008.

Financial stock pared gains as most financial shares

fell after the World Bank cut its forecast for China's 2009 economic growth

again to 6.5 percent from 7.5 percent in a report released Wednesday.

China Minsheng Banking Corp. lost 1.03 percent to close

at 4.82 yuan. China Merchants Bank dropped 0.8 percent to 14.86 yuan.

Chinese shares open slightly higher tracking Wall Street rally

BEIJING, March 18 (Chinese media) -- Chinese shares open slightly higher on Wednesday, with the benchmark Shanghai Composite Index gained 0.44 percent, or 9.66 points, to 2,227.98.



The smaller Shenzhen Component Index was up 0.58 percent, or 48.62 points, to 8,438.48.

Overnight, the U.S. stocks staged a strong rally as better-than-expected economic reports helped offset disappointing corporate news.

The Dow Jones Industrial Average rose 178.73, or 2.48 percent, to 7,395.70.

No "crowding out" seen in China's treasury bond sales plans

Special Report:Global Financial Crisis





by Chinese media writers Liu Jie and Cheng Yunjie

BEIJING, March 17 (Chinese media) -- China plans to offer several hundred billion

yuan in treasury bonds this year to finance its record fiscal deficit and

massive government economic-stimulus program, a debt plan that's raising concern

about possible "crowding out" of private-sector borrowers and investment.

However, economists and analysts interviewed by Chinese media said that China

would be able to avoid that outcome. The hefty treasury bill sales, rather than

crowding out the private sector, might actually help by encouraging companies to

participate in the stimulus plan, these experts said.

Further, a higher volume of treasury sales might be welcomed by the

investing public, with whom the T-bills are a popular alternative to

low-yielding bank deposits and a volatile stock market.

China plans 950 billion yuan (139 billion U.S. dollars) in treasury bill

sales, of which 200 billion will be issued on behalf of local governments, to

fund the record fiscal deficit and spur growth amid the global slowdown.

The actual number could be more than one-third higher. The Central T-bond

Registration and Settlement Co., Ltd. (CTRS), the depository house for China's

major bonds, forecast in a report in January that total government debt issues

would exceed 1.3 trillion yuan this year, a rise of 60 percent from 2008.

NO CROWDING OUT

Economic theories say that a large influx of treasury bonds will push up

market interest rates, or the borrowing costs for individuals and institutions.

As a result, the private sector will find it too costly to borrow and scale back

investment, thus impeding economic growth.

But professor Zhu Qing of the School of Finance at Renmin University of

China said: "The 'crowding out' effect has a precondition: that the market has a

pressing need for money, which is not a reality among all Chinese enterprises."

Bank lending has ballooned this year, with new loans exceeding 2.69

trillion yuan in the first two months. In January alone, lending nearly doubled

from a year earlier. But not much of that money is expected to go into long-term

investment, since bill financing with 180-day maturities comprised nearly half

of the new loans.

Zhu noted as well that part of the new lending was intended to finance

projects linked to the 4-trillion yuan stimulus package, in answer to the

government call for more credit support for infrastructure construction.

"Profitable large enterprises don't have an urgent need for money. As for

small ones, they don't have an appetite to borrow as declining demand has

dampened their desire to expand production," according to Zhu.

As the global slump has deepened, China, with the world's third-largest

economy, has seen external demand weaken and domestic spending stall.

Exports, which contributed more than 20 percent to gross domestic product

(GDP) growth, plunged 25.7 percent year-on-year in February, the worst

performance in a decade. It was the fourth month of decline in a row for

exports.

Domestic consumption has also been soft. Retail sales grew only15.2 percent

in the first two months to 2 trillion yuan. The figure was lower than the

20-percent-plus increase a year earlier, the National Bureau of Statistics (NBS)

said last Thursday.

Zhu said the inadequate social safety net constrains individuals' spending.

Rather, they save against unemployment and other problems.

"Under such conditions, not all Chinese enterprises have the drive to

borrow to enhance production. No demand, no supply," He said.

He said that even with huge government bond sales, interest rates were

unlikely to edge up, and the "crowding out" effect on private investment would

not occur, he said. "Interest rates rise only when money becomes scarce," Zhu

explained.

LOW RATES AN OPPORTUNITY

Low rates meant it was an opportune time for the government to issue debt

cheaply, said Zhu.

The People's Bank of China (PBOC), the country's central bank, has cut

interest rates five times since September to spur growth.

Low rates might even make it possible for more companies to issue bonds

now, regardless of the government's plans, said Liu Yuhui, researcher with the

institute of finance of the Chinese Academy of Social Sciences.

He noted the increased corporate bond issues could help companies diversify

their funding sources and allow banks to diversify their risks.

"As money for treasury bill purchases mainly comes from deposits held by

individuals and institutions, overall money supply remains steady, so there

won't be inflationary pressure," he said.

LIMITED MARKET IMPACT

China's treasury bond sales averaged 760 billion yuan a year from 2004 to

2006, while the country was pursuing "prudent" monetary policy to cope with an

overheated economy.

Treasury bond issues jumped to 2.35 trillion yuan in 2007, but that was

because of a 1.55 trillion yuan special bond issue to sterilize excess bank

liquidity. Without that special issue, sales would have been about 800 billion

in 2007.

Sales totaled 812.5 billion yuan last year as the economy began to cool and

liquidity declined.

Can the market absorb this year's bond sales, which could total as much as

1.3 trillion yuan?

Data from the PBOC last week showed that deposits held by individuals and

institutions totaled 4.98 trillion yuan by the end of February.

"The planned treasury bond sales value would be equal to 26 percent of

deposits, so it won't be difficult for Chinese banks to underwrite those bonds,"

said Bai Jingming, an economist with the Ministry of Finance.

Premier Wen Jiabao said in the government work report to the annual

legislative session on March 5 that up to 5 trillion yuan of new loans would be

offered this year to support investment and revive the economy. The target was

50 percent higher than that for last year and somewhat more than the 4.9

trillion yuan of actual loans in 2008.

Given that lending was 2.6 trillion yuan in just the first two months of

this year, it's quite likely that full-year lending will vastly exceed the

target.

"Ample liquidity means it will be easy for Chinese banks to deal with hefty

bond sales hitting the market," said Bai.

INSTITUTIONS DOMINATE

The "Big Four" state-owned commercial banks underwrite most of the

government bonds.

Most bonds are held by banks, insurance companies, securities firms and

corporations in China. The bonds trade in a variety of secondary markets

including the exchange market, the over-the-counter market and the inter-bank

market where 95 percent of the transactions are made.

The inter-bank market dominates because of a ban imposed in 1997 on banks'

trading of bonds on exchanges. The ban followed cases of banks illegally

channeling bond-market repurchase agreement funds to the stock market. That ban

was partially lifted in January, when regulators decided to allow listed

commercial banks to trade bonds on exchanges for a trial period of unspecified

length,

China's bond market value was about 7.06 trillion yuan last year, CTRS data

show. The market is expected to contract in 2009 to 4.5 trillion, despite the

anticipated rise in treasury issues, because the PBOC will cut its note issues

by about 70 percent.

The central bank, like the treasury, issues debt to reduce liquidity. But

with a slowing economy, the PBOC was unlikely to need to do so this year,

according to the CTRS.

Of total new issues this year, treasury bills and central bank notes would

comprise about 51 percent, according to CTRS.

Financial bonds (those issued by state-controlled banks) would account for

26 percent of new issues. Corporate bonds and short-term corporate financing

bills would comprise the rest.

CORPORATE BONDS MARGINAL

Government bonds and central bank notes have dominated China's debt market

for years, while the role of corporate bonds has been marginal, said Yang

Zhiyong, researcher with the Chinese Academy of Social Sciences. There were many

reasons for this situation, he said.

Yang said the corporate bond portion of the market was hampered by the

segmented regulatory system, not the volume of treasury bill sales. Two

government agencies are involved in approving corporate bond issues, the

National Development and Reform Commission (NDRC, the top planning agency) and

the China Securities Regulatory Commission (CSRC).

Further, many Chinese investors consider corporate bonds too risky. "It

takes time for people to realize that corporate bonds actually offer more stable

returns than the stock market," said Yang.

In contrast, treasury bonds are a favorite for risk-averse investors,

especially during equity bear markets of the severity seen in the past 18

months. Individuals often line up for hours outside banks, the only place they

can buy treasury debt, only to find the bills are sold out.

Interest rates for this year's treasury debt, with three- to five-year

maturities, are 0.4 percentage points higher than for fixed deposits at banks.

EYE ON DEBT

"Even though the deficit expansion is in a safe range, we should be wary of

risks from a continuous debt expansion," Bai warned, because there might be more

years of high deficits ahead.

Based on experience, China's "pro-active" fiscal policy and associated

deficits could be expected to last for several years, said Bai. He noted that

after the Asia crisis, a pro-active fiscal policy led to three years of budget

deficits.

"A large deficit is predictable at least three years ahead and the actual

deficit for 2009 is set to be higher than the amount forecast in the budget," he

said.

The government should carefully consider borrowing costs, as it could not

rule out the possibility of interest rate rises in the future, he said.



Expert: Fiscal stimulus plans to spur revenue

growth


BEIJING, March 15 (Chinese media) -- Jing Linbo, a Beijing-based

economist, told Chinese media Sunday that although China's revenues declined in the

first two months, the government's stimulus package can be conducive to revenue

growth.

China's fiscal revenue fell 11.4 percent in January and

February from the previous year to 1.02 trillion yuan (149.7 billion U.S.

dollars) as economic growth slowed. Tax revenue shrank 13 percent in the same

period to 923.73 billion yuan, according to figures from the Ministry of

Finance. Full story

Stimulus plan buys time for China



BEIJING, March 15 (Chinese media) -- China's 4 trillion yuan

(about 588 billion U.S. dollars) stimulus plan is paying off, providing the

country with time to wait for a revival of the world economy, said experts.



Four months after China launched the two-year investment

plan, which is intended to revitalize the world's third-largest economy, its

industrial output growth appears to be recovering and the decline in its imports

has started to ease. Full story

China Enterprises Index down 1.2% on March 17

HONG KONG, March 17 (Chinese media) -- Hang Seng China Enterprises Index on Hong

Kong Stock Exchange went down 91.27 points on Tuesday, or 1.2 percent lower, to

close the day's trading at 7,508. 08.

The H-shares index, initiated in August 1994 and readjusted on March 10,

2008, tracks the overall performance of 42 Chinese mainland state-owned

enterprises listed on the Hong Kong Stock Exchange.

Hang Seng China H-Financials Index moved down 137.20 points, or 1.33

percent, to close at 1,0163.31.

The H-Financials Index, initiated on Nov. 27, 2006, readjusted on Sept. 10,

2007, tracks the performance of nine major banks and insurers of the Chinese

mainland.

Hang Seng Mainland Composite Index went down 41.57 points, or 1. 63

percent, to close at 2,508.51.

Introduced on Oct. 3, 2001 with the latest readjustment effective on Oct.

20, 2008, Hang Seng Mainland Composite Index gauges the performance of 130 Hong

Kong-listed companies with principal places of business in Hong Kong and the

Chinese mainland.

Hang Seng China-Affiliated Corporations Index moved down 89.73 points, or

2.92 percent, to close at 2,981.11.

The index tracks the performance of 33 locally listed companies with a

significant equity interest held by entities in the Chinese mainland.

Hong Kong stock market ends five-day rally

Special Report:Global Financial Crisis





by Chen Jipeng

HONG KONG, March 17 (Chinese media) -- Hong Kong stocks tracked overnight losses

on the Wall Street to end its five-day rally on Tuesday, but losses were limited

to 0.76 percent by support from a surge on the Chinese mainland market.

The benchmark Hang Seng Index opened 0.21 percent lower in the morning

following overnight losses on the U.S. stock markets, but reversed losses to top

the 13,000 mark at 13,051.28 at lunch break, up 74.57 points, or 0.57 percent.

The Hang Seng Index closed lower on profit taking at 12,878.09 after moving

between 12,854.05 and 13,226.31. Turnover rose to 49 billion HK dollars (6.28

billion U.S. dollars) from Monday's 46.7 billion HK dollars (5.99 billion U.S.

dollars).

Market heavyweight and banking giant HSBC alone contributed a rise of 61.2

points to the blue chip index as it gained 1.15 HK dollars, or 2.88 percent, at

41.15 HK dollars. It once even surged to 42 HK dollars during the day's trading.



Goldman Sachs on Tuesday upgraded HSBC from sell to neutral, citing the

bank's decision to run off loss-making businesses in the United States and its

relative strength compared to most of its peers in Europe.

China Construction Bank offered the second largest support by gaining 0.05

HK dollars, or 1.19 percent, to close at 4.25 HK dollars.

In contrast to the pressure from the Wall Street on any systematic risks

further ahead, the Chinese mainland turned out a comfort as the Shanghai market

surged 3.02 percent to close above the 2,200 mark as investors bet on further

stimuli.

One of the companies under close watch, Bank of Communications edged up

0.59 percent to 5.15 HK dollars as it is expected to release annual results on

Wednesday to usher in the earnings season for the mainland-based financial

institutions.

Bank of China finished flat at 2.33 HK dollars, while its local unit BOC

Hong Kong was down 3.3 percent at 7.04 HK dollars.

ICBC, the largest commercial lender on the mainland, closed flat.

China Life shed 1.25 HK dollars, or 4.95 percent, at 24 HK dollars, while

Ping An lost 2.2 HK dollars, or 4.73 percent, to end at 44.3 HK dollars.

Most of the Hong Kong-based banks outperformed, with HSBC's local unit Hang

Seng Bank gaining 0.64 percent and Bank of East Asia, 0.82 percent.

The finance sub-index was 0.37 percent higher at 18,254.80, but the

utilities category even fared better to close at 35,142.44, up0.56 percent.

The properties sub-index was down 2.38 percent.

Cheung Kong, the business conglomerate headed by Hong Kong's richest man Li

Ka-shing, closed at 63.5 HK dollars, down 1.93 percent, while SHK Properties,

the leading residential developer in Hong Kong, slipped 1.08 percent.

The commerce and industry category lost 2.04 percent.

China Mobile, the telecommunications operator based on the mainland, lost

2.5 HK dollars, or 3.59 percent, to close at 67.1 HK dollars. Its competitor

China Unicom lost 4.82 percent to close at 7.7 HK dollars.

The oil shares were all lower, with PetroChina down 0.48 percent, Sinopec

down 0.48 percent and offshore oil producer CNOOC down 0.56 percent.

China Shenhua, the coal mining conglomerate, was down 0.37 percent.

HKEx, the sole exchange operator in Hong Kong, finished down 1.25 HK

dollars, or 1.88 percent, at 65.1 HK dollars. (7.8 HK dollars = 1 U.S. dollar)

Hong Kong stocks close 0.76% lower



HONG KONG, March 17 (Chinese media) -- Hong Kong stocks lost 98.62 points, or 0.76

percent, to close at 12,878.09 on Tuesday.

Turnover rose to 49.00 billion HK dollars (6.28 billion U.S. dollars)

from Monday's 46.7 billion HK dollars (5.99 billion U.S. dollars).

Tuesday, March 17, 2009

China's credit database grows by 40 mln people to become world's largest

BEIJING, March 16 (Chinese media) -- China's credit database

had records for 640 million people at the end of 2008, up 40 million from a year

earlier, Su Ning, vice governor of the People's Bank of China (PBOC, the central

bank) said Monday.

The database also covered 14.47 million companies, up about

1.4 million from a year earlier.

The PBOC established the database at the end of 2004

to help commercial banks reduce their loan risks. The database, according to the

PBOC, is the largest credit information pool in the world.

The database includes loan, credit card use,

insurance and bill payment information of individuals and companies.

Individuals can view their credit file by presenting

their ID cards at local PBOC branches or by phone.

Barclays in talks to sell iShares

BEIJING, March 17 (Chinese medianet) -- Barclays has been in

talks with several parties about selling iShares, its San Francisco-based asset

management unit, according tomedia reports from UKTuesday.



The UK's third largest bank also said it was talking

to the Treasury and the Financial Services Authority about taking part in the

Government's asset protection scheme (APS), in which country insures banks'

assets against future losses for a fee.

"Barclays businesses continue to perform well and

have had a strong start to 2009," the company stressed in an announcement to the

London Stock Exchange, attempting to cheer the investors.

Experts said the Barclays' exchange traded funds

business could net between 3 billion pounds (about 3.41 billion U.S.

dollars)and 5 billion pounds (about 5.41 billion dollars), which could

help it strengthen its position before the deadline of March 31 to apply for APS

and avoid joining the scheme for bank assets.

"Barclays' decision whether and to what extent to

participate in the scheme will be based on the economic merits to shareholders

of any such participation," the company added.

Sandy Chen, an analyst at Panmure Gordon Co.,

said the announcement reinforced concerns about Barclays. "The contemplated

disposal of iShares, the continued wrangling over the APS, and the disclosure of

significant credit derivatives-related payouts from troubled counterparties all

reinforce our view that Barclays' risk profile is high."

(Agencies)

Serbia, IMF start talks over loan arrangement up to 3 bln euros

BELGRADE, March 16 (Chinese media) -- The Serbian government on Monday started negotiations with the International Monetary Fund (IMF) over a new standby loan arrangement, which may be worth up to 3 billion euros (3.91 billion U.S. dollars).



Serbian Prime Minister Mirko Cvetkovic and the IMF delegation concluded at a meeting on Monday that mutual goal of the two sides is to ensure Serbia's macroeconomic stability for the next two years by signing a stand-by arrangement.

The new stand-by arrangement will replace the existing one made between Serbia and IMF out of precaution, the Serbian government said in a statement.

According to the statement, the Serbian government's platform for negotiations is based on the increasing budget deficit and the reduction of public spending.

Mladjan Dinkic, Serbian deputy prime minister and minister of economy and regional development, said on Monday that he expects a two-year arrangement to be reached with the IMF on the loan of approximately 3 billion euros (3.91 dollars).

"I expect an arrangement to be attained with the IMF on 2 billion euros loan for strengthening foreign currency reserves in 2009 and another billion for 2010," Dinkic said at a roundtable titled Serbia in 2009 - Recession, Growth or Stagnation.

"This will be more than enough money for Serbia to maintain the stability of its currency," Dinkic said, adding that he expects the negotiations to be over by the middle of next week.

The IMF delegation is headed by Chief of the IMF mission AlbertJagger and the Serbia delegation is lead by Governor of the Serbian central bank Radovan Jelasic, Dinkic and Minister of Finance Diana Dragutinovic.

Chinese shares rise 3.02 % on expectation of more economic stimulus plan

BEIJING, March 17 (Chinese media) -- Chinese equities rose 3.02 percent on Tuesday as investors expect more economic stimulus measures from the government.



The benchmark Shanghai Composite Index added 3.02 percent, or 65.04 points, to 2,218.33. The Shenzhen Component Index rose 4.58percent, or 367.18 points, to 8,389.87.

Gains outnumbered losses by 834 to 2 in Shanghai and 701 to 6 in Shenzhen.

Combined turnover was 170 billion yuan (24.89 billion U.S. dollars), representing a big surge from 93 billion yuan on the previous trading day.