First Business News

Chinese mainland to organize three buying teams to Taiwan by July

2009-06-30T14:12:00.000-07:00

BEIJING, May 20 (Xinhua) -- The Chinese mainland was
scheduled to organize three buying teams to visit Taiwan for business talks and
purchase of products and materials, Yao Jian, spokesman of the Ministry of
Commerce (MOC), said Wednesday.

The MOC, the State Council Taiwan Affairs Office and
the Ministry of Industry and Information Technology were endeavoring to organize
three economic and trade facilitation teams to visit Taiwan at the end of May,
in mid-June and early July to deepen the mainland-Taiwan economic and trade
ties, Yao said in a Web site statement.

Yao did not specify how many mainland businesses
would visit Taiwan and how much they planned to spend, but he said they would
mainly focus on purchasing folk handicraft, processed food, daily necessities,
machinery equipment and raw materials.

Li Shuilin, head of the Association of Economy and
Trade Across the Taiwan Straits, a non-governmental mainland institution, would
head the first team to visit Taiwan, with business people from home appliance,
light industry and food processing firms in the delegation. The delegation would
also carry out business talks in Taiwan, according to the statement.

Special Report:
Global Financial
Crisis

Chinese shares sink 0.94 pct on profit-taking

2009-06-30T14:11:00.001-07:00

BEIJING, May 20 (Xinhua) -- Chinese shares fell 0.94 percent Wednesday on profit-taking, erasing Tuesday's gains. The decline also followed an overnight drop on Wall Street.

The Shanghai Composite Index fell 0.94 percent, or 25.27 points, to 2,651.41.

The Shenzhen Component Index slid 0.53 percent, or 55.22 points, to 10,369.14.

Combined turnover contracted to 214.60 billion yuan (31.56 billion U.S. dollars) from 227.97 billion yuan on the previous trading day.

New energy firms gained for much of the day on talk that the government would unveil a support plan for the sector Thursday.

Donghua Energy, the Zhangjiagang-based liquefied oil storage company, rose 6.06 percent to 8.75 yuan. Shenzhen Topray Solar, a major solar consumer products manufacturer, gained 2.62 percent to 28.57 yuan.

However, new energy stocks were dragged down by profit-taking just 15 minutes before the markets closed, dealers said.

Airlines were broadly lower as the wholesale price of jet fuel rose 460 yuan to 4,450 yuan per ton as of Tuesday led by continuously rising crude oil prices.

Air China, the country's largest carrier, fell 1.38 percent to 6.41 yuan. China Southern Airlines retreated 2.38 percent to 5.34 yuan.

The State Council (cabinet) said Tuesday that the government would increase subsidies for consumers who replaced old models of vehicles and home appliances with new ones, as part of the effort to spur domestic spending and curb pollution.

Jinbei Vehicle Manufacturing, a major light truck maker, rose by the daily limit of 10 percent to 4.09 yuan. Dongfeng Motor climbed 3.70 percent to 5.05 yuan.

Suning Appliance, a giant consumer appliance retailer, edged up 0.07 percent to 15.16 yuan.

Despite the declines, the market still had the fundamental conditions for gains as the government continued to announce new measures to boost consumption, Chengdu-based Beising Investment said in a report to clients.

Special Report:
Global Financial
Crisis

Petrobras to borrow $10 bln from CDB, increase oil exports to China

2009-06-30T14:11:00.000-07:00

BEIJING, May 19 (Xinhua) -- Petrobras, the national oil company of Brazil, announced Tuesday that it has concluded negotiations with China Development Bank (CDB) for a bilateral loan of 10 billion U.S. dollars.

The money will be used to finance Petrobras' investment plan, which includes the procurement of goods and services from China, the company said.

The interest rate of the loan will be below 6.5 percent, said Sergio Gabrielli, CEO of Petrobras, at a press conference held here Tuesday.

Without releasing details, the two sides agreed to increase actual crude oil exports from Brazil to China.

A long-term export agreement was also signed Tuesday between Petrobras and UNIPEC ASIA, a wholly-owned subsidiary of China Petroleum and Chemical Corporation (Sinopec), Asia's largest refiner by output.

It provides that Petrobras export 150,000 barrels of oil per day to China starting from 2009 and 200,000 barrels of oil per day from 2010 to 2019.

The price of oil exported to China will be decided based on the market, said Gabrielli.

Apart from the agreement, Petrobras and Sinopec signed a memorandum of understanding (MOU) under which the two sides would cooperate in several areas such as exploration, refining, petrochemicals and the supply of related goods and services, said Petrobras.

Sinopec announced in February that it has signed a contract with Petrobras to import 3 million to 5 million tonnes of crude oil from the latter from February 2009 to January 2010 at market price.

Also in February, Sinopec and CDB signed an MOU with Petrobras regarding cooperation in the fields of oil and finance.

According to the memorandum, the annual trade volume between Sinopec and Petrobras will be raised from 3 million tonnes in 2008to between 10 million to 12.5 million tonnes before the end of 2010. Their future oil trading volume will reach 30 million tonnes.

China to increase subsidy for auto, home appliance replacements

2009-06-30T14:10:00.001-07:00

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willallocate 2 billion yuan to encourage home appliance
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consumers will get loans without collateral for buying durable
goods.

BEIJING, May 19 (Xinhua) -- China will increase
subsidies for consumers who sell their cars and home appliances in order to
purchase new ones, in an effort to spur domestic consumption and curb pollution,
according to a cabinet meeting held Tuesday.

The government will raise subsidies for auto
replacements from 1 billion yuan to 5 billion yuan this year, and allocate 2
billion Yuan to encourage home appliance upgrades, an executive meeting of the
State Council presided over by Premier Wen Jiabao said.

The move will further help stimulate domestic
spending after the rebate program for auto and home appliance buyers in the
rural areas greatly boosted rural consumption, said a statement from the
meeting.

Consumers who trade-in their used mid- and
small-sized truck and some types of mid-sized passenger cars for new ones will
receive a subsidy.

Subsidies will also be given to consumers who sell
automobiles that no longer meet the government's emission standard, but are
still within life expectancy.

The subsidy will be no more than the purchase tax of
the automobile.

A pilot program of home appliance replacement will
start in Beijing, Shanghai, Tianjin, Fuzhou, Changsha and provinces of Jiangsu,
Zhejiang, Shandong, Guangdong, said the statement. No specific date was given.

Buyers will receive a subsidy worth 10 percent of the
prices on five kinds of new appliances, namely, TV sets, refrigerators, washing
machines, air-conditioners and computers.

Retail sales kept solid growth in China as the
world's third largest economy turned to domestic consumption for growth after
exports tumbled.

Retail sales rose 14.8 percent in April year on year
to 934.32 billion yuan (136.8 billion U.S. dollars), the National Bureau of
Statistics (NBS) announced last Wednesday.

The growth rate was 0.1 percentage point higher than
in March.

From January to April, retail sales totaled 3.87
trillion Yuan, up 15 percent over the same period last year.

More than 1.15 million vehicles were sold last month
in China, up 25 percent year on year, according to China Association of
Automobile Manufacturers on May 8.

Sales were boosted by government stimulus policies,
Zhang Yunpeng, an analyst with Beijing-based Huarong securities told Xinhua last
Wednesday. China in January halved the purchase tax on passenger cars to 5
percent for models with engine displacements of less than 1.6 liters.

As part of the government effort to boost
consumption, China Banking Regulatory Commission (CBRC) said on May 12 that the
consumers will get loans without collateral for buying durable goods, including
appliances and electronic products, and other private consumption such as travel
and education.

China to create 3 mln jobs in light
industry

BEIJING, May 18 (Xinhua) -- The State Council, China's
Cabinet, Monday announced that it would endeavor to create 3 million new jobs in
light industry in the coming three years by boosting domestic demand.

The State Council in February unveiled initial plans to
boost light industry in a bid to buoy the economy together with the
4-trillion-yuan (586 billion U.S. dollars) stimulus package presented in
November and nine other specific industry stimulus plans including
petrochemicals, textiles and other sectors. Full story

China's oil processing capacity to
increase by 18% by 2011

BEIJING, May 18 (Xinhua) -- China plans to raise its
annual crude oil processing capacity to 405 million tonnes by 2011, the State
Council, or the Cabinet, said on Monday in its restructuring and stimulus plans
for the petrochemical industry.

That would represent an increase of about 18.4
percent over its processing volume last year, which topped 342.1 million tonnes,
according to the January figures from the National Bureau of Statistics.
Full story

China will meet economic growth target
of 8%: senior economic planner

HONG KONG, May 18 (Xinhua) -- China will definitely be
able to meet the target of achieving eight percent economic growth in 2009, a
senior official of the country's top economic planning body said here Monday.

"Judging from the indicators of the first four
months, I do believe it is highly possible to achieve an eight percent growth
for the full year. In fact, I believe the target will definitely be met," said
Xulin, head of the Department of Fiscal and Financial Affairs of the National
Development and Reform Commission. Full story

On bumpy road, Chinese exporters tap into home
market

GUANGZHOU, May 17 (Xinhua) -- At a sales booth in a
special trade fair here in southern China, Zhou was complaining how hard it was
to sell her products.

"We sell them at factory-gate prices, but buyers
still bargain. That makes me mad," said Zhou, a Taiwanese senior manager of Poly
Dragon Industrial, which is based in the booming city of Dongguan neighboring
Guangzhou, capital of China's manufacturing base Guangdong Province. Full story

China allows consumer financing
companies to boost consumption

BEIJING, May 13 (Xinhua) -- China will allow
non-deposit-taking institutions both home and overseas to offer consumer loans
to its citizens, a new measure to stimulate domestic consumption.

China Banking Regulatory Commission (CBRC) issued, on
its portal Web site Tuesday, management measures on the experiment of consumer
financing companies to seek public opinions. Full story

style="MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: left; mso-pagination: widow-orphan"
align=left>Special
Report: Global
Financial Crisis

Face cold realities of global hot money: researcher

2009-06-30T14:10:00.000-07:00

BEIJING, May 19 -- The 2008 China Financial Market Development Report,
issued by the People's Bank of China on May 4, pointed out that various stimulus
packages launched by respective countries would influence supply and demand
relation in international financial market. This may probably lead to a large
scale withdrawal of capital from emerging markets. "If the inflowing offshore
funds in China begin to outflow, it may probably result in a drastic adjustment
in the stock market and bond market of China," said the report.

The warning of the Chinese central bank is based on the financial crises as
it occurred in different countries as well as the appreciation of the US dollar
since the later half of 2008. The dollar value moving up resulted from the
flowback of large sums of money from international markets to the US after
subprime mortgage crisis.

After the financial tsunami broke out in the US in 2008, it is not only the
US financial institutions that brought back the capital invested overseas to
make up the shortage of liquidity but capital in the global market also sought a
safer place--the US market. Therefore, it is no surprise that foreign capital
withdrew from emerging markets considering that capital from other parts of the
world also flowed to the US.

Various recovery measures and economic stimulus packages, which are
announced by the affected countries with the aim of saving a depressed economy,
will also change the trend of capital flows in the international financial
market.

On May 5, State Administration of Foreign Exchange (SAFE) in China solicited opinion from all social sectors on the issue of administration of domestic foreign exchange accounts of foreign institutions. SAFE stated that these accounts of some foreign institutions tend to be a hotbed of illegal practices because of the absence of unified regulations. SAFE will reinforce the management of these accounts in domestic non-offshore banking sectors.

I believe that there are several key points here. First, SAFE will regulate
the opening and operation of foreign institutions' domestic foreign exchange
accounts, in order to keep track of cross-border capital flows. Second, it wants
to prevent these accounts from being used for money laundering. Third, it
intends to prevent the large-scale illegal flow of cross-border capital in these
accounts from adversely impacting China's financial market. Fourth, it wants to
avoid these accounts becoming the main channel for the escape of international
hot money.

In recent years, with the increasing opening up of China, more and more
foreign institutions have opened foreign exchange accounts in domestic banks.
The volume of business keeps increasing rapidly. According to incomplete
statistics, such accounts opened by foreign institutions within China exceeded
100,000 at the end of 2008.

A few years ago, when RMB was appreciating fast and domestic asset prices
increasing in leaps and bounds, a large number of foreign institutions
frequently opened accounts in domestic banks. This made a huge a mount of
international hot money rush into China. The total volume of international hot
money in China at that time was estimated to be $500-600 billion equivalent to 5
trillion yuan. After the financial crisis broke out, due to the reflux of the US
dollar and the depreciation of RMB, the net outflow of the balance of payments
accounts in China is estimated to be between $20 billion to $200 billion in the
fourth quarter of 2008.

The trend of RMB exchange rate and the development of Chinese economy in
the future will determine the direction of international hot money flow.
Considering the fact that China's economy will recover earlier than other
countries, if RMB exchange rate can be kept stable or even allowed to rise
slightly, there is little chance of a massive outflow of international hot money
from China, no matter how turbulent international financial markets are. If the
flow of international hot money can be limited to a controllable range, we don't
need to worry about it too much.

However, if China doesn't accelerate the pace of economic reform for
dealing with key problems, China's economy will face many difficulties when the
US and European economies revive after the crisis. By that time if the RMB is
depreciated because of a slowdown of China's economic growth rate, it is
possible that there would be huge amounts of international hot money outflow
from China.

China should tighten the administration of the cross-border flow of
capital. But it is unnecessary to strictly control the outflow of oversea
capitals. The key to this issue is whether China's economy can keep sustained
and steady growth.

The author is a researcher with the Institute of Finance and Banking under
the Chinese Academy of Social Science

(Source: China Daily)

China Enterprises Index up 1.93%

2009-06-30T14:09:00.001-07:00

HONG KONG, May 18 (Xinhua) -- Hang Seng China Enterprises Index on Hong
Kong Stock Exchange went up Monday with 184.95 points, or 1.93 percent, to close
the day's trading at 9,607.29.

The H-shares index, initiated in August 1994 and readjusted on Jan. 5,
2009, tracks the overall performance of 43 major Chinese mainland state-owned
enterprises listed on the Hong Kong Stock Exchange.

Hang Seng China H-Financials Index moved up 264.55 points, or 2.12 percent,
to close at 12,745.89.

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 51.23 points, or 1.63 percent,
to close at 3,194.10.

Introduced on Oct. 3, 2001 with the latest readjustment effective on March
9, 2009, Hang Seng Mainland Composite Index gauges the performance of 132 Hong
Kong-listed companies with principal places of business in Hong Kong and the
Chinese mainland.

Hang Seng China-Affiliated Corporations Index moved up 20.01 points, or
0.56 percent, to close at 3,567.48.

The index tracks the performance of 34 locally listed companies with a
significant equity interest held by entities in the Chinese mainland.

Special Report:
Global Financial
Crisis

Hong Kong stocks close 1.38% up

2009-06-30T14:09:00.000-07:00

HONG KONG, May 18 (Xinhua) -- Hong Kong stocks moved
up 232.21 points, or 1.38 percent to close at 17,022.91 on Monday.

Turnover climbed to 66.38 billion HK dollars (8.57
billion U.S. dollars), from Friday's 58.06 billion HK dollars (7.50 billion U.S.
dollars).

The index traded between 16,334.36
and 17,062.49.

The gain seen in the afternoon session was attributed
to strength in property companies and Mainland's stock market, according to
analysts who expected the blue-chip index to consolidate in the near term after
the market's recent strong rally, though some said ample liquidity should lend
the market support.

Property firms led Monday's gains on a positive
outlook for the sector. New World Development advanced 6.9 percent to 12.76 HK
dollars, Sino Land jumped 4.1 percent to 11.30 HK dollars, and Henderson Land
was up 3.5 percent at 38.50 HK dollars.

JPMorgan Monday raised the Hang Seng Index 2009
year-end target to 19,800 from 16,600, and recommended investors to buy more
property stocks.

However, Credit Suisse downgraded Hong Kong's
property sector on Monday to Underweight from Market Weight, because a recent
strong run up in property stocks has not been matched by fundamental
improvements.

The benchmark Shanghai Composite Index, which tracks
both A and B shares, ended up 0.3 percent at 2,652.78, rebounding from an early
fall to 2,589.61, led by gains in coal and power companies, which supported the
Hong Kong market.

Hong Kong's H-share index, which tracks the Hong
Kong-listed shares of Mainland-registered firms, rose 1.9 percent to 9,792.24.

Hong Kong bourse operator Hong Kong Exchanges and
Clearing rose 5.8 percent to 109.70 HK dollars on strong turnover.

Special Report:
Global Financial
Crisis

Chinese shares edge up after rebound by coal producers

2009-06-30T14:08:00.000-07:00

BEIJING, May 18 (Xinhua) -- Chinese shares reversed an early decline to closely slightly higher Monday, with a strong performance by coal stocks.

The benchmark Shanghai Composite Index edged up 0.28 percent, or 7.52 points, to 2,652.78. The Shenzhen Component Index rose 0.4 percent, or 40.82 points, to 10,314.04.

Combined turnover increased to 180.19 billion yuan (26.50 billion U.S. dollars) from Friday's 169.5 billion yuan.

Shares in Shanghai tumbled below the 2,600 mark in the morning, as financial and real estate stocks led the decline.

A strong rebound in coal stocks reversed the trend as investors took the view that rising oil prices might push up demand for coal, analysts said.

China Shenhua, the nation's biggest coal producer, rose 3.16 percent to 28.05 yuan. Datong Coal Industry gained 9.84 percent to 37.73 yuan.

China Yangtze Power rose 4.11 percent to 14.94 yuan after it announced a 107.5-billion-yuan-purchase of generation units at the Three Gorges Dam, its parent company and the world's largest hydropower project.

The State Council, or cabinet, announced a support plan Monday for the petrochemical industry. The cabinet urged oil producers and refiners to improve their product mix. It also vowed to improve the pricing mechanism for oil products and establish an oil product consumption tax that would be favorable for petrochemical companies.

It also pledged to build 20 oil refining bases, each with a capacity of 10 million tonnes.

However, the news came out after the market closed, too late to have an impact on Monday's trading.

PetroChina, the country's largest oil producer, fell 1.52 percent to 12.97 yuan. Sinopec, Asia's biggest refiner, fell 1.23 percent to 10.46 yuan.

Special Report:
Global Financial
Crisis

Chinese shares open slightly lower

2009-06-30T14:07:00.001-07:00

BEIJING, May 18 (Xinhua) -- Chinese shares opened slightly lower on Monday.

The benchmark Shanghai Composite Index dropped 0.48 percent to 2,632.57.
The Shenzhen Component Index was down 0.61 percent to 10,211.02 at the opening.

Special Report:
Global Financial
Crisis

'It's high time to develop futures trading in China', industry guild

2009-06-30T14:07:00.000-07:00

BEIJING, May 16 (Xinhua) -- China has laid a solid ground to step up the
development of the country's futures trading market, according to China Futures
Association (CFA) here on Saturday.

The country has narrowed the gap with international futures market as its
futures trading was less exposed to the impact of the global financial crisis,
the CFA vice director Li Qiang said at a forum on the development of futures
market.

China ranked second on international market in terms of commodity futures
trading. "The futures prices of products such as copper, corn, soybean and wheat
have seen a growing influence on the global price changes," Li said.

It was necessary for China to enhance futures trading development and use
the market as a tool for risk management at a time of global economic downturn,
according to Li, as futures prices often served as a barometer to indicate
international commodity price changes.

At present, the country has 20 products on futures trading. Two products
have been open for market trading since the year's beginning, including steel
and early rice, with the launch of swine futures in
expectation.

China Enterprises Index up 1.68%

2009-06-30T14:06:00.001-07:00

HONG KONG, May 15 (Xinhua) -- Hang Seng China Enterprises Index on Hong
Kong Stock Exchange went up Friday with 158.76 points, or 1.68 percent higher,
to close the day's trading at 9,607.29.

Hang Seng China H-Financials Index moved up 215.56 points, or 1.76 percent,
to close at 12,481.34.

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 45.61 points, or 1.47 percent,
to close at 3,142.87.

Hang Seng China-Affiliated Corporations Index moved up 13.82 points, or
0.39 percent, to close at 3,547.47.

The index tracks the performance of 34 locally listed companies with a
significant equity interest held by entities in the Chinese mainland.

Special
Report: Global Financial Crisis

Hong Kong stocks up 1.51% following Wall Street rally

2009-06-30T14:06:00.000-07:00

HONG KONG, May 15 (Xinhua) -- Hong Kong stocks advanced 249.01 points, or
1.51 percent to close at 16,790.7 on Friday.

Boosted by overnight rally on Wall Street, the benchmark Hang Seng Index
opened higher in the morning and fluctuated in the positive territory throughout
the trading.

The bounce of Hong Kong stocks was believed to have mitigated losses in
previous sessions this week, when share prices tumbled after robust gains in
seven consecutive days.

The day high was 16,953.41 and the day low stood at 16,736.18.

Turnover shriveled to 58.06 billion HK dollars (7.50 billion U.S. dollars),
from Thursday's 63.65 billion HK dollars (8.22 billion U.S. dollars).

Index heavyweight HSBC outperformed by rising 3.1 percent to 64. 3 HK
dollars and the sole market operator HKEx was up 1.7 percent to 103.7 HK
dollars.

Hong Kong-listed Chinese financial companies all registered increase in
share prices. The country's biggest lender ICBC surged3.6 percent to 4.65 HK
dollars; China Construction Bank (CCB), which has been under close scrutinize
among investors after the Bank of America sold large numbers of CCB shares, rose
1.9 percent to 4.79 HK dollars. Insurer Ping An advanced 1.6 percent to 49.35 HK
dollars and its arch rival China Life was up 0.9 percent to 27.55 HK dollars.

Oil-related stocks were all higher, with Sinopec up 1.0 percent to 8.09 HK
dollars, CNOOC up 2.0 percent to 9.98 HK dollars and ChinaPetrol up 1.7 percent
to 6.1 HK dollars.

Local property stocks grabbed a fair share of Friday's market rally. Cheung
Kong, the business conglomerate headed by Hong Kong's richest man Li Ka-shing,
closed 1.4 percent higher at 83.15 HK dollars, while SHK Properties, the leading
residential developer in Hong Kong, gained 1.3 percent to 81.6 HK dollars.

Despite price rise in most blue chips, market observers believe downward
pressure still hangs over the market, citing falling investment figures in the
Chinese mainland and sharp deterioration of GDP in the first quarter in Hong
Kong.

China's Ministry of Commerce announced Friday that the amount of direct
foreign direct investment into China fell 21 percent year on year in the first
four months, signaling that a recovery isn't yet firmly in place in the world
third largest economy.

The Hong Kong SAR government said it would downgrade annual growth
estimation for 2009 as exports and unemployment continue to worsen in the Asian
financial hub. (7.743 HK dollars = 1 U.S. dollar)

Special
Report: Global Financial Crisis

FDI decline "not cause for concern"

2009-06-30T14:05:00.001-07:00

China's foreign direct investment (FDI) growth in the
past one year. (Source: China Daily)
Photo
Gallery

BEIJING, May 15 -- The nation will remain one of the main recipients of
foreign direct investment (FDI) this year despite a sharp year-on-year decline
in April, analysts have said.

Last month's FDI was $5.89 billion, down 22.51 percent from a year earlier,
Dow Jones reported Thursday. The Ministry of Commerce refused to confirm the
report but experts said the figure would not be far off the mark.

Due largely to the global financial crisis, FDI has contracted for seventh
months in a row, and the decline in April is markedly sharper than March, when
it fell 9.5 percent.

Analysts said the April figure is not as bad as it appears if the high
reference point a year ago is taken into consideration.

Most analysts remain optimistic about the outlook for inward capital flows,
saying momentum will start to pick up later this year as the global economy
recovers.

"We were worried about overheating earlier last year," said Lu Jinyong, a
professor at University of International Business and Economics in Beijing. "But
the business environment has changed quite dramatically since. Year-on-year
comparisons do not make as much sense now."

In April 2008, actual FDI surged 70 percent from the same period the
previous year to total $7.6 billion. Much of it, some experts argue, was
so-called hot money trying to profit from the expected appreciation of the yuan
against the US dollar.

"Given the high base last year, China should neither feel too surprised nor
dejected by the recent FDI figures," said Dong Xian'an, macro-economic analyst
with Southwest Securities, a major domestic securities brokerage. "There is
other data showing that the economy is bottoming out. And that's the big
picture.

"The economy's contraction is likely to relax in the second half of the
year, and it is very likely that FDI inflows will recover and start to increase
at the turn of the year," Dong said.

Su Chang, a macroeconomic analyst with China Economic Business Monitor,
forecast that as the global situation becomes more stable, China's FDI
performance will improve in the next few months.

Lu estimated that China's FDI will be around $80 billion, not too drastic a
drop from last year's $92.4 billion.

Even with an expected FDI decrease, "China will be one of the few bright
spots in the world," Lu said.

According to a white paper on American business in China released last
month by the American Chamber of Commerce, 22 percent of American companies said
China was their No 1 global investment destination. Between 75 and 78 percent
ranked the country as one of their top three investment destinations every year
since 2004.

(Source: China Daily)

Special
Report: Global Financial Crisis

Chinese shares edges up 0.2% on Wall Street rally

2009-06-30T14:05:00.000-07:00

BEIJING, May 15 (Xinhua) -- Chinese shares rose 0.2 percent Friday, lifted by an overnight rebound on Wall Street, which recovered from a loss of more than 2 percent the previous trading day.

The benchmark Shanghai Composite Index added 5.38 points to close at 2,645.26. The Shenzhen Component Index climbed 0.21 percent, or 21.08 points, to 10,273.23.

Combined turnover shrank to 169.5 billion yuan (24.85 U.S. dollars) from 191.2 billion yuan Thursday.

Gainers outnumbered losers by 448 to 321 in Shanghai and 410 to235 in Shenzhen.

The three plans unveiled by the State Council, or the Cabinet, this week to support industry growth helped hold market confidence. The plans are aimed at stimulating development of machinery manufacturing, nonferrous metals and bio-industry.

Medical-related stocks continued to rise for a second day on a 62.8-billion-yuan central plan to support the development of bio-industry aimed at achieving breakthroughs in key technologies, such as transgenic products and new drug development.

Shares for southwestern Chongqing-based Holley Pharmaceuticals rose by the 10 percent daily limit to 5.45 yuan. Shenzhen Neptunus Bioengineering closed at 7.48 yuan, up 10 percent.

The market was also backed by the rise in some heavyweights. Shares for PetroChina, the country's largest oil producer, edged up 0.46 percent to 13.17 percent. China Coal Energy was up 2.32 percent to 11.91 yuan.

Special
Report: Global Financial Crisis

PBOC governor: Shanghai needs regulation change to be global financial center

2009-06-30T14:04:00.001-07:00

SHANGHAI, May 15 (Xinhua) -- Zhou Xiaochuan, governor of the People's Bank
of China (PBOC), Friday said China needs to modify market regulations to turn
Shanghai into a global financial center.

"(We) should make clear and improve from time to time our rules of the game when developing a
global financial center," Zhou told a financial forum in Shanghai.

He said the rules, including the legal system and those on accounting,
corporate governance and initial public offering, should be modified for global
acceptance.

China plans to make Shanghai a global financial center by 2020 that matches
the country's economic strength and the international status of its currency,
the State Council, or Cabinet, said on April 29.

To achieve the goal, the authorities should also improve infrastructure and
information environment and modify rules on tax, market access and talent
recruitment, Zhou said.

"The ratio could fall following government measures to boost domestic
demand, but it will continue to be high globally for a long period of time," he
said. "With the huge savings and the government encouragement for overseas
investment, we have all the conditions to speed up the development of various
investment funds."

He noted that the authorities will encourage the funds to take bigger risks
as they are more risk averse compared with their overseas counterparts.

Shanghai can draw experience from Hong Kong and work with the major
financial center in Asia to reach its target, Zhou told the second Lujiazui
Forum.

The official said Shanghai, like major brands in the country, needs to
stick to the principles of globalization in becoming a global financial center.

In 2006, China's voting power in the International Monetary Fund (IMF) was
raised to 3.66 percent from about two percent. The United States has 16.77
percent of the voting power, giving it the veto power.

"There should be more clear adjustment in the next round of cash injection
into the IMF before 2011," he said.

Many economists believed that China would be the first nation to recover
from the global downturn, allowing the fast growing economy to play bigger role
in the post-downturn world finance affairs.

Zhou said a bigger voice, however, comes with challenges. He said that
there is yet no consensus among experts and officials.

"But one thing, I believe, is clear," he said. "With the development of
China's economy and finance, we need an international financial center."

Wu Xiaoqiu, a professor of finance at the Renmin University of China, said
in late April that the global financial crisis brought to China more
opportunities than risks.

In the post-crisis period, Shanghai would join New York and London to be
the world's three major financial centers, Wu said.

Zhou said that to some experts, the international financial centers, like
New York and London, could be hard hit in the global financial crisis. But the
centers, he added, could be very helpful for economic growth, resources
optimization and financial innovation.

"So we should stick to the target," he said.

Special Report:
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China's central bank stresses credit boom should go to real economy

2009-06-30T14:04:00.000-07:00

BEIJING, May 15 (Xinhua) -- China's central bank has asked lenders to
ensure credit goes into the real economy, saying that risk control and credit
expansion were equally important.

"We can't rule out the possibility that some money has flowed into the
stock market, a situation that deserves close government monitoring," Guo
Tianyong, professor at the Central University of Finance and Economics, said
Friday.

He also said that at present, money velocity in China -- the rate at which
money in circulation was used to buy goods and services -- was slow. He said
this perhaps indicated that some of the money might not have gone into the real
economy, but had instead flowed from the banking system directly into the stock
market.

The request was posted in a notice on the People's Bank of China (PBOC)
website Thursday. The country's credit boom this year reflected the relatively
easy monetary policy and helped reduce deflationary expectations and boost
confidence to ensure stable economic growth, according to a joint meeting of the
PBOC and the China Banking Regulatory Commission held Wednesday.

The meeting also stressed banks should better scrutinize risk and ensure
that money flowed into the real economy to meet the capital demand of industrial
restructuring. Banks should continue to improve credit structure and capital
adequacy.

Chinese banks lent 5.17 trillion yuan (760.29 billion U.S. dollars) in the
first four months of the year, exceeding the 5 trillion yuan full-year target
set early this year.

Liu Yuhui, an economist with the Chinese Academy of Social Sciences, told
Xinhua Monday that new bank loans could reach about9 trillion yuan this year.

The PBOC said in its quarterly monetary report on May 6 that China's
economy had done "better than expected" in the first quarter and pledged to
maintain "ample" liquidity in the financial system to ensure economic recovery.

Special Report:
Global Financial Crisis

Nasdaq OMX to help businesses from China's Tianjin to go public abroad

2009-06-30T14:03:00.001-07:00

TIANJIN, May 14 (Xinhua) -- The U.S.-based Nasdaq OMX Group Thursday signed a memorandum of understanding with the government of Tianjin, the largest coastal city in northern China, on cooperation to help local Chinese businesses to go public abroad.

Under the accord, the American group will provide financing and information services -- in market research, corporate management and investment analysis in particular -- for listed companies from Tianjin.

Nasdaq pays great attention to the Chinese market, which promises wide development prospects, according to Robert H. McCooey, Jr., who is in charge of newly listed companies and capital market with the American group.

He said now there were 97 Chinese firms listed on Nasdaq. Among108 companies listed on the bourse last year, 22 came from China. China boasts the second largest number of Nasdaq-listed companies next only to the United States, he said.

As the world's largest stock exchange, Nasdaq OMX Group, with more than 3,800 companies listed, provides trading and related technical services for companies around the globe. It has set up representative offices in Beijing and Hong Kong.

Special Report: Global Financial Crisis

Hong Kong stocks close 3.04% lower

2009-06-30T14:03:00.000-07:00

People walk past an index board
displayed in Hong Kong, China, May 14, 2009. Hong Kong stocks retreated
3.04 percent, or 517.93 points to close at 16,541.69 on
Thursday.(Xinhua/Wong Pun Keung)
Photo
Gallery

HONG KONG, May 14 (Xinhua) -- Hong Kong stocks retreated 3.04 percent, or 517.93 points to close at 16,541.69 on Thursday, tracking U.S. market falls overnight prompted by declining retail sales.

The benchmark Hang Seng Index opened 2.52 percent lower in the morning and soon dived as much as 3 percent, led by falls of heavyweights including the HSBC and China Mobile.

The index touched the day high of 16,630.33 before shedding more points to the day low of 16,422.28.

Turnover was 63.65 billion HK dollars (8.22 billion U.S. dollars).

The Hong Kong market tumble came after U.S. stocks plunged overnight over a weak-than-expected retail sale released by the U.S. Commerce Department.

Analysts said the 0.4-percent drop in retail sales in April in the world largest economy, which indicated that a recovery may not be "just around the corner," further dented market confidence.

Among the 42 constituents of the Hang Seng Index, only two stocks registered growth. Tencent, China's leading instant message service provider, rose 9.8 percent to 79.9 HK dollars after it reported a 94-percent rise in first quarter profit. Tencent touched the record of 82 HK dollars earlier during Thursday's trading.

Another gainer is China Unicom, up 0.23 percent to 8.85 HK dollars.

HSBC contributed to market tumble by decreasing 4.2 percent to 62.35 HK dollars and ChinaMobile lost 4.2 percent to 73.15 HK dollars after resuming trading. The sole market operator HKEx plunged 7.1 percent to 102 HK dollars as more financial institutions turned downbeat about its earning prospects.

Profit-taking in oil-related stocks pushed the sector lower, with Sinopec down 4.6 percent to 8.01 HK dollars, PetrolChina down4.2 percent to 6 HK dollars and CNOOC shedding 4.3 percent to 9.78HK dollars.

Shares of Hong Kong-listed Chinese banks suffered loss of different degrees. China Construction Bank fell 1.9 percent to 4.7HK dollars, ICBC down 2.4 percent to 4.49 HK dollars and the Bank of China down 2.1 percent to 2.85 HK dollars. (7.742 HK dollars is equivalent to 1 U.S. dollar)

Special Report:
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Chinese shares down 0.9% on fall of surrounding markets

2009-06-30T14:02:00.000-07:00

Investors chat at a securities exchange
in Shanghai, China, May 14, 2009. China's benchmark Shanghai Composite
Index on the Shanghai Stock Exchange closed at 2,639.89 points Thursday,
down 23.88 points, or 0.9 percent, from the previous close. (Xinhua/Pei
Xin)
Photo
Gallery

BEIJING, May 14 (Xinhua) -- Chinese shares dipped 0.9 percent Thursday, following a global market downfall triggered by unfavorable economic data in the United States.

The benchmark Shanghai Composite Index lost 23.88 points to close at 2,639.89. The Shenzhen Component Index edged down 0.41 percent, or 42.22 points, to 10,252.15.

Wall Street dropped sharply in early trading Wednesday after retail sales unexpectedly decreased in April for a second month.

Weak blue chips pulled down the market. PetroChina declined 1.35 percent to 13.11 yuan (1.93 U.S. dollars), and Sinopec lost 2.21 percent to 10.6 yuan.

Financial shares led the fall. China Merchants Bank slid 2.93 percent to 17.23 yuan, and China Ping An declined 2.75 percent to 40.37 yuan.

As China's government released a plan Wednesday to stimulate bio-industry, medical-related stocks bucked trend, with Zhangzhou Tian-Mu-Shan Pharmaceutical Enterprise Co. and Guilin Layn Natural Ingredients Corp. rising by the daily limit of 10 percent to 8.56 yuan and 24.08 yuan respectively.

According to the plan, China will support 11 national research programs with at least 62.8 billion yuan in 18 months to achieve breakthroughs in key technology development that included transgenic products, new drug development, and the treatment of major infectious diseases such as HIV/AIDS and viral hepatitis.

The information technology sector gained 1.34 percent, as the programs also included an advanced new-generation broadband wireless mobile communications network, and high-end central processing units and software.

Combined turnover shrank to 191.2 billion yuan (28.11 U.S. dollars) from 222.89 billion yuan (32.63 billion U.S. dollars) Tuesday.

Losers outnumbered gainers by 443 to 409 in Shanghai. Gainers outnumbered losers by 367 to 365 in Shenzhen.

An investor sits at a securities
exchange in Shanghai, China, May 14, 2009. China's benchmark Shanghai
Composite Index on the Shanghai Stock Exchange closed at 2,639.89 points
Thursday, down 23.88 points, or 0.9 percent, from the previous close.
(Xinhua/Pei Xin)
Photo Gallery

Special Report:
Global Financial Crisis

HKEx Q1 profit down 49%

2009-06-30T14:01:00.001-07:00

HONG KONG, May 13 (Xinhua) -- Hong Kong Exchanges and Clearing saw a 49
percent year-on-year drop in the profit attributable to shareholders in the
first quarter of this year, to 834.2 million HK dollars (107.75 million U.S.
dollars), the only stock market operator in Hong Kong announced on Wednesday.

According to first quarter results, HKEx recorded income of 1.34 billion HK
dollars (173.08 million U.S. dollars), down 41 percent on a year earlier, while
operating expenses fell 7 percent to 354.4 million HK dollars (45.78 million
U.S. dollars). The profit attributable to shareholders was 834.2 million HK
dollars, with basic earnings per share at 78 cents.

The average daily turnover value on the Stock Exchange was 44.7 billion HK
dollars, 55 percent lower than the same period last year. The average daily
number of derivatives contracts traded on the Futures Exchange and stock options
contracts traded on the Stock Exchange also dropped 5 percent and 27 percent to
195,499 and 194,279.

HKEx Chairman Ronald Arculli said the persistence of negative market
sentiment had a significant impact on both the primary and secondary markets in
the first quarter.

The plunge in global consumption was magnified by worsening unemployment
and tighter credit conditions which caused aggressive business retrenchment in
most economies.

"Despite the difficulties ahead, HKEx continues to work hard to ensure it
operates a quality market built on a solid financial infrastructure with sound
products and services to bolster confidence in our marketplace."

Special Report:
Global Financial Crisis

China Enterprises Index up 0.17%

2009-06-30T14:01:00.000-07:00

HONG KONG, May 13 (Xinhua) -- Hang Seng China Enterprises Index on Hong
Kong Stock Exchange edged up 16.40 points on Wednesday, or0.17 percent higher,
to close the day's trading at 9,738.62.

The H-shares index, initiated in August 1994 and readjusted on Jan. 5 this
year, tracks the overall performance of 43 major Chinese mainland state-owned
enterprises listed on the Hong Kong Stock Exchange.

Hang Seng China H-Financials Index moved down 96.57 points, or 0.76
percent, to close at 12,619.46.

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 3.56 points, or 0.11 percent,
to close at 3,159.78.

Introduced on Oct. 3, 2001 with the latest readjustment effective on March
9 this year. Hang Seng Mainland Composite Index gauges the performance of 132
Hong Kong-listed companies with principal places of business in Hong Kong and
the Chinese mainland.

Hang Seng China-Affiliated Corporations Index moved down 1.91 points, or
0.05 percent, to close at 3,619.97.

The index tracks the performance of 34 locally-listed companies with a
significant equity interest held by entities in the Chinese mainland.

Special
Report: Global Financial Crisis

China to issue 13.1 bln yuan local bonds, 28.6 bln yuan book-entry T-bonds

2009-06-30T14:00:00.002-07:00

BEIJING, May 13 (Xinhua) -- China's Ministry of
Finance (MOF) said Wednesday it would issue 13.1 billion yuan (1.92 billion U.S.
dollars) of three-year local government bonds from May 14 to 18 on behalf of
three provinces at a fixed annual coupon rate of 1.71 percent.

The plan allocates 3.1 billion yuan for Hubei
Province, 9 billion yuan for Sichuan Province and 1 billion yuan for Dalian city
in Liaoning Province.

The three local bonds will begin trading on May 20.

The ministry would also issue a batch of book-entry T-bonds
of 28.6 billion yuan, the eighth of its kind this year.

The one-year, short-term bonds have a fixed annual
coupon interest of 0.89 percent, with the selling period lasting from May14 to
18. Trading begins on May 20.

Plans moving forward to enable foreign firms to list in Shanghai

2009-06-30T14:00:00.001-07:00

BEIJING, May 13-- China is advancing its study of plans to allow
foreign companies to list on the Shanghai Stock Exchange and may work out
preliminary arrangements as early as this year, industry sources said yesterday.

The country is expected to step up communications with other nations in the
coming months on the development of an international board in the city after
concluding a deal with Britain on Monday for further stock-market reform, the
sources said.

"China agrees to allow qualified foreign companies, including United
Kingdom companies, to list on its stock exchange through issuing shares or
depository receipts in accordance with relevant prudential regulations," the two
countries said in a joint statement issued on Monday.

The agreement, reached by Chinese Vice Premier Wang Qishan and British
Finance Minister Alistair Darling following a meeting in London, is set to pave
the way for large British companies like HSBC to sell shares in Shanghai.

HSBC said in a statement yesterday that it "would like to be the first
foreign bank to list in Shanghai if the authorities allow," and is working
toward that goal. It did not give a specific timetable for a stock sale in the
city.

Peter Wong, executive director of HSBC subsidiary Hongkong Shanghai
Banking Corp, said earlier this month that a Shanghai listing would consolidate
HSBC's brand influence and raise funds for expansion in the Chinese mainland
market.

Two years ago, China started to consider permitting foreign companies to
issue yuan shares to help boost the status of its fledgling stock market on the
mainland. But the program has proceeded slowly as regulators worked to ease
investor jitters over a stock glut.

Program revived

The project entered the spotlight again after China's State Council issued
a guideline in late March allowing Shanghai to prepare for allowing overseas
companies to sell yuan-denominated shares and bonds on the city's bourse.

Other companies including Hong Kong-based Hang Seng Bank and the Bank of
East Asia have also publicly expressed an interest in listing shares in
Shanghai.

"Apparently, the program was revived," said a Beijing-based brokerage
executive close to the China Securities Regulatory Commission. "Preparatory work
will be paced up, with the initial arrangement likely to be settled by year
end."

Industry insiders said any public stock sale by an overseas company would
not be likely to occur until at least late next year as there's a great deal of
work to be done.

One key obstacle for foreign companies is that they will have difficulty
switching the proceeds of their mainland listings into other currencies and
repatriating the money as the yuan is not fully convertible.

Hu Xiaolian, head of China's foreign exchange regulator, indicated in
London on Monday that the country won't likely move quickly to free up the yuan
under the capital account.

(Source: Shanghai Daily)

Chinese shares gain 1.74% on retail sales, gov't stimulus

2009-06-30T14:00:00.000-07:00

BEIJING, May 13 (Xinhua) -- Chinese shares rose 1.74 percent Wednesday as investor confidence was boosted by April retail salesfigures, which analysts said indicated that government stimulus efforts were having a positive impact.

The benchmark Shanghai Composite Index rose 1.74 percent, or 45.59 points, to close at 2,663.77. The Shenzhen Component Index edged up 1.13 percent, or 115.22 points, to 10,294.37.

Gains outnumbered losses by 514 to 315 in Shanghai and 475 to 242 in Shenzhen.

Combined turnover climbed to 222.89 billion yuan (32.63 billion U.S. dollars) from 176.3 billion yuan on Tuesday.

Retail sales rose 14.8 percent in April year on year to 934.32 billion yuan, the National Bureau of Statistics (NBS) announced Wednesday.

The growth rate was 0.1 percentage point higher than in March.

Government stimulus policies, such as cuts in purchase taxes for small cars and subsidies for farmers to buy agricultural equipment, had played a big part in retail sales, said Yuan Gangming, an economic researcher at Tsinghua University in Beijing.

The April figures, including retail sales and fixed-asset investment, which were released Tuesday, had shown clearer signs of economic recovery and boosted investor confidence, said Yang Bo, analyst with Guotai Junan Securities.

PetroChina, one of the country's major state-owned oil producers, helped lift the market as the company announced a plan late Tuesday to raise 100 billion yuan through debt financing in 2009 to support its major strategic projects.

Its shares rose 6.07 percent, or 0.76 yuan, to 13.29 yuan, and led the oil and coal sector up by 2.67 percent.

Jinniu Energy Resources went up 8.38 percent to 35.42 yuan, and Pingdingshan Tianan Coal Mining climbed 7.36 percent to 31.67 yuan.

Industry support plans for the machinery and nonferrous metal sectors, released earlier in the week, were also helping maintain market growth, the analysts said.

Nonferrous metal stocks rose 2.19 percent, while Xiamen Tungsten rose by the daily limit of 10 percent to 16.27 yuan.

The machinery sector grew by 1.36 percent. Hailu Heavy Industry jumped by the daily limit of 10 percent to 26.5 yuan, and Hongcheng General Machinery gained 9.99 percent to 8.04 yuan.

Special
Report: Global Financial Crisis

Vietnam to host int'l engineering exhibition

2009-06-30T13:59:00.000-07:00

HANOI, June 24 (Xinhua) -- The 6th International Precision Engineering, Machine Tools and Metalworking Exhibition and Conference 2009 (MTA VIETNAM) will take place in Vietnam from July 8 to 11, the local newspaper Vietnam Investment Review reported Wednesday.

The event, scheduled to take place in Saigon Exhibition and Convention Center of Ho Chi Minh City of Vietnam, will draw over 400 exhibiting companies from 25 countries and regions, said the exhibition's official website.

The exhibition is a chance for companies to seek the latest technology and application know-how in the world of machines and tools, said the website.

The exhibition has grown to become Vietnam's most comprehensive manufacturing solutions trade event since it was first launched in Ho Chi Minh City in 2005, said the website.

Unemployment to reach 10% in 2010 in OECD countries

2009-06-30T13:58:00.001-07:00

PARIS, June 23 (Xinhua) -- The rate of unemployment in the industrial world could reach 10 percent in 2010, the highest level since 1970s, Organization for Economic Cooperation and Development (OECD) warned on Tuesday.

Prime Minister of the Republic of Korea (ROK) Han Seung-soo addresses the opening ceremony of the Organization for Economic Cooperation and Development (OECD) Forum 2009 in Paris, capital of France, on June 23, 2009. (Xinhua/Zhang Yuwei)
Photo Gallery

The Paris based organization estimated that 57 million people could lose their job in its 30 member countries by the end of 2010, while it was 37.2 million jobless at the end of 2008.

"Unemployment will continue to weigh on national economies for a long time to come," OECD Secretary General Angel Guria said in a statement. "Previous downturns have taught us that the jobs recovery will lag a long way behind the pickup in the economic growth."

The OECD said it was working closely with its member countries "to adapt their policies to help the unemployed and avoid high unemployment levels becoming persistent."

The organization suggested governments to ensure financial safety nets for low income families and the unemployed. It also urged countries to make greater efforts to provide training opportunities to the unemployed.

In April, the OECD expected the rate of unemployment came to 7.8 percent.

Special Report: Global Financial Crisis

Shell confirm attack on pipeline in SE Nigeria

2009-06-30T13:58:00.000-07:00

LAGOS, June 18 (Xinhua) -- The Royal Dutch Shell Thursday said its Trans Ramos Pipeline at Aghoro-2 community in southeast oil-rich Nigeria's Bayelsa State was attacked Wednesday night.

"SPDC Joint Venture can confirm the Trans Ramos Pipeline at Aghoro-2 community in Bayelsa State was attacked last night (June 17)," Tony Okonedo, manager corporate media relations with Shell Nigeria Exploration Production Company Limited said in a statement reaching here.

"Some oil production has been shut in to avoid potential environmental impact," he added. According to him, relevant government agencies have been informed, and a joint investigation visit is planned.

Nigeria's major militant group in the oil-rich Niger Delta region the Movement for the Emancipation of the Niger Delta (MEND) said Wednesday its fighter destroyed a major crude oil pipeline in southeast in Bayelsa state belonging to Royal Dutch Shell as it continues its campaign against foreign oil companies.

Nigerian militants claim destroying major Shell pipeline

LAGOS, June 18 (Xinhua) -- Nigeria's major militant group in the oil rich Niger Delta region the Movement for the Emancipation of the Niger Delta (MEND) said its fighter destroyed a major crude oil pipeline in southeast in Bayelsa state belonging to Royal Dutch Shell as it continues its campaign against foreign oil companies.

"At about 20:30 Hrs (2030 GMT) of Wednesday, June 17, 2009, fighters from MEND in furtherance of Hurricane Piper Alpha (our campaign to cripple the entire oil and gas export of the Federal Republic of Nigeria), destroyed with high explosives a major crude oil trunk line in Bayelsa state belonging to Shell," the group spokesman Jomo Gbomo said in a statement reaching here. Full story

G8 ministers commit to more efficient aid strategy for developing countries

2009-06-30T13:57:00.001-07:00

by Silvia Marchetti

ROME, June 12 (Xinhua) -- The Group of Eight (G8) development ministers agreed Friday on a series of commitments to increase efficiency in financial aid allocation to developing countries, particularly Africa, in an attempt to tackle the impact of the current economic downturn.

Closing a two-day meeting, the ministers said in a final document they shared the view that "innovative financing is a critical element in contributing, along with traditional ODA (official development aid), to raising the resources needed to tackle the challenge of the economic crisis so as to mitigate its impact on development.

"In this difficult context, a change of scale and speed in the implementation of innovative financing mechanisms for development is most needed," said the statement.

However, no concrete financial commitment to developing countries was made. The ministers simply reiterated what had previously been decided at London's G20 meeting in April and at Gleneagles summit in 2005 to reverse the negative economic impact and increase sustainable development in emerging countries.

According to the final statement, the development ministers stressed the need for "a strong, coherent and coordinated response to the economic crisis."

"The global economic slowdown, adding on the negative effects of energy and food crises, has severely disrupted economic growth worldwide", especially in developing countries, said the ministers.

"We must therefore act in a coordinated manner to prevent the economic crisis from turning into a deeper social crisis with all its possible consequences in terms of political instability and conflicts," they added.

Thus, the ministers agreed to increase "social protection mechanisms and safety nets to address vulnerable population groups who are hardest hit by the crisis" through a more efficient development strategy.

Over the two-day meeting on Thursday and Friday, discussion was focused on the impact of the economic crisis on developing countries and on measures to support low income economies to meet their challenges.

As developing countries have been hard hit by the global economic crisis, industrialized nations' efforts will focus on promoting foreign investments and international loans to increase sustainable development.

Among the commitments taken at the meeting, the G8 ministers stressed the need to "optimize the allocation of resources and maximize the impact of development assistance, investment, trade, debt relief, microfinance, small and medium enterprise financing."

In addition, it is essential to free financial flows from bureaucratic nets, promote public-private partnerships, stimulate the implementation of green technologies to combat climate change and advance in reform programs able to boost market forces and increase well-being in developing countries.

The ministers decided as well on the necessity to give emerging countries better representation at institutional organizations such as the International Monetary Fund and the World Bank.

"We have confirmed these commitments, they will be kept by the countries and the international organizations concerned," Italian Foreign Minister

Franco Frattini told reporters at the closing press conference.

"But that is not enough. We have to go beyond that and mobilize all available resources against the crisis in order to bring a response to the difficulties which developing countries are facing. A lot remains to be done, particularly for the weakest and most indebted countries," he added.

Discussion on Africa was at the center of the gathering. The ministers stressed the need to mobilize private capital to finance development of the continent's infrastructure and proposed to reduce by half the commission on remittances of immigrant workers.

Such a measure alone, proposed by current G8 presidency holder Italy, will free some 12 billion U.S. dollars to 15 billion U.S. dollars.

Frattini stressed the importance of Africa's role and the need of a "global partnership" with all developing countries.

Italy has put the issue of Africa on top of G8 agenda and Frattini promised that "Africa's voice will be heard" at L'Aquila summit in July.

The ministers also agreed that it was essential for donor countries to have greater effectiveness and more coordination.

Thus they decided to advance a cross-sector approach to sustainable development, based on the harmonization of cooperation initiatives in the various areas of development such as education, environment, health, food security and safety. The final goal is to optimize available resources and to increase potential economies' scale.

The meeting's final results will be presented to the G8 summit to be hosted by the Italian city of L'Aquila, which was partly destroyed by an earthquake on April 6.

The meeting was also attended by ministers from Brazil, China, India, Mexico, South Africa and Egypt, as well as deputies from the African Union and the New Partnership for Africa's Development.

Representatives from the UN Food and Agriculture Organization, the World Food Program, the World Health Organization and the World Bank also took part in the meeting.

The G8 development meeting opened amid strong protests. On Thursday, the anti-poverty group One led by Irish rock star "Bono" accused Italy and France of being so far behind on their aid pledges to Africa.

G8 development ministers agree on aid for developing nations

2009-06-30T13:57:00.000-07:00

ROME, June 12 (Xinhua) -- Development ministers from the Group of Eight (G8) agreed Friday on a series of commitments to increase efficiency in financial aid allocation to developing countries, particularly Africa, in an attempt to tackle the impact of the economic crisis.

No concrete financial commitment to developing countries was made. The ministers simply reiterated what had previously been decided at London's G20 meeting in April and at Gleneagles summit in 2005 to reverse the negative economic impact and increase sustainable development in emerging countries.

According to the final communique, the development ministers stressed the need for "a strong, coherent and coordinated response to the economic crisis. The global economic slowdown, adding on the negative effects of energy and food crises, has severely disrupted economic growth worldwide," especially in developing countries.

At the two-day meeting, the ministers agreed to increase "social protection mechanisms and safety nets to address vulnerable population groups who are hardest hit by the crisis" through a more efficient development strategy.

The meeting was attended by ministers from Italy, the current G8 presidency holder, Canada, Britain, France, Germany, Japan, Russia and the United States, as well as ministers from developing countries, namely China, India, Brazil, South Africa, Mexico and Egypt, and representatives from international organizations.

Special Report: Global Financial Crisis

IIF: Private capital flow to emerging markets to drop hugely

2009-06-30T13:56:00.001-07:00

By Wu Ye, Qu Shaohui

BEIJING, June 12 (Xinhuanet) -- Dramatic decline in
net private capital flows to emerging markets will be seen in 2009, according
tothe Institute of International Finance (IIF).

Ina report released Thursday at the Spring
Membership Meeting,the IIF predicted that the volume of private capital
flows to emerging markets this year will likely be 141 billion U.S. dollars,
which is less than one-half of the 2008 total of 392 billion dollars and far
below the record of 888 billion dollars seen in 2007.

Regional divergences are also highlighted in the IIF
report. Most significantly, projections of flows to "Emerging Asia" and Latin
America have been revised upwards while revising down the estimates of net flows
to "Emerging Europe."

In Asia, the net private capital flows to emerging
markets is projected 88 billion dollars this year ascompared to59
billionin 2008 and record 296 billionin 2007. Aggregate net
repayment of private sector capital by "Emerging Europe," of 33 billion dollars,
is now foreseen in 2009, after net inflows of 214 billion dollars in 2008.

Nevertheless, a modest revival of flows is now
starting to become evident and the IIF projects that the 2010 volume of private
capital flows to emerging markets will reach 373 billion dollars.

The IIF said that following a period of extreme
weakness between October 2008 and March 2009, flows to emerging markets appear
to have improved somewhat over the last two months, albeit to levels far below
the early months of 2008.

William Rhodes, First Vice Chairman of the IIF's
Board of Directors, Chairman and President, Citibank and Senior Vice Chairman,
Citi, stressedthat moderate recovery in capital flows inemerging
markets partly reflects a rise in investor confidence both in response to
measures taken bygovernments in emerging markets, including China, to
stimulate their economies and to the international support that emerging markets
are now starting to receive.

In the report, IIF projected that net private capital
inflows to China, which moderated from a peak of 153 billion dollars in 2007 to
88 billion dollars in 2008, are set to stabilize at around 60 billion dollars
this year and next year.

Rhodes also noted, "The International Monetary Fund
must deploy its expanded resources with skill to assist its member countries to
achieve economic recovery. And, it is also important that every effort be made
to increase the resources available to the World Bank Group, including the
International Finance Corporation, and to the regional development banks,
including the Asian Development Bank. These institutions have major roles to
play at this time."

Special Report:
Global Financial
Crisis

Development opportunities, hot topic at WEF on Africa

2009-06-30T13:56:00.000-07:00

Marilou Jane (L2), sector director of the Africa Finance and Private Sector Development of World Bank, talks about the Africa Competitiveness Report 2009 in Cape Town, South Africa, June 10, 2009. The Africa Competitiveness Report 2009 released on Wednesday highlighted that financial development and trade were crucial to making Africa more competitive and riding out current crisis. (Xinhua/Xu Suhui)
Photo Gallery

By Song Ying and Li Jianmin

CAPE TOWN, South Africa, June 10 (Xinhua) -- Co-chairs of the World Economic Forum (WEF) on Africa stressed on Wednesday the development opportunities of the continent on the opening plenary of the platform.

The meeting came as the global economic meltdown has sucked the growth strength of many African nations, making flagging the traditional economic drivers like foreign investment, demand for raw material and oversea remittance.

A journalist reads the Africa Competitiveness Report 2009 in Cape Town, South Africa, June 10, 2009. The Africa Competitiveness Report 2009 released on Wednesday highlighted that financial development and trade were crucial to making Africa more competitive and riding out current crisis. (Xinhua/Xu Suhui)
Photo Gallery

At the plenary under the theme "Africa and the New Global Economy", the five co-chairs believed that African countries should use the crisis which has devastating effects on the world's major economies, as an opportunity to bring about new development in the continent.

Newly-elected South African President Jacob Zuma, also the host of the forum, said the continuation of the current crisis will mean increased starvation, poverty and child mortality."

However, he expressed belief that Africa can have its own way to deal with the crisis just like other parts of the world.

"We view the economic downturn as providing both challenges and opportunities for the continent and the developing world in general," said Zuma.

World Bank Managing Director Ngozi Okonjo-Iweala said the impacts of the crisis on Africa are not abstract.

She argued that the key issue is how to focus on the opportunity brought by the crisis to position Africa for long-term development.

Okonjo-Iweala also stressed the importance of having the voice of African countries on the table.

Jiang Jianqing, chairman of the board of the Industrial and Commercial Bank of China, told the participants at the opening plenary that the global crisis poses a challenge to African economy as the price of raw material, outside demand and foreign investment all drop.

"Africa will have more opportunities in the long run as the global economy will be in a more balanced pattern after the crisis. The relations between development and fairness will be better," said Jiang.

Another co-chair, Soud Ba'alawy, executive chairman of Dubai Group of the United Arab Emirates, said that there is a misconception that the investment to Africa will have high risks. People will begin to wonder which one has greater risk after the crisis started in the West.

The World Economic Forum on Africa has attracted over 800 participants from 50 countries. Five African leaders have taken part in the meetings. They are Kenyan Prime Minister Raila Amolo Odinga, Lesotho's Prime Minister Pakalitha Mosislili, Rwandan President Paul Kagame, South African President Zuma and Zambian President Rupiah Bwezani Banda.

Participants of the forum will try to seek practical solutions to foster better business practices and greater investment across the continent.

The closing plenary session of the platform scheduled for Friday afternoon will highlight the outcomes of the meeting and map out the future engagement of main stakeholders.

World business leaders meet on Africa strategy against crisis

2009-06-30T13:55:00.001-07:00

by Song Ying and Li Jianmin

CAPE TOWN, June 10 (Xinhua) -- The 19th World Economic Forum on Africa started on Wednesday in the coastal city of Cape Town, South Africa, under the theme of "Implications of the Global Economic Crisis for Africa".

The meeting comes as the global economic meltdown has mounted pressure on major economies in Africa, sucking the strength of traditional economic drivers like foreign investment, demand for raw material and oversea remittance.

Jiang Jianqing, co-chair of the World Economic Forum on Africa and chairman of the board of the Industrial and Commercial Bank of China, said at the press conference that the Davos meetings of the World Economic Forum he attended have inspired him a lot.

"It was my first time to take part in the Africa meeting of the forum, " Jiang said, "I desire to learn the opinions and suggestions of all sides on how to cope with the challenges brought by the global crisis."

Jiang and Liu Guijin, special representative of African affairs of the Chinese Foreign Ministry, would attend parts of the sessions of the forum.

Prior to the meeting, Head of Africa of the World Economic Forum Katherine Tweedie highlighted the urgency of exploring how macroeconomic shifts are shaping the global agenda and how these trends are affecting Africa's diverse economies.

"Most importantly, the meeting will facilitate interaction and dialogue that will allow our key leaders to address the immediate challenges posed by the crisis and fully explore the unique opportunities that Africa has at its doorstep in this new global arena," Tweedie said.

The talks attract over 800 participants from 50 countries. Five African leaders have confirmed their attendance, including Kenyan Prime Minister Raila Amolo Odinga, Lesotho's Prime Minister Pakalitha Mosislili, Rwandan President Paul Kagame, newly-elected South African President Jacob Zuma and his Zambian counterpart Rupiah Bwezani Banda.

Participants of the forum will try to seek practical solutions to foster better business practices and greater investment across the continent.

The first event of the meeting would be a highly interactive session to engage over 350 leaders in a brainstorming exercise. Leaders will examine the changing global landscape and determine the major challenges for which African countries need to be most prepared in the coming year.

The discussions will be based on five general themes in the fields of politics, business and economics, namely, Global Shifts; Regional Effects; Drivers of the Economy; Change Leadership; Collaboration across Borders; and Growth through Innovation.

Among high-profile topics to be discussed are Macroeconomic Shifts in the Global Agenda, Economic Crisis and Impact on Africa.

Economic deliberations will be closely linked to important social and environmental issues including food security, climate change, health care and education.

The 2010 FIFA World Cup in South Africa also draws the attention of business leaders in the world. They will try to explore the economic and social impacts of the international football event in the forum.

The closing plenary session of the platform scheduled for Friday afternoon will highlight the outcomes of the meeting and map out the future engagement of main stakeholders.

The Africa meeting followed the international talks in Jordan sponsored by the World Economic Forum to map out the Middle East response to the world economic crisis.

Special Report:
Global Financial
Crisis

IMF says Africa needs $2.5 bln bailout from economic meltdown

2009-06-30T13:55:00.000-07:00

LAGOS, June 9 (Xinhua) --The International Monetary Fund (IMF) has predicted that the next year may witness dramatic increase in credit borrowings by African countries to the tune of 2.5 billion U.S. dollars as a result of biting effects of global economic meltdown, the Lagos based This Day newspaper reported Tuesday.

The IMF Country Chief and Resident Representative to Nigeria, David Nellor, made the disclosure while on a courtesy visit to the Minister of Labor and Productivity, Adetokunbo Kayode, in Abuja on Monday.

He singled out Nigeria as one country that has so far escaped from the immediate impact of the world financial crisis due to the accrued benefits from the fiscal reforms.

Nellor particularly pointed to the oil savings from excess crude oil account as well as the banking reforms as major contributory factors in the measure of financial stability being enjoyed by Nigeria.

"The crisis is clearly a big issue globally and each country has its own challenges and for several countries in Africa, they need finance," he said.

"If they don't have that finance, it means they will grow more slowly, so we anticipate this year a lot of borrowing will take place at concessional interest rates," he added.

He said the interest rate on IMF money borrowing to some countries is half percent.

"That is a concessional rate and we anticipate an increase this year of maybe 2 billion dollars or 2.5 billion dollars of additional borrowing from Africa to help countries tied all over during this crisis period," Nellor added.

Earlier in his welcome address, the Nigerian labor minister said Nigeria' s economic problem is not caused by the global economic crisis, but is principally based on the fact that there are inherent structural problems within the country's economy.

Kayode said what Nigeria requires from IMF at the moment is very strong beneficial support.

According to him, the World Bank did a report on the last 10 years of economic activities in Nigeria and the conclusion is that even though Nigeria has an across-the-board economic growth of between 7 and 8 percent, there is no commensurate growth in the number of the employment created.

He said his ministry had taken up the issue of rising unemployment rates and had adopted a number of policy measures aimed at redressing the situation.

"I believe IMF and all other international partners must assist us to see how we can tackle the issue of unemployment," he added.

Special Report: Global Financial Crisis

Iran opens largest Mideast gas injection project

2009-06-30T13:54:00.000-07:00

TEHRAN, June 8 (Xinhua) -- The largest gas injection project in Mideast was inaugurated on Monday in Iran's southwestern province of Khuzestan, the official IRNA news agency reported.

The inauguration ceremony, attended by Iranian Oil Minister Gholam-Hossein Nozaria and other Oil Ministry officials, was held in the Aghajari oilfield, situated some 125 km away from Khuzestan's capital city of Ahvaz, said the report.

The project aims at "injecting two billion cubic feet of natural gas per day in order to increase the production of Iran's crude oil by 130,000 barrels a day," which, according to Nozari, "would be one of the best ways to maximize the use of oil reserves."

According to Oil and Gas Journal, as of January 2009, Iran has an estimated proven oil reserves of 136.2 billion barrels, or roughly 10 percent of the world's total proven petroleum.

Iran is OPEC's second-largest exporter after Saudi Arabia, and the fourth-largest exporter of crude oil worldwide after Saudi Arabia, Russia and Norway.

IATA: World Airline industry faces risks and challenges

2009-06-30T13:53:00.002-07:00

KUALA LUMPUR, June 8 (Xinhua) -- Fuel bill, efficiency, cash reserves,
capacity management, and partnerships were the risks and challenges of the
present airline industry, according to the International Air Transport
Association (IATA) on Monday.

The industry fuel bill for 2009 would account for 23 percent of its
operating costs with an average price of oil at 56 U.S. dollars per barrel
(Brent), the association said as its 65th Annual General Meeting officially
kicked off here.

While, the fuel bill for 2008 was 165 billion dollars or 31 percent of
operating costs at an average of 99 dollars per barrel.

"Greedy speculation of oil prices must not hold the global economy hostage.
Failure to act by governments would be irresponsible," said IATA's Director
General Giovanni Bisignani.

He predicted that the industry's fuel bill decline by 59 billion dollars to
106 billion dollars this year.

Bisignani also said the industry gained efficiency over the last decade.
Its labor productivity improved by 71 percent, fuel efficiency increased by 20
percent and load factors rose by 7 percent.

"The dramatic downturn in demand could push the non-fuel unit costs higher,
which cannot be cut in proportion," said Bisignani.

Bisignani further noted that the third challenge was cash reserves.

Global airlines were in a better cash position than when the industry was
facing the challenges of September 11, he said.

Cash reserves of 70 billion dollars or 13 percent of revenues were stronger
than the 9 percent reserves that airlines had in year 2000.

"But our pocket are not that deep. A long L-shaped recovery could drain the
industry of cash," said Bisignani.

Also, Bisignani noted that airlines should be careful in capacity
management since global load factors for the first quarter of 2009 were down
about 3 percent compared to 2008.

"This is less than the falls experienced in some recent crises as a result
of airlines better matching capacity to falling demand," said Bisignani.

He said that the 4,000 aircraft expected to enter commercial aviation fleet
in the next three years would make the capacity management as an ongoing
challenge.

Bisignani also noted that limitations on ownership continued to hinder
broader partnership across borders among airlines.

Special Report:
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Crisis

Airline industry targets carbon-free growth by 2020

2009-06-30T13:53:00.001-07:00

KUALA LUMPUR, June 8 (Xinhua) -- The International Air Transport Association (IATA) announced on Monday that the world airline industry is committed to achieving carbon-free growth by 2020.

This was a major step forward by committing to a global gap on the industry's emissions in 2020, said Giovanni Bisignani, IATA's Director General as the 65th IATA Annual General Meeting and World Air Transport Summit formally opened here.

The airline industry was the first global industry to make such a bold commitment, Bisignani said.

There are three sequential goals to complete carbon-zero growth, including a 1.5 percent average annual improvement in fuel efficiency from 2009 to 2020, according to the IATA.

The goals also included efforts for a 50 percent absolute reduction in carbon emission by 2050.

All air transport industry players were united in their proactive approach to environment, with a cross industry four-pillar strategy on climate change, Bisignani said.

The strategy, which focused on improved technology, effective operation, efficient infrastructure and positive economic measures, was delivering results, he said.

In 2009, the carbon footprint of air transport was expected to shrink 7 percent -- 2 percent from IATA's four pillar strategy and5 percent due to the recession, said Basignani.

Basignani noted that the commitment needed to be matched by governments.

"ICAO (International Civil Aviation Organization) must set binding carbon emission standards on manufacturers for new aircraft," said Basignani, adding that a legal and fiscal framework to support the availability of sustainable biofuels must be established.

Basignani also said that governments must work with air navigation service providers to push forward major infrastructure projects to achieve the airlines' commitment on environment.

Global airline loss forecast doubles to 9 bln U.S. dollars

2009-06-30T13:53:00.000-07:00

KUALA LUMPUR, June 8 (Xinhua) -- The International Air Transport Association (IATA) revised its global airline financial forecast for 2009 on Monday, nearly doubling the global loss to 9 billion U.S. dollars.

The increased loss prediction reflected "a rapidly deteriorating revenue environment", the IATA said as its 65th Annual General Meeting officially opened here.

In March this year, the IATA forecast the loss for 2009 at 4.7 billion U.S. dollars

The association also revised its loss estimate for 2008, raising the figure to 10.4 billion U.S. dollars from the previous estimate of 8.5 billion U.S. dollars.

The aviation industry has faced the most difficult situation due to the current economic meltdown, said Giovanni Bisignni, IATA's Director General and Chief Executive Officer (CEO), describing it as "unprecedented".

"The ground has shifted. Our industry has been shaken," he said, noting the recession was the most significant factor impacting the industry's bottom line.

The IATA also revised its revenues forecast for 2009 to 448 billion U.S. dollars, an unprecedented decline of 15 percent from 2008.

On air cargo, the IATA forecast global airlines would carry 33.3 million tonnes of freight, a decline of 17 percent from 2008.

Passenger demand is expected to contract to 2.06 billion travelers, down 8 percent compared with 2008, according to the association.

The global airline revenues from cargo transport are expected to drop 11 percent, while the revenues for passenger transport are expected to decrease by 7 percent, it said.

Special Report: Global Financial Crisis

African largest trading bloc COMESA launches customs union

2009-06-30T13:52:00.000-07:00

VICTORIA FALLS, Zimbabwe, June 7 (Xinhua) -- Africa's largest trading bloc
COMESA officially announced the launch of its customs union on Sunday in the
Zimbabwean resort town of Victoria Falls, another key milestone for the bloc's
economic integration.

Backgrounder: Basic facts about COMESA

Backgrounder: Brief introduction about COMESA authority and chief

Backgrounder: Brief introduction about Zimbabwe

African largest trading bloc COMESA kicks off summit in Zimbabwe

2009-06-30T13:51:00.001-07:00

by Li Nuer, Song Ying and Tichaona Chifamba

VICTORIA FALLS, Zimbabwe, June 7 (Xinhua) -- The 13th summit of Africa's largest trading group COMESA started in the Zimbabwean resort town of Victoria Falls on Sunday, with the long-anticipated official launch of a regional customs union topping the agenda.

It will be the second crucial step taken by the Common Market for Eastern and Southern Africa (COMESA) in its process of economic integration after the 19-member bloc established the first free trading area in Africa in 2000

The important move had been confirmed again by COMESA secretary general Sindiso Ngwenya before the summit. The COMESA chief announced that the customs union will be launched next Monday when the summit came to an end.

"The Common Tariff Nomenclature and the Common Customs Documentation (CCD) are in place and what remains is the COMESA Regional Policy still under negotiation," he had said.

At the opening ceremony of the summit, outgoing chairman of COMESA Authority, Kenyan President Mwai Kibaki gave a report on progress made since the last summit in Nairobi in 2007, including the movement towards harmonization of policies between COMESA and the other economic blocs of the Southern African Development Community and the East African Community towards an African Economic Community.

He said he was encouraged by the fact that intra-COMESA trade had 52 billion U.S. dollars in 2008, up from three billion dollars the previous year.

"As we collectively position ourselves to ushering the next milestone on our regional agenda, let us also remain fully aware of the broader agenda on the integration of the African continent. It is necessary that we focus on the bigger picture by strengthening our relations with other regional blocs," Kibaki said.

Ugandan President Yoweri Museveni thanked the Zimbabwean political leadership and people for coming up with an inclusive government and averting a potentially serious conflict. He also said COMESA should push for first world status and look at how it can take advantage of the current global economic crisis.

"We need to find how best we can survive and even how best we can take advantage of it," he said.

Vice Chairman of African Union Commission Erastus Mwencha decried the fact that although Africa was represented at the last G20 summit, it was still to remove a stimulus package as pledged there.

He stressed the need for Africa to consolidate its strategies with climate change, whose effects he said could affect the lives of its citizens.

The customs union aims to lift tariffs among member states while harmonizing barriers with third parties through the Common External Tariff, which the community's heads of state and government adopted in May 2007.

With the theme of "Consolidating Regional Integration through Value Addition, Trade and Food Security", the summit followed a meeting of the Council of Ministers from Tuesday to Thursday and talks of COMESA foreign ministers on Friday and Saturday.

The summit, which had originally been set for last year, has been postponed twice. The COMESA made a put-off decision first to allow the host country Zimbabwe to complete its electoral process which finally gave birth to the formation of an all inclusive government.

The meeting was later postponed again as organizers took into account the need to begin the process of implementing the decisions of the summit of three trading blocs held in Uganda last year regarding the harmonization of Free Trade Areas and common external tariffs.

COMESA, headquartered in the Zambian capital of Lusaka, was formed in 1994 to replace its forerunner, the Preferential Trade Area. It enjoys an aggregate population of about 400 million and combined GDP of over 360 billion U.S. dollars.

Backgrounder: Basic facts about
COMESA

Backgrounder: Brief introduction about
COMESA authority and chief

Backgrounder: Brief introduction about
Zimbabwe

PIF secretary general: Global financial crisis "could affect Pacific stability"

2009-06-30T13:51:00.000-07:00

SUVA, June 5 (Xinhua) -- The economic impacts of the global economy on the
Pacific may also be a driver for insecurity, and in some cases a catalyst for
criminality, posing a threat to the stability and security of the Pacific
region.

Secretary General of the Pacific Islands Forum, Tuiloma Neroni Slade, made
the warning Thursday at the opening of the annual Forum Regional Security
Committee meeting at the Forum Secretariat in Suva.

Slade said the region has become a target of new organized crime group
entities attempting to exploit vulnerabilities in banking and financial sectors
and also the illicit movement of drugs, weapons and people.

He added that the Pacific region continues to face complex law enforcement
challenges and support to agencies responsible for law enforcement remains a
high priority for all the countries in the region.

"It is clear from the variety of investigations undertaken in the last year
that the region continues to be targeted by individuals and groups attempting to
undertake a range of transnational criminal activity. These include the illicit
movement of drugs, weapons and people. We are even beginning to witness
incidences of new organized crime groups entities attempting to exploit
vulnerabilities in our banking and financial sectors," the Fijilive website
quoted Slade as saying.

The Forum members heard that the area of border security will be tested
with the lack of response to commercial fraud.

The region has been urged to make a move toward traditional law enforcement
and compliance priorities.

"No one country can feasibly manage alone in today's world, where the
problems of one neighbor invariably affect the next. Peace and security in our
region are inextricably linked to peace and stability in our respective member
countries; and much depends on the mutuality of needed cooperation on issues of
common concerns."

The two-day FRSC meeting was attended by representatives of Forum member
countries as well as regional law enforcement and security stakeholders.

Fiji was not invited to the meeting after being suspended from the Forum
last month for failing to meet the island body's demand to issue a 2009 general
election date by May 1.

Special Report:
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Crisis

ILO conference to tackle global job crisis

2009-06-30T13:50:00.001-07:00

The graphics shows unemployment in the 16-nation
eurozone rose to 9.2 percent of the workforce in April, the highest level
in this decade as the recession hit consumers and industry, according to
official EU data on June 2, 2009. (Xinhua/Zhang Liyun)
Photo Gallery

GENEVA, June 3 (Xinhua) -- The International Labor
Organization (ILO) opened its annual conference on Wednesday with discussions
focused on ways and means to tackle the growing impact of the economic and
financial crisis on employment and social protection.

Between 3,000 and 4,000 representatives from most of
the ILO's 183 members are participating in the meeting, including more than 150
ministerial officials, said Kari Tapiola, spokesperson of this year's
conference.

The 17-day conference will feature on June 15-17 an
ILO Summit on the Global Jobs Crisis, which will be addressed by at least 10
heads of state or government, including Brazilian President Lula da Silva and
French President Nicolas Sarkozy.

The agenda of the conference has been reorganized at
short notice in order to focus on the global jobs crisis, according to an ILO
statement.

Job losses have been massive in all regions, and
future forecasts predict continued job losses and high and persistent
unemployment and poverty well into 2010, the statement said.

The conference will discuss a range of measures and
policies to promote employment and enterprise development, and extend social and
other protection to persons affected.

Other issues to be discussed include HIV/AIDS, gender
equality in work places, forced labor, the situation of workers in the occupied
Palestinian territories.

The role of the annual conference is to adopt and
oversee compliance with international labor standards, establish the budget of
the organization and elect members of the ILO governing body.

Since 1919, the conference has served as a major
international forum for debate on social and labor questions of worldwide
importance.

Special Report:
Global Financial
Crisis

4th Conference of Islamic Banks and Financial Institutions kicks off in Damascus

2009-06-30T13:50:00.000-07:00

DAMASCUS, June 1 (Xinhua) -- The 4th Conference of Islamic Banks and
Financial Institutions kicked off Monday in Syrian capital Damascus under the
theme "Islamic Banking Investment Opportunities and Competition Challenges."

The two-day conference is expected to address challenges facing the Islamic
financial industry in light of the recent global financial crisis which is
considered a good opportunity to give a push for the Islamic banking system.

The conference will also tackle the issues of liquidity management,
financing companies and individuals, solidarity, insurance, products standards,
regulations on e-banking operations, features of the Syrian Islamic banking
market, according to a statement published in the official website of Al Salam
for International Conferences and Exhibitions.

800 participants from 20 Arab and non-Arab countries, including presidents
of central, Islamic, investment and commercial banks along with businessmen and
investors, attend the conference.

Governor of the Central Bank of Syria Adeeb Miyalah said during the opening
session of the conference that efforts are on foot to establish a fair banking
system that is based on the Islamic Sharia.

Iraq's Kurdistan starts oil exports

2009-06-30T13:49:00.001-07:00

BAGHDAD, June 1 (Xinhua) -- Iraq's autonomous region of Kurdistan started
Monday its first oil exports through the country's northern national pipelines.

In a ceremony attended by Iraq's President Jalal Talabani and president of
the Kurdish Regional Government (KRG) Massud Barzani, the workers at Taq Taq oil
field in Arbil province turned on the pumps announcing the beginning of first
oil exports from the Kurdish region.

The Kurdish region is exporting the oil via Iraqi pipelines that convey the
Iraqi oil from the northern oilfields of Kirkuk to the Turkish Mediterranean
port of Ceyhan.

"It is a historic day. We are proud of this success, and this achievement
will serve the interests of all Iraqis, particularly the Kurds," Barzani said in
the ceremony.

Iraq's KRG has a large degree of self-rule and has a profound disagreement
with Iraq's central government in Baghdad over oil production deals signed by
the KRG.

However, Iraq has approved that the KRG to export crude oil through its
national pipelines to be marketed by Iraq's State Oil Marketing Organization
(SOMO) and the revenue will be deposited to the federal Iraq account.

Earlier, the KRG said that around 60,000 barrels per day (bpd) will be
exported from the Tawke Field in Duhuk province, and that some 40,000 bpd will
be conveyed by tankers from Taq Taq oil field in Arbil province to the northern
national pipelines.

Khalid Salih, a KRG spokesman, said Monday that his regional government
hopes that it would produce 250,000 bpd by mid-2010 and up to 1 million bpd
within the next two or three years.

SCO, BRIC summits to focus on global financial crisis: Russian analysts

2009-06-30T13:49:00.000-07:00

MOSCOW, May 28 (Xinhua) -- The summits of the Shanghai Cooperation
Organization (SCO) and the BRIC countries (Brazil, Russia, India and China)
scheduled for next month in Russia will provide the participants with a platform
to discuss measures to tackle the global financial crisis, Russian analysts said
on Wednesday.

The SCO member states should further enhance coordination in working out
policies and measures amid the global economic downturn, Mihail Delyagin,
director of the Russian Institute for Globalization Problems, told Xinhua.

Russia, among other countries, proposed the creation of new international
reserve currencies during the G20 summit in London in early April, Delyagin
said.

The sides could discuss the proposal within a bilateral or multilateral
framework at the upcoming summit, which will also be conducive to preparation
for the next G20 summit, said the expert.

Discussion about the merits and flaws of the measures adopted to deal with
the financial crisis should be given priority at the BRIC summit, said Igor
Nikolayev, director of FBK Strategic Analysis Department.

The BRIC countries have many topics to talk about against the trend towards
world multipolarizaiton, Nikolayev said.

Special Report:
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Crisis

International diamond watchdog due in Zimbabwe

2009-06-30T13:48:00.001-07:00

HARARE, May 27 (Xinhua) -- A team from the Kimberley Process, an international diamond trade watchdog, is due in Zimbabwe shortly to audit operations of the local industry, officials said on Wednesday.

Zimbabwe's diamond industry has come under international spotlight in recent years, in particular over suspected illegal mining and smuggling of the precious gems at Chiadzwa in Marange, according to local media New Ziana.

There were also suspicions and allegations that security forces deployed in Marange to secure the diamond deposits had killed scores of illegal panners, heightening calls for an international probing into the local industry.

Government critics joined the fray, and tried to prod the Kimberley Process to order a ban on Zimbabwe diamond trade. Officials said it was against this background that the team from the Kimberley Process, drawn from countries such as Canada, Namibia, South Africa and the United States, was visiting Zimbabwe.

But earlier claims of diamond smuggling at River Ranch Mine inBeitbridge were dismissed by another Kimberley Process team in 2007.

The new team, which is expected in Zimbabwe either later this week or next week, was expected to visit all the country's three diamond mines - River Ranch, Murowa and Chiadzwa to inspect their operations.

"We are ready for them. This will put all the speculation to rest," an official, who declined to be named on account of the sensitivity of the issue, was quoted as saying.

Zimbabwean diamond industry has in recent years become a major component of the local mining sector, with experts predicting thatthe precious mineral and platinum will become the top foreign currency earners for the country in the near future.

The Chiadzwa deposits, for example, are the largest concentrated reserves in the world. The reserves remain largely unexploited, and the area around Chiadzwa is still to be fully explored to ascertain the extent of the deposits.

Industry sources said more diamond deposits have been found elsewhere in the country, sparking intense jostling for mining rights among local and international players.

BHP boss cautiously optimistic on China economy

2009-06-30T13:48:00.000-07:00

CANBERRA, May 27 (Xinhua) -- The head of Australian minerals giant BHP
Billiton is cautiously optimistic that China's economic situation will improve
in the months ahead, but warned global economic recovery will be slow and
protracted.

Chief executive Marius Kloppers told a minerals conference in Canberra on
Wednesday it would be another six months before there were clear signs of the
true situation for the company's markets in China and the Organization for
Economic Cooperation and Development (OECD).

Kloppers said there were a few reasons for optimism in China, including
early signs about growth, loan activity and in the construction and real estate
sectors.

"If all of these trends continue in the second quarter they will give us
some reason to be cautiously optimistic," he said.

Kloppers stressed the need for caution because there were still issues
around Chinese exports, adding the company did not expect in the medium term a
sharp return to overall economic activity.

"We probably believe as a company the economic recovery will be both slow
and protracted," he said. "The best we can say in the medium term is that
conditions remain uncertain."

In the U.S., there was still a downside risk with unemployment remaining a
problem. The economies of Europe, especially the U.K. and Germany, were still a
worry, and Japan was weak.

Special Report:
Global Financial
Crisis

Oil prices rise, but unlikely to spike again

2009-06-30T13:47:00.001-07:00

BEIJING, May 23 (Xinhua) -- Crude oil prices are
likely to continue rising, but there will be no major spike in the market in the
coming months as world oil consumption still remains weak, analysts said.

Global crude prices, which plummeted from 147.27 U.S.
dollars per barrel to below 40 dollars last year, have witnessed a moderate yet
steady rebound over the past months, reaching 61.5 dollars on Thursday at the
New York oil market, marking a three-month high.

The reason for the recent rally is that the U.S.
government reported a surprise decline in crude and gasoline inventories as the
driving season approaches, Wall Street Strategies' senior research analyst,
Conley Turner, said.

"The rally in oil is also supported by the fact that
there is a sense of growing optimism among market participants that the economy
is not getting worse and is in fact, turning a corner," Turner said.

However, analysts also warned that the current oil
price levels were not in line with the underlying weak global economic
conditions. They said that runaway crude oil prices were therefore unlikely to
be seen in the coming months.

"If you have a look at the fundamentals in the market
at the moment, the inventories in the U.S. are still at 19-year highs and
there's no real indication that demand has re-entered the market yet," Ben
Westmore, an energy analyst at the National Australia Bank, said.

The International Energy Agency (IEA) said on Friday
that global oil demand would hit a 28-year low this year because optimism about
an economic recovery was not reviving the appetite for energy.

The rebound in oil prices is largely connected with
the performances of the financial markets, instead of the balance of supply and
demand, the Paris-based organization said, adding that the world's oil demand
has shown no signs of recovery with the absence of fundamentals to back the oil
market.

Xie Guozhong, an independent economist in China, also
believes that the recent price rebound cannot be explained by analyzing the
balance of supply and demand, as financial markets play a major role in pushing
up prices.

The large scale stimulus packages launched by some
developed economies boosted capital flow into the international oil market
raising prices, Xie, a former Morgan Stanley chief economist for the
Asia-Pacific region, said.

Judging by the current global economic situation,
analysts said oil prices may occasionally rise above 63 U.S. dollars per barrel,
but it was unlikely to see any major price hikes this year. They said for the
most part oil prices would fluctuate between 50 and 60 dollars.

According to a short-term outlook released last week
by the Energy Information Administration of the U.S. Energy Department, prices
are expected to average about 55 dollars per barrel for the rest of 2009, and 58
dollars per barrel in 2010.

EAC increases budget for 2009/2010 fiscal year

2009-06-30T13:47:00.000-07:00

DAR ES SALAAM, May 23 (Xinhua) -- The East African Community (EAC) has
increased its annual budget by 34 percent for the 2009/2010 fiscal year with a
total budgeted amount of 54.25 million U.S. dollars.

Of the budgeted total, 50.6 percent is meant for development expenditure
while the rest is meant for recurrent and emolument expenditures, according to
Monique Makaruliza, secretary of the EAC Council of Ministers.

The secretary also unveiled that 51.5 percent of the budget would be
contributed by the five EAC member states of Burundi, Kenya, Rwanda, Tanzania
and Uganda while the rest would be contributed by development partners.

The 2009/2010 budget will focus on such issues as consolidating the
community's customs union, finalizing the negotiations of the community's
envisaged common market protocol and promoting intra-community trade and
investment.

The five countries combine to cover 1.9 million square kilometers, to have
120 million people and to enjoy a gross domestic product of 47 billion U.S.
dollars.

Though budgeted with 23.41 million dollars for the 2008/2009 fiscal year,
the regional integration bloc of five countries is expected to spend to the tune
of 40.49 million dollars for that budgeted period.

Kenya, Rwanda, Tanzania and Uganda are each budgeted to contribute 5.6
million dollars toward the community's 2008/2009 budget while Burundi is
budgeted to contribute 1 million dollars.

Israeli economy in recession: official data

2009-06-30T13:46:00.000-07:00

JERUSALEM, May 17 (Xinhua) -- Israel's Central Bureau of Statistics (CBS) announced Sunday that the country is officially in a recession.

According to CBS's data, Israel's gross domestic product fell by 3.6 percent in the first quarter of 2009, following a 0.5 percent drop in the last three months of 2008. The formal definition of a recession is two consecutive months of negative economic growth.

Israeli business sector revenue fell at an annual rate of 4.2 percent in the first quarter of 2009, following a 1.6 percent drop in the last quarter of 2008 and a 1-percent rise in the third quarter of 2008, the data showed.

Imports of goods and services dropped 21.8 percent in the first quarter of 2009, while exports decreased by 14.4 percent, the date said.

Per capita expenditure was down 6 percent in the first three months of 2009 and investment in the Israeli economy decreased by 7.8 percent during the same period, according to the data.

Despite the recession, apartment prices in the Jewish country rose by 4.9 percent in the first quarter of 2009 as the positive trend in the real estate market continued.

Israeli cabinet approves 2009-2010 budget

2009-06-30T13:45:00.000-07:00

JERUSALEM, May 13 (Xinhua) -- The Israeli cabinet Wednesday voted to pass
the 2009-2010 budget, local daily The Jerusalem Post reported.

Despite opposition from Shas party, a key coalition partner, Israeli
cabinet approved the budget, with 26 cabinet ministers voting for the bill while
the four Shas ministers against it, said the report.

Following the cabinet approval, the budget will now have to be approved by
Israel's Knesset (parliament).

The vote came hours after marathon late-night negotiations produced an
agreement for an across-the-board cut of 5 percent to all government ministry
budgets, and a raising of value-added-tax by 1 percent.

As part of the deal, the defense budget is expected to be cut by 1.5
billion shekels (about 365 million U.S. dollars). Israeli Defense Minister Ehud
Barak, as well as officials in his ministry, had opposed any such cuts.

Meanwhile, local daily Ha'aretz reported that value-added-tax will also be
applied to fruits and vegetables for the first time in Israel's history, which
is expected to add 1.8 billion shekels to the government coffers over the next
two years. (1 U.S. dollar equals 4.1 Israeli shekels)

Special Report:
Global Financial Crisis

OPEC oil prices drop below $40 again

2009-05-11T13:48:00.000-07:00

Special Report:Global Financial Crisis

VIENNA, Feb. 23 (Xinhua) -- The weekly average prices of the Organization
of Petroleum Exporting Countries (OPEC) dropped to 39.45 U.S. dollars per barrel
(dpb) last week, the second below 40dpb dive since the second week of this year,
said the Vienna-based cartel Monday.

The weekly average prices of OPEC have hovered slightly above 40 dpb since
the second week of this year, even seeing a slight rebound for three consecutive
weeks this month.

However, further concerns about the world economy due to the bankruptcy
crisis of the United States auto giants last week have imposed great pressure on
international crude oil market. In addition, the continuing strengthened dollars
have also further pressure on the prices.

According to market analysts, the worldwide weak demand and the surplus oil
supply are still the main factors affecting the international crudes market in
the near future, which will further keep prices low.

OPEC will hold a Ministerial Conference on March 15 focusing on the
supply-demand relationship on the current international oil market so as to
decide whether to slash output further.

Chinese official: No misuse of stimulus funds

2009-05-11T13:47:00.001-07:00

Special Report:Global Financial Crisis

BEIJING, Feb. 19 (Xinhua) -- An official of China's
National Audit Office (CNAO) said Thursday that the agency had not found any
serious misuse of economic stimulus funds, but he vowed to step up supervision
to ensure economic and social stability.

"I am gratified to tell you that the government
policies have been implemented well across the local departments, and swift
measures have been taken to ensure economic growth," Liu Jiayi, the head of
CNAO, told reporters.

The audits focused on whether funds were used in line
with industrial restructuring policies, and whether the money went to
high-pollution or energy-intensive projects.

Expensive projects and those concerning environmental
protection, as well as money spent to tackle public emergencies, would be
closely watched, he said.

Expenditures to improve living standards, including
farm subsidies and investments in drinking water projects, would be fully
audited, he said.

China unveiled the 4 trillion yuan (580 billion U.S.
dollars) stimulus package in November to revive the economy. Growth slowed to
6.8 percent in the fourth quarter.

Auditors will reveal extravagance, large losses and
waste in stimulus spending, as well as other serious violations and crimes, Liu
said.

Although no major problems were found during the
audits, "there was still room to improve," he said.

He noted that money hadn't become available quickly
enough in some underdeveloped areas with limited fiscal revenue, and overlapping
construction persisted in some areas due to poor planning.

About 6 billion yuan was misused in 2008. Most of the
money has been confiscated, according to Liu.

"We will hit hard against violations. No mercy will
be shown when dealing with illegal activities," Liu said.

Liu said the CNAO would start a full-scale audit this
year of how funds were used for the Beijing Olympic projects. The income and
expenses of the Beijing Organizing Committee for the Games of the XXIX Olympiad
(BOCOG) would also be audited.

Last year, selective audits were conducted on several
Olympic projects and irregularities were found "in one or two"-- meaning very
few, Zhang said, without giving details. He added that the BOCOG had made
immediate corrections.

The CNAO was now focused on checking the quality,
fund management and land use of reconstruction projects in quake-stricken
Sichuan Province, said Zhang.

EU plays down need for further stimulus amid shrink forecasts

2009-05-11T13:47:00.000-07:00

Special
Report: Global Financial Crisis

BEIJING, May 5 (Xinhua) -- Eurozone finance chiefs on Monday recommended against additional stimulus measures in spite of forecast economic contraction in the region and in Latin America.

"All ministers in the Eurogroup, including the European Central Bank, agree that the fiscal efforts launched by the Eurozone countries should be sufficient for the time being," said Jean-Claude Juncker, Luxembourg prime minister and the chairman of the Eurogroup of Eurozone finance ministers.

Juncker's view was echoed by Austrian Finance Minister Josef Proell at a regular monthly meeting of the Eurogroup.

"We have a lot in the pipeline...Many elements of the stimulus packages, many of our tax reductions will only start to have an effect in the coming weeks and months," Proell said.

The European Commission forecast earlier on Monday that the Eurozone economy will contract by 4 percent this year and by a further 0.1 percent next year, plunging into the deepest and most widespread recession since the Second World War.

It was a sharp revise-down from a January estimate, which forecast a contraction of 1.8 percent for the EU and 1.9 percent for the euro zone this year before positive growth for both areas next year.

Meanwhile, economy of Central and South America, which is busying combating the A/H1N1 influenza, will shrink over 0.3 percent in 2009, said the Economic Commission for Latin America and the Caribbean (ECLA).

Mexico, the center of the epidemic, will be hardest hit with impacts on its tourism, transportation and food industries as the virus continues to spread. The country is to see a deep reduction of 2 percent in its economy this year, said ECLA.

The World Health Organization (WHO) Monday said it had received reports of 1,003 confirmed cases of A/H1N1 influenza from 20 countries, warning of "many surprise" changes in its evolvement.

The initial situation can change "in many ways, with many, many surprises," said WHO Director-General Margaret Chan.

"Historically, influenza pandemic has encircled the world in two, sometimes three waves," she said, citing the deadliest 1918 pandemic.

Major epidemic outbreaks usually mean dwindling business opportunities and reluctant trade. In 2008, a flu pandemic cost 3 trillion U.S. dollars and caused a nearly five-percent drop in world gross domestic product, according to the World Bank.

Observers have feared the flu could reverse initial gains in the fight against the economic recession, thus delaying the process toward an end of its grips on the world economy.

Eurogroup chief warns of social crisis
with unemployment set to jump

BRUSSELS, May 4 (Xinhua) -- European countries are
heading into a "social crisis" as unemployment is set to jump amid the financial
and economic crisis, the chairman of the Eurogroup of finance ministers warned
on Monday.

"We are in the heart of an economic and financial
crisis and we are heading towards a social crisis," Jean-Claude Juncker, who is
also the Luxembourg Prime Minister, told reporters after chairing a regular
monthly meeting with Eurozone finance ministers. Full story

Indicators point to China recovery

2009-05-11T13:46:00.000-07:00

Special Report: Global Financial Crisis

BEIJING,May 5-- The economy is likely to expand 7 percent in the second quarter - up from the first quarter's 6.1 percent - even as it confronts the painful prospect of shedding industrial overcapacity, a top government think tank said Monday.

"Economic growth will pick up in the second quarter as the government's stimulus measures gradually take effect," the State Information Center (SIC) forecast.

"There has been preliminary success in arresting the economy's downward trend," it said, but did not mention any fallout from the global H1N1 flu alert.

But Zhu Baoliang, an SIC economist and one of the authors of the SIC report, said the economy will only be slightly affected by the H1N1 flu.

Annualized GDP growth sank to a decade's low in the first quarter, largely because of a collapse in export demand.

But analysts said the economy might have bottomed out since then as latest economic figures are increasingly upbeat.

The CLSA China Purchasing Managers Index (PMI), a gauge of manufacturing activity, rose to 50.1 in April, the first time it has been above 50 since last August, CLSA Asia-Pacific Markets said yesterday. A PMI reading above 50 indicates an expansion of the manufacturing sector, while a reading below 50 signals a contraction.

Also, the PMI index compiled by the Federation of Logistics and Purchasing rose for the fifth straight month in April to 53.5 percent, up 1.1 percentage points from a month earlier.

The positive economic signs sent stock markets up across Asia, with the mainland's Shanghai Composite Index rising 3.3 percent and Hong Kong's Hang Seng index 5.5 percent.

"The Chinese government has been extremely successful in stimulating investment," said Eric Fishwick, CLSA head of economic research. "We hope that firmer domestic demand, as government spending gains traction, will keep the PMI above 50 in the months to come."

The World Bank said in a report in early April that the Chinese economy is expected to bottom out by the middle of 2009. It also forecast China's economic growth at 6.5 percent for the year.

The International Monetary Fund also forecast last month that growth in China is expected to slow to about 6.5 percent this year.

Consumer spending held fast over the past months, despite looming unemployment pressure. About 2.68 million vehicles were sold in the first quarter, making the nation the world's largest auto market during the period.

Housing sales surged 23.1 percent by value while retail sales rose 15.9 percent in the first quarter, 3.6 percentage points higher than the same period a year earlier.

"Based on the clear uptrend in recent economic activity we believe the worst is already behind China in terms of economic growth," Sun Mingchun, chief China economist of Nomura International, wrote in a research note. Sun said China would achieve its 8 percent growth target this year, with a V-shaped growth trajectory.

But some analysts argue that the figures could be volatile and the economy has to deal with the structural problem of overcapacity.

"It's still too early to say the economy is experiencing a real recovery," said Zhu, the SIC economist. "Over the past months, local enterprises have been running down their inventories. Now they have to reduce overcapacity."

(Source: China Daily)

Wall Street rallies on positive economic data

2009-05-11T13:45:00.002-07:00

NEW YORK, May 4 (Xinhua) -- Wall Street rallied on Monday as reports showed that construction spending and pending home sales rose in March.

The U.S. Commerce Department reported early on Monday that construction spending during March 2009 was estimated at a seasonally adjusted annual rate of 969.7 billion U.S. dollars, 0.3percent above the revised February estimate. It was the best reading since last September. Analysts had expected a 1.5-percent loss.

The Pending Home Sales Index, a forward-looking indicator based on signed contracts, increased 3.2 percent to 84.6 in March, the National Association of Realtors reported.

Major metal producers rose as metal prices were boosted by an encouraging report about manufacturing in China. The Purchasing Managers' Index of China's manufacturing sector rose for a fifth straight month in April to 53.5, up 1.1 points from a month earlier. Investors bet that rising demand from China would help stabilizing metal prices.

Stocks also gain momentum from a better-than-expected quarterly report from communications giant Sprint Nextel. The third largest mobile service provider posted a loss wider than the previous quarter, but its earnings per share excluding one-time items beat Wall Street expectations.

The Dow Jones average rose 214.33, or 2.6 percent, to 8,426.74.The SP 500 index rose 29.72, or 3.4 percent, to 907.24. The SP 500 is now up 0.4 percent for 2009.

The Nasdaq composite index rose 44.36, or 2.6 percent, to 1,753.56.

U.S. regulators urge Wells Fargo to raise more capital: report

2009-05-11T13:45:00.001-07:00

WASHINGTON, May 4 (Xinhua) -- U.S. regulators have urged Wells Fargo to raise more capital after government "stress tests" showed the bank would have trouble surviving a deeper recession, the Associated Press reported on Monday.

The report cited two people familiar with the matter as saying that Wells Fargo is one of several banks that regulators said would need larger buffers to protect them against possible future losses.

The fourth-largest U.S. bank is one of the 19 largest U.S. banks undergoing the government "stress tests," the result of which is expected to be released on Thursday. The initial stress test results were revealed to the banks last month.

China's power output dip seen for April

2009-05-11T13:45:00.000-07:00

Special Report: Global Financial Crisis

BEIJING,May 5-- China's power generation is likely to have fallen by 4 percent year-on-year in April, signaling that a recovery in the economy was still some way off, said industry insiders.

The country's power generation might have decreased year-on-year last month, and the downward rate might have been larger than that seen in March, said Xue Jing, director of the statistics and information department under the China Electricity Council (CEC).

The government is expected to release the official figure later this month.

China's power generation, an important barometer of the economy, is still "fluctuating at the bottom level", Xue said.

According to sources with State Grid Corp of China (SGCC), the country's main power transmission company, China's power generation in terms of the daily average dropped by 3.9 percent from April 11 to 20, when compared with the same period last year.

This was larger than the 3.5 percent drop seen from April 1 to 10, said the sources.

"Figures for the last 10 days of April are not optimistic, as there has been no big recovery in industrial power consumption, which accounts for a large part of the total power usage," said a source with SGCC yesterday.

From April 11 to 20, power generation in China's eastern coastal regions fell. Power generation in Guangdong fell by 18.5 percent compared with the same period last year; that in Guangxi was down by 25.3 percent, and in Jiangsu, it fell by 10.2 percent.

Only Zhejiang saw a 0.7 percent growth year-on-year in those 10 days, said SGCC.

In the country's western area, apart from Yunnan, which saw a 40.4 percent year-on-year growth in the same period, provinces and autonomous regions such as Inner Mongolia, Shanxi, Gansu, and Ningxia all saw their power generation decrease by between 7 percent and 15 percent, SGCC sources said.

Although the rate of decline in April may be faster than that in March, the big drop in power generation overall has been halted, said Chang Jianping, an official with the State Electricity Regulatory Commission. "We expect that the situation will get better after May."

China's power demand will continue to fall in the first half of this year before picking up in the third quarter, the CEC had said earlier.

The first two quarters will be the most difficult time for the industry, it had said.

From the end of the second quarter, power demand may start to increase in north and east China as well as the southern coastal regions. That should, in turn, drive up demand in the central and western regions in the fourth quarter, it said.

Since October last year China has seen negative growth in power generation.

In the first quarter of this year, the country generated 779.7 billion kWh of electricity, a 2 percent drop year-on-year. The downward rate was 4 percentage points lower than that in the fourth quarter of last year.

(Source: China Daily)

Chinese consumer confidence remains strong amid financial crisis

2009-05-11T13:44:00.000-07:00

Special
Report: Global Financial Crisis

BEIJING, May 4 (Xinhua) -- Kirk John-Williams registered a cosmetics
trading company in China only three months ago. Although the world economy has
been affected by the financial crisis, the Trinidad and Tobago businessman is
confident in the Chinese consuming market.

"The financial crisis won't have too much impact on Chinese consuming
market. The upper class may have been affected by the economic downturn, but
most people from middle class are not badly hit. Chinese consumers are still
willing to spend," he said.

Economists believe China's exports may recover later this year. The most
effective means to spur economy at the moment should be stimulating domestic
consumption.

"China should have learnt a lesson that an export-oriented economy is not
sustainable. Stimulating domestic consumption will not only spur the economy,
but also meet the needs of the general public," a researcher from China National
School of Administration, Ding Yuanzhu, told Xinhua.

China's economy rose 6.1 percent year on year in the first quarter.
Consumption contributed more than 4 of those percentage points, retail sales
during the same period increased by 15.9 percent. Urban residents' disposable
income rose 11.2 percent and rural residents' rose 8.6 percent.

Chinese consumers are less pessimistic on economy than other countries'.
According to a survey by Nielsen of 50 countries and regions, only 35 percent of
Chinese people believed the domestic economy was in a contraction. The figure
was the lowest among the 50 world markets.

The survey report said Chinese consumers were "willing to spend and feel
that the next 12 months would be a good time to buy things they needed."

"Chinese consumers still have strong confidence on economy. People are
still willing to travel, spend money on clothes and buy advanced technologies.
This is a young but energetic group," Neilson's Vice Chair Susan Whiting said.

The Neilson contributed the confidence to the 4-trillion-yuan (585 billion
U.S. dollars) stimulus package and abundant domestic deposit.

In the auto market, stimulus packages are taking effect. Auto sales showed
strong signs of recovery after the country cut purchase taxes for small
engine-sized cars and rolled out detailed stimulus package for auto sales in
rural areas.

According to the China Association of Automobile Manufacturers, auto sales
topped 2.64 million units in the first quarter, up nearly 6 percent year on
year. The quarterly sales overtook the United States for the first time to
become the world's largest auto market.

Ye Zi, who has been working in Beijing for nearly three years, just bought
a 1.6 liter car which cost her more than 100,000 yuan.

"In such a big city, driving a car would be a lot more convenient. I can
afford a car now, and the government reduced the purchase tax for small cars, so
I bought it," she said.

Echoing the recovering auto market, the 13th Shanghai International
Automobile Industry Exhibition, which ended on April 28, became an auto fest for
carmakers.

Floor areas for the exhibition hit a record of 170,000 sq meters this year.
More than 1,500 auto and auto part companies, including those from China, the
United States, Germany and Japan, took part in the exhibition.

"Automakers are cutting funds for auto exhibitions across the world, but
the Shanghai exhibition is an exception. If they only have budget for one
exhibition, that will be the Shanghai exhibition, because China is the only
growing auto market in the world," vice president for the Shanghai International
Exhibition Co., the organizer, Lu Ren said.

During the 9-day show, more than 600,000 visits were made. Some high-end
brand cars, such as Rolls-Royce and Bentley, were sold out on the media day
before the exhibition started. The Chinese market has become the most important
for automakers across the world.

According to Volkswagen's first quarter report, China has overtaken Japan
to become Bentley's fourth largest market. Last year, Bentley's sales in the
global market fell 25 percent year on year, but rose from 318 units to 518 units
in China, up more than 60 percent.

In addition to auto markets, home sales in the first quarter also showed
positive signs.

At April's Beijing Spring Real Estate Trade Fair, from April 8 to 12, more
than 150,000 people visited the fair and signed intention contracts worth more
than 3 trillion yuan.

"Houses are one of the largest spending for Chinese people. They may spur
consumption in related sectors such as decoration, furniture and home electronic
appliances. Home sales may play a big part in stimulating domestic consumption,"
a researcher with the National Development and Reform Commission, Zhang Hanya,
said.

"The catering industry may best reflect Chinese consumers' willingness to
spend," John-Williams said. "In major cities like Beijing, Shanghai and
Guangzhou, I have not seen any signs of economic contraction."

Ding said there were two approaches to spur economy.

"One is short-term stimulus plan, which may rely on investing real estate
industry and infrastructure projects. The other is long-term stimulus plan, such
as urbanization, social insurance system improvement, education and
technologies."

The first round of stimulus package aimed at quickly spurring the economy,
but new stimulus packages should focus more on long-term goals. People will
spend more only when they feel social insurance has been put in place," he said.

Chinese economy rebounds, but return to rapid growth elusive

2009-05-11T13:43:00.001-07:00

Special
Report: Global Financial Crisis

By Xinhua Writer Cheng Yunjie

BEIJING, May 3 (Xinhua) -- Decoupling from the world,
and the economic downturn much of it is experiencing, has proven impossible for
China. But its resilience is receiving more recognition, with many leading
financial institutions upgrading their 2009 growth forecasts since mid-April.

The adjustments for gross domestic product (GDP)
growth, ranging from 0.5 to 2.3 percentage points, were based on signs of a
turnaround in the first quarter. These indicators included
stronger-than-expected real GDP growth, recovering property investment, a
pick-up in power consumption and a surge in bank lending.

Merrill Lynch Co. said it expected China's GDP
to grow 7.2 percent in the second quarter and 8 percent this year, while Goldman
Sachs raised its projection from 6 percent to 8.3 percent, the most optimistic
forecast so far. Other forecasts include UBS, which raised its estimate by 0.5
point to 7 percent and CLSA Asia-Pacific, which lifted its outlook by 1.5 point
to 7 percent.

China's policymakers can take heart from these
forecasts. Every upward revision, big or small, given the global economic
slowdown, might point to a better chance for the nation to achieve its 8-percent
growth target. That level of growth is considered necessary to raise living
standards while maintaining social stability.

But there's still the question of whether rapid
growth is sustainable. Some analysts believe it isn't unless China can rebalance
its economy and achieve higher efficiency, lower environmental costs and a more
reasonable balance among investment, trade and consumption.

QUANTITY OR
QUALITY?

In an interview with Xinhua, Stephen Roach, chairman
of Morgan Stanley Asia, urged Chinese authorities to get more serious about
stimulating private consumption because the global economy remains "pretty weak"
and might only achieve a weak recovery.

"China has responded to the crisis the way it has
always responded to global problems. That is, using proactive fiscal stimulus
mainly in the infrastructure area to provide temporary support in the downturn
until the global economy comes back. It worked in the 1997 Asian financial
crisis and the 2000-2001 mild recession. But this is a different sort of
problem," said Roach.

"Once the stimulus wears off and if there is no
follow-through, the Chinese economy will weaken again. I don't think exports
will recover in the weak global economy."

Domestic economists voice similar worries, saying
that the speed of growth doesn't matter as much as the quality. Liu Shangxi,
deputy dean of the Research Institute for Fiscal Science at the Ministry of
Finance, said that the 6.1-percent year-on-year growth in the first quarter had
been "fairly good" for China. But, he said, "sometimes, it's worth slowing down
a bit to have the economy move more stably."

Wang Xiaoguang, an economist with the National
Development and Reform Commission (NDRC), the chief planning agency. said that
the government's annual growth target had become mostly symbolic.

For five years in a row, the target was 8 percent,
and for five years in a row, the growth rate overshot the target. Wang said the
government had faced a dilemma: a cut in the target might undermine public
confidence while a rise might tempt local governments to over-invest to meet a
high growth target.

The turnaround signs mostly reflected the impact of
the 4-trillion-yuan (586 billion U.S. dollars) stimulus package. Meanwhile,
retail sales still trailed investment in contributing to growth. Local
economists warned that the economy remained unbalanced and vulnerable.

"Historical records show that adjustments in the
Chinese economy would take two to three years, on average. Seven months have
passed since the impact of the global financial crisis began to tell on the
local economy.

"With a turnaround in sight, recovery might come
earlier than expected but there are still risks of a further slowdown," Chen
Dongqi, deputy chief of the Macro-Economic Research Institute under the NDRC,
told a business development forum in Guangdong in late April.

BUYING CURE

It's widely accepted among economists that China
should boost domestic private consumption by leading individuals to buy more and
save less. The key question is: how?

"Two big programs" Roach advocates call for doubling
the investment in social security immediately to 150 billion U.S. dollars and
establishing a goal of raising consumption as a share of the economy from 36
percent to 50 percent within five years.

"What I think is missing here is the social safety
net, social security pension and unemployment insurance. Because of the absence
of the safety net, China has seen a high level of precautionary saving," he
said.

Roach suggested that China develop a private pension
system in particular so total employee compensation could rise in tandem with
productivity. "Chinese companies need to partner with their workers and provide
medical care [and] retirement investing for their workforce. Chinese workers'
total pay package should have both wages and benefits," he said.

Liu agreed that the primary task in expanding
consumption was to raise incomes. "Securing the legitimate interests of workers
is particularly significant when the economy slumps. It would be like drinking
poison to quench one's thirst if businesses sought to expand corporate earnings
at the cost of workers' pay and benefits," he said.

Low labor costs and massive capacity have propped up
China's prosperity over the past decades. But the proportion of wages to
national income has been on a long decline since the 1990s.

Between 2002 and 2006 alone, economists estimate the
figure dropped from 62.1 percent to 57.1 percent. Meanwhile, the contribution of
consumption to GDP growth fell from 43.6 percent to 38.9 percent.

"A more meaningful index to judge the sustainability
of China's economic growth would be the proportion of wages to national income,"
Liu said. "If this ratio did not rise, people would remain poor, and thus
expanding consumption would be empty talk."

Chinese are far from wealthy. Only 4 percent of the
workforce, and just 10 percent of the urban workforce, earn more than 2,000 yuan
a month, the threshold for individual income tax.

As Chinese residents hold 2.43 trillion yuan in
aggregate deposits, economists say one immediate way to boost consumption would
be to stabilize spending on staple property -- including housing and automobiles
-- and support tourism and cultural activities.

"People spend much of their money on housing and
food. The government should encourage people to entertain themselves more," Wang
said.

CHINA 'NO
LOCOMOTIVE'

Although China might be the first major economy to
recover from the downturn, economists disagree on when China will return to
sustained high growth.

Morgan Stanley, for example, has forecast a firm
recovery by mid-year, but said sustainable growth through 2010 would still hinge
on what happens in other countries.

"China will be stronger. But will that strength be
enough to allow others to follow in its footsteps? I don't think so," said
Roach.

"Most of China's resilience comes from infrastructure
building, roads, property consumption ... [this] won't have an impact on the
United States and Europe. This resilience is only temporary while its stimulus
is local rather than global."

Central bank governor Zhou Xiaochuan also warned in
late April during World Bank-IMF meetings in Washington that the rebound in
China's economy had to be consolidated. He said conditions in China would permit
rapid economic development again, once macroeconomic policies such as the
stimulus plan took effect.

Challenging internal and external conditions, he
said, included continuously shrinking external demand, a relatively large
decline in exports, overcapacity in some industries, falling government revenue
and lingering employment pressure.

As China emerges from the shadow of the downturn,
together with many of its Western partners, the world is closely watching the
socialist market economy that it is still trying to develop.

It was interesting to see that there was much "the
ideologically-constrained West" could learn from China, just as there was much
China could learn from the West, said Roach.

"China has gone slow in many areas, especially in the
opening up of its financial market. But China made the right choice," he said.

"Focusing on stability is a huge plus for China. But
the nation must be vigilant in its financial policies, especially monetary and
regulatory policies, and not allow asset bubbles and financial innovations it
doesn't understand," said Roach.

Chinese retail sales up 9% during May Day holiday

2009-05-11T13:43:00.000-07:00

BEIJING, May 3 (Xinhua) -- China's retail sales climbed 9 percent from a year ago to about 12 billion yuan (1.76 billion U.S. dollars) during the three-day May Day holiday, the Ministry of Commerce said Sunday.

The estimate was based on sales from May 1 to May 3 at 1,000 major domestic retailers monitored by the ministry.

The ministry said robust sales were reported for gold, jewelry, home appliances and autos, as retailers launched promotion campaigns.

Sales of gold and other jewelry rose 19.6 percent, the ministry said, without giving specific figures.

However, it said the Beijing Caishikou Department Store, a major gold retailer in the capital, saw its sales nearly double to 14.3 million yuan on May 1 alone.

Sales of appliances, such as LCD TVs, air conditioners, refrigerators and lap-tops, increased 11.4 percent, while those of automobiles grew 9.2 percent.

World downturn cuts 1Q output growth in China's Guangdong to 0.9%

2009-05-11T13:42:00.001-07:00

Special Report: Global Financial Crisis

GUANGZHOU, May 3 (Xinhua) -- First-quarter industrial output growth slowed to a crawl in south China's Guangdong Province as the global downturn took its toll on the export hub.

The provincial economic and trade commission said Sunday that the output of major industrial enterprises rose just 0.9 percent from a year earlier to 303.788 billion yuan (44.5 billion U.S. dollars).

The growth rate was 12.7 percentage points lower than the year-earlier level and 4.2 percentage points below the national average.

However, the rate was 0.1 percentage point above the level in the first two months.

Aggregate profits of large enterprises, defined as those with annual sales of at least 5 million yuan, fell 33.73 percent to 21.72 billion yuan in the first two months, the commission said.

However, thanks to efforts to boost the provincial economy, Guangdong's fixed-asset investment rose 17.8 percent to 65 billion yuan in the first quarter, including 14.13 billion yuan for technical upgrading, up 50.4 percent.

Interview: Building Asia's own demand key to recovery

2009-05-11T13:42:00.000-07:00

Special Report: Global Financial Crisis

By Zhou Erjie, Xu Lingui, Wang Jingzhong

BALI, Indonesia, May 5 (Xinhua) -- Building up the demand of Asian countries, both domestic and intra-regional, is crucial to help Asia recover more quickly than the rest of the world, said Jong-Wha Lee, acting Chief Economist of the Asian Development Bank(ADB) in an interview with Xinhua.

"Asian countries should do at least two things. One is to strengthen domestic demand and the other is to make big the regional demand, because this is very difficult time to rely on external demand for their source of growth," said Jong-Wha Lee on the sidelines of ADB's annual meeting ended Tuesday in Bali, Indonesia.

Export-reliant Asian economies are being hit hard by collapsing demand in the United States and Europe, as recession-hit consumers and companies cut back on spending.

ADB estimates that the crisis will keep more than 60 million people in developing Asia trapped in absolute poverty this year, and nearly 100 million more in 2010.

"Fortunately, Asian countries have more room to cut the policy rate, if the situation becomes deteriorating. Asian countries mobilize fiscal stimulus packages very actively, aggressively and very responsibly. So fiscal stimulus packages, especially like those adopted by China, (South) Korea and Japan would help to strengthen domestic demand," he said.

"China has been doing very well. Credit growth still maintains double-digit and actually is increasing. Fiscal stimulus was coming in," said Lee. "This time, China responded very quickly, earlier than other Asian countries and that's why we see some positive signs coming earlier than other countries."

In terms of boosting intra-regional demand, the economist called for cooperative efforts to do it simultaneously, mobilizing resources to build the regional demand.

"We need to trade more, we need to provide certain regional mechanism so as to strengthen trade and investment and financial transactions, like the CMIM (Chiang Mai Initiative Multilateralization) and Asian bond market. It will all do help to strengthen regional demand," he said.

China's domestic market is important to the region, Lee said, as Association of Southeast Asia Nations (ASEAN) rely on China for more than 30 percent of their exports and the most important trading partner of Japan and India is both China.

"Our forecast for the Asian developing counties as a whole for 2009 is 3.4 percent. This is a significant slowdown from the 6.3 percent in 2008, but Asian countries will show a mild recovery in 2010, the growth rate will be more than 6 percent," Lee said.

"I think Asian economy is very close to the bottom. The big question is that how long they would stay at the bottom, it would be a long and hard process to get to recovery," he added.

The economist also contended that Asia's voices in the global institutions should be increased.

"Asia's economy has increased significantly. Now more than half of the (world's) population is living in Asia. One third of GDP in terms of Purchasing Power Parity (PPP) are produced in Asia, including Japan. But if you look at the global institutions, how much can you reflect Asia's voice and Asia's participation?" he asked.

"As much as our economic size becomes increased, our influence should also increase. That does not mean we need to have certain power, it also comes together with our responsibility. We try to be responsible to the global institutions," Lee said.

S Korean economist: China's yuan may be Asia's settlement currency

2009-05-11T13:41:00.001-07:00

Special Report: Global Financial Crisis

SEOUL, May 5 (Xinhua) -- A senior South Korean economist said in a report on Tuesday that the Chinese currency yuan may emerge as a settlement currency in Asia.

"Trade volume between China and other Asian countries is huge. If the yuan is used as a settlement currency in the region, the need to hold the U.S. dollar will decrease for Asian countries," said Park Bun-soon, a senior fellow at the Samsung Economic Research Institute.

However, he said it will take time for the Chinese currency to be a global reserve currency.

"Although the overwhelming influence of the U.S. economy is falling, it won't be easy for any currency to challenge the established reserve currency," he said.

Park said although the yuan may not become the key currency, it could be recognized as one of the major international currencies like the dollar and the euro after 2030 when the size of the Chinese economy is expected to surpass that of the U.S.

Indonesian Central bank cuts rate benchmark to 7.25%

2009-05-11T13:41:00.000-07:00

Special Report: Global Financial Crisis

JAKARTA, May 5 (Xinhua) -- Indonesian central bank (BI) Tuesday reduced rate benchmark by 25 basis points to 7.25 percent, a BI senior official said here.

"The decision to reduce the rate benchmark was conducted after governor board learning the ongoing economy developments in domestic and international markets," the Detik.com quoted Strategic Planning and Public Relations Director at BI Dyah Makhijani as saying on Tuesday.

She said that it was the lowest benchmark rate in the last four months. On April 3, BI cut 25 basis points of the rate benchmark to 7.50 percent.

Indonesian airlines stops operation amid crisis

2009-05-11T13:40:00.001-07:00

Special
Report: Global Financial Crisis

JAKARTA, May 5 (Xinhua) -- An Indonesian airlines company stopped operation
following a severe financial problem, the first stoppage in the country amid the
crisis, local media reported Tuesday.

Due to a financial problem, Lintasan Nusantara (Across the Archipelago) has
filed in a notification to stop operation, a report of the Bisnis Indonesia
daily said.

According to the report, Air Transport Director General and the
Transportation Minister Herry Bhakti Gumay said it has received a request to
stop the operation of the company.

He said that Linus officially stopped its operation by April 27, adding
that all of its planes had undergone a periodical checks in a plane maintenance
facility.

He pointed out that with the notification, Linus Airways becomes the first
Indonesian airlines company that have stopped operation in the wake of economic
crisis.

Linus Airways has been in operation for one year using two BAe 146-200,
serving short-haul flights from Java to Sumatra and Kalimantan.

There are 49 airlines operating in Indonesia at the moment, serving the
transportation for the people living in hundreds of islands across the country.

McDonald's to add 30 more outlets, creating 6,000 jobs in New Zealand

2009-05-11T13:40:00.000-07:00

Special
Report: Global Financial Crisis

WELLINGTON, May 5 (Xinhua) -- The fast food restaurant chain McDonald's is
planning to open 30 outlets and create 6,000 additional jobs in New Zealand over
the next three years as part of a major expansion drive.

The fast food company is buying land and equipment for new outlets and
refurbishing existing ones, Radio New Zealand reported on Tuesday.

The company said it is looking to raise its domestic employee numbers to
14,000.

The expansion plans involve capital spending of around 100 million NZ
dollars (56 million U.S. dollars).

The first McDonald's outlet in New Zealand opened in Porirua in 1976.

China surpasses U.S. to become Brazil's biggest trading partner

2009-05-11T13:39:00.001-07:00

BRASILIA, May 4 (Xinhua) -- China replaced the United States to become
Brazil's biggest trading partner, said Brazil's Ministry of Development,
Industry and Exterior Trade on Monday.

According to the trade balance released by the ministry, the sum of
Brazil's exports and imports with China reached 3.2 billion U.S. dollars in
April, over the 2.8 billion dollars in its trade with the U.S.

Trade Minister Welber Barral said the change was "historic," as the U.S.
has been Brazil's biggest trading partner since the 1930s.

According to Brazil's official statistics, the bilateral trade volume
between Brazil and China reached 36.44 billion dollars in 2008, increasing 55.9
percent from 2007, among which Brazil's export volume to China hit 16.4 billion
dollars, import volume 20 billion dollars, rising 50.8 percent and 56.9 percent
from the previous year respectively.

However, Barral said that the Brazilian government is trying to diversify
the exports to China, which till now are mainly soya, cellulose, fuel, and
manufactured products.

Promotions and prizes fuel Shanghai's retail spending

2009-05-11T13:39:00.000-07:00

BEIJING, May 4 -- A series of promotions and prize awards fueled shoppers' enthusiasm during the May Day holiday in Shanghai as retail sales surged 14.2 percent from a year earlier.

Backed by various themed promotions, sales revenue at 423 large and medium retail businesses totaled 2.34 billion yuan (342 million U.S. dollars) over the three-day holiday, which started on Friday, the Shanghai Municipal Commission of Commerce said yesterday.

The growth is, however, down by 7.8 percentage points from the same period last year because consumers still felt the pinch of the economic slowdown and fewer travelers came to Shanghai amid A-H1N1 flu concerns.

"Facing the challenges, retailers and government-related departments have adopted various measures to spur domestic demand and sales exceeded earlier expectations," said Chen Yuxian, a commission official.

Consumers made a beeline for major department stores and shopping malls from Thursday as they were lured by massive price discounts and prize promotions.

Nine retailers, including the Pacific Department Store at the Xujiahui commercial district, offered gift vouchers of up to 300 yuan if each consumer bought 300 yuan worth of products. The Xuhui District government also allocated a 2-million-yuan prize in a lucky draw, including three Mercedes-Benz sedans and 150 gold bars valued at 4,300 yuan each.

The combined sales in the Xujiahui commercial district surged 28 percent compared to a year ago to 114 million yuan during the three-day holiday, beating an earlier estimate of 100 million yuan.

The New World City in Nanjing Road Pedestrian Mall also rang up 102 million yuan in sales after offering 120 yuan coupons for each purchase totaling 300 yuan.

Its average daily sales topped 781 million yuan over the three-day holiday, 4.6 times more than the sales in 2000 and was also the highest over the past nine years, according to the commission.

Retailers said the glittering sales also reflected the release of pent-up consumer demand that has been restrained over the past few months.

"Consumers need to buy shoes and garments as the season changes," said an official from Oriental Department Store in Xujiahui. "May is also a prime season for weddings and other celebrations, which gave a boost to market demand."

Purchases of clothes surged the most by 123.9 percent during the holiday and electronic products, home appliances, gold and health-care goods were also popular.

The combined sales of the Bailian Group rose 12.3 percent compared to a year ago to 888 million yuan over the three days.

Nextage Department Store in Pudong New Area rang up 23.1 million yuan in revenue on Friday, a jump of 60 percent and the No. 1 Department Store on Nanjing Road also gained 46 percent to 9.28 million yuan.

(Source: Shanghai Daily)

Third phase of Canton Fair opens with measures against A/H1N1 flu

2009-05-11T13:38:00.000-07:00

Special Report:
World Tackles A/H1N1
Flu


Visitors wear masks during the third phase of the 105th Canton Fair in Guangzhou, capital of south China's Guangdong Province, May 3, 2009. The third phase of the 105th Canton Fair, China's largest trade event, began Sunday with preventive measures against the A/H1N1 flu. (Xinhua/Lu Hanxin)
Photo Gallery

GUANGZHOU, May 3 (Xinhua) -- The third phase of the
105th Canton Fair, China's largest trade event, began Sunday in the capital of
the southern province of Guangdong with preventive measures against the A/H1N1
flu.

Organizers said there were 60 stations where
visitors' temperatures could be taken. A registration system was adopted for
guests at every hotel for the third phase of the biannual trade fair, which is a
barometer of China's foreign trade.

According to Tang Xiaoping, deputy head of the
provincial health bureau, three medical service booths were put up at the fair.

Chen Chaoren, deputy head of the organizing committee, said the fair was in good order with no A/HIN1 cases reported so far. Public venues inside and outside the exhibition hall would be sterilized every day during the trade fair, according to Chen.

A staff member checks a visiter's body temperature during the third phase of the 105th Canton Fair in Guangzhou, capital of south China's Guangdong Province, May 3, 2009.(Xinhua/Lu Hanxin)
Photo Gallery

The month-long trade fair is held in three phases.
This year, the first ran from April 15 to 19 and the second from April 24 to 28.

The current, third phase ends Thursday.

Organizers estimated nearly 130,000 business people
from 200 countries and regions would attend this session.

This part of the fair features textiles and garments,
footwear, office equipment, bags, pharmaceuticals and other medical products,
and food.

No increase in rates, hints PBOC

2009-05-11T13:37:00.001-07:00

BEIJING,May 7-- The central bank will continue following a moderately loose monetary policy, its quarterly report said Wednesday, dispelling speculation that the stabilizing economy could prompt it to raise interest rates.

"The central bank will continue to ensure ample liquidity in the banking system and reasonably increase loans to fund the economy," the People's Bank of China (PBOC) report said.

The report also allays fears that a huge supply of loans in the first quarter could trigger a rise in property and other assets' prices, and thus lead to inflation.

"Positive changes have taken place in the economy and the situation was better than expected in the first quarter. But the foundation for a rebound is not yet solid," the report said. The credit growth has to increase further to counter the impact of a worsening world economy.

Tao Dong, chief Asia economist of Credit Suisse in Hong Kong, is certain about the normalization of the country's monetary policy. "China's economy is recovering faster than the rest of the world, so its monetary policy will normalize before other economies," he told Bloomberg.

The PBOC is likely to maintain the one-year lending rate at 5.31 percent this year and raise it by 99 basis points only next year, Tao said. But it could reinstate the quota system as early as the next quarter, limiting the lending by banks to check a possible rise in property prices because of the increase in the amount of new loans.

New loans reached a record 1.89 trillion yuan (277 billion U.S. dollars) in March, pushing the first quarter's total to 4.58 trillion yuan, very close to the 4.9 trillion yuan for the whole of last year and the 5 trillion yuan goal set for this year.

The strong quarterly growth came after the government relaxed its curbs on loan growth in November, and tried to boost the economy with "ample liquidity" and a 586 billion dollars stimulus package to counter the negative impact of the global financial crisis.

"Unless the economy signals a strong recovery, the PBOC will not change its monetary policy," Dong Xian'an, an analyst with Southwest Security, said. "It may tighten it a bit in the following months, though."

But many economists and experts have warned that despite the huge fiscal stimulus and some good signs in the first quarter, deflation is most likely to continue through the rest of the year.

(Source: China Daily)

U.S. regulators set June 8 deadline for banks to develop capital plan

2009-05-11T13:37:00.000-07:00

WASHINGTON, May 6 (Xinhua) -- U.S. regulators said on Wednesday that the nation's largest banks that were found to have the need to raise more capital in the "stress tests" will have one month to develop the plan.

After the details of the "stress tests" are released on Thursday afternoon, any banks needing to augment its capital buffer will have until June 8 to develop a detailed capital plan, and until Nov. 9 to implement that capital plan, said the regulators.

"Over the next 30 days, any bank holding company (BHC) needing to augment its capital buffer will develop a detailed capital plan to be approved by its primary supervisor, in consultation with the FDIC, and will have six months to implement that plan," said a joint statement released by Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair.

U.S. media have reported that about half of the 19 largest U.S. banks will be told to raise more capital after being "stress tested" by the government.

Citigroup, Bank of America, Wells Fargo and JPMorgan Chase are reported to be among those who will have to boost their reserves.

But Bernanke on Tuesday ruled out the possibility of a new round of massive bailouts to save the U.S. banking giants.

"I've looked at many of the banks and I believe that many of them will be able to meet their capital needs without further government capital," Bernanke told the Congress' Joint Economic Committee.

In Wednesday's joint statement, U.S. regulators also vowed to support the banks if necessary.

"A strong, resilient financial system is necessary to facilitate a broad and sustainable economic recovery," said the statement.

"The U.S. government reaffirms its commitment to stand firmly behind the banking system during this period of financial strain to ensure it can perform its key function of providing credit to households and businesses," it added.

EU, U.S. reach provisional deal in beef dispute

2009-05-11T13:36:00.001-07:00

BRUSSELS/WASHINGTON, May 6 (Xinhua) -- The European Union (EU) and the United States have reached a provisional agreement to end a lengthy dispute over hormone-treated beef, officials said Wednesday.

"Following a very good discussion today, we have reached an understanding that provides a pragmatic way forward in the long-running beef dispute," EU Trade Commissioner Catherine Ashton said in a statement after talks with U.S. Trade Representative RonKirk.

Ashton said the agreement was mutually beneficial and an effort will be made to quickly finalize it.

The agreement would provide additional duty-free access to the EU market for high-quality beef produced from cattle that have not been treated with growth-promoting hormones -- 20,000 tons of beef in the first three years, and increasing to 45,000 tons beginning in the fourth year.

Under the agreement, the United States will maintain existing sanctions and will not impose new sanctions on EU products during the initial three-year period, and will eliminate all sanctions during the fourth year.

The two sides will refrain from further litigation at the World Trade Organization (WTO) regarding the EU's ban on beef treated with certain growth-promoting hormones for at least 18 months.

Before the end of the four-year period, the two sides will seek to conclude a longer-term agreement.

The provisional deal still needs to be approved by EU governments and the U.S. Congress.

An EU ban on hormone-treated beef has been in effect since the early 1980s. The ban was challenged by the United States and Canada at the WTO in 1996.

The WTO ruled against the EU in 1998 and permitted the United States and Canada to impose annual sanctions on EU goods to the value of 116.8 million euros (155.6 million U.S. dollars).

The EU argued in 2003 that it had scientific grounds to ban hormone-treated beef and that trade rules allowed such restrictions. The United States and Canada rejected the argument and maintained their trade sanctions.

The WTO ruled in November that the United States and Canada should end their sanctions and called on the three parties to resolve the dispute.

Crude prices surge to six-month high

2009-05-11T13:36:00.000-07:00

NEW YORK, May 6 (Xinhua) -- Crude prices surged to a six-month high on Wednesday after a slowdown in private sector job losses in the United States boosted hopes for a turnaround in the economy.

U.S. private sector job losses slowed in April as employers cut491,000 from the pay rolls, less than an expected loss of 650,000.Investors believed that the U.S. economy may be on its way to recovery.

On Tuesday, Fed Chairman Ben Bernanke gave his most optimistic prediction yet about the end of the U.S. recession, saying he expects the economy to start growing again this year.

An unexpected decline in U.S. gasoline stocks also boosted the rally. The Energy Department's Information Administration said on Wednesday that gasoline stocks fell by 200,000 barrels to 212.4 million barrels last week.

Crude levels for the week ended May 1 rose by 600,000 barrels to a fresh 19-year high at 375.3 million barrels, according to the data. Analysts had expected a buildup of 2.2 million barrels.

Light, sweet crude for June delivery was up 2.50 dollars, or 4.6 percent, to settle at 56.34 dollars a barrel, the highest since Nov. 14, 2008.

In London, Brent prices rose 2.03 dollars to settle at 56.15 dollars a barrel on the ICE Futures exchange.

Wall Street rises, led by financials and energy stocks

2009-05-11T13:35:00.001-07:00

NEW YORK, May 6 (Xinhua) -- Wall Street closed higher on Wednesday, as economic data indicated job losses slowed in April and investors thought the stress tests results of banks may not be as bad as expected.

The ADP employer Services reported that companies in the United States cut an estimated 491,000 jobs in April, fewer than economists' forecast and the fewest since October. The report boosted investors' confidence.

Financials led the big board higher. Citigroup surged 16 percent after a person familiar with the matter said the lender needs about five billion U.S. dollars. Goldman Sachs and Morgan Stanley rose three percent and 6.8 percent, respectively, as people knowing the matter said they don't need more money following the stress tests.

The market was awaiting the results of the government's stress tests of the nation's 19 largest banks, due on Thursday. The report is expected to reveal which banks will need to raise capital.

Concerns about the stress tests briefly intensified in early trading after The New York Times reported on Wednesday that federal regulators have warned that Bank of America Corp. will need to raise about 34 billion U.S. dollars, more than expectations.

Energy stocks also helped the market sentiment, as crude oil rose above 56 dollars a barrel for the first time since November.

The Dow Jones rose 101.63, or 1.21 percent, to 8,512.28. Broader indexes also traded higher. The Standard Poor's 500 index rose 15.73, or 1.74 percent, to 919.53, and the Nasdaq rose 4.98, or 0.28 percent, to 1,759.10.

Banks, securities firms in Hong Kong have better access to mainland market

2009-05-11T13:35:00.000-07:00

HONG KONG, May 9 (Xinhua) -- The Chinese central government will further ease authorization requirements for Hong Kong banks to expand their existing network in the neighboring mainland province of Guangdong, under an expanded economic and trade agreement signed Saturday.

Subsidiaries of a Hong Kong bank in Guangdong shall be able to expand its network not only in the city of registration, but also in other cities in the province without first establishing separate subsidiaries there, according to the Supplement VI to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).

"This will enable the banks to expand their business network, and improve the quality and efficiency of banking services provided to enterprises," said Donald Tsang, chief executive of the Hong Kong Special Administrative Region (HKSAR).

Securities firms in the mainland and Hong Kong shall also be allowed to set up joint venture securities investment advisory companies in Guangdong.

The Hong Kong securities firm can hold up to a third of the stakes in the joint venture companies, according to the supplement agreement, which was signed by John Tsang, financial secretary of the HKSAR government, and the central government's Vice Minister of Commerce Jiang Zengwei in Hong Kong on Saturday.

Qualified mainland securities firms, upon approval by regulatory authorities, can set up subsidiaries in Hong Kong. The introduction of open-end index-tracking exchange-traded fund based on Hong Kong stocks will also be explored in the mainland.

The supplement shall come into effect on Oct. 1 this year, three months ahead of the usual schedule for previous supplements, to help fight the ongoing economic downturn.

Chinese mainland market opened wider to HK businesses

2009-05-11T13:34:00.001-07:00

HONG KONG, May 9 (Xinhua) -- The Chinese central government and the government of the Hong Kong Special Administrative Region (HKSAR) on Saturday signed the sixth supplement to a key trade agreement to give Hong Kong firms greater and easier access to the mainland market for tourism, securities and banking services, among others.

Under the supplement agreement, authorization requirements will be further eased for Hong Kong commercial banks to expand their existing networks in the neighboring mainland province of Guangdong to cover different cities province-wide.

Joint venture securities investment advisory firms between Hong Kong businesses and their mainland counterparts shall also be allowed starting Oct. 1, although the percentage of shareholding by the Hong Kong side was restricted to no more than one-third.

Mainland travel agents can also organize group tours for mainland residents bounding for the province of Taiwan to enter and remain in Hong Kong in transit. The aim was to help the trade develop multi-destination package offers, said Donald Tsang, Chief Executive of HKSAR.

The Supplement VI to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was signed by John Tsang, who is financial secretary of the HKSAR government, and Jiang Zengwei, the central government's Vice Minister of Commerce at a ceremony in Hong Kong.

Speaking at the ceremony, Donald Tsang said the supplement agreement introduces 29 measures that are built on the liberalization of 20 services sectors and open two more sectors to Hong Kong businesses, namely, research and development and rail transport.

"With the new supplement, the total number of services sectors covered by the CEPA and its supplements will thereby be expanded from 40 to 42," Jiang said.

The liberalization measures cover, among others, audio and visual services, telecommunications, legal services, convention and exhibition, transport, printing and publishing. Some of the measures will be first implemented in Guangdong on a pilot basis.

Mutual recognition of professional qualifications will be explored and encouraged in sectors such as accounting, architecture, real property and printing services. Hong Kong pharmacists shall be allowed to sit for exams and register in the mainland.

In addition to joint venture law firms, Hong Kong lawyers, upon meeting certain qualification requirements, can apply to practice as lawyers in the mainland.

The new measures will take effect on Oct. 1, three months earlier than usual, to "allow the trade to enjoy the benefits earlier," Jiang said at the ceremony.

Donald Tsang welcomed the agreement, saying that the new measures will be mutually beneficial and help Hong Kong overcome the impacts of the ongoing economic downturn.

It is roughly estimated the service trade liberalization measures and the individual travel permit scheme under the CEPA agreements created 43,200 jobs from 2004 to 2008 in Hong Kong. The individual travel permit scheme alone contributed 58 billion HK dollars (7.4 billion U.S. dollars) of extra consumption in Hong Kong.

The CEPA measures, meanwhile, brought 46 billion HK dollars (5.9 billion U.S. dollars) of extra income to Hong Kong businesses providing services in the mainland and created 49,500 jobs in the mainland, Donald Tsang said at the ceremony.

Special Report: Global Financial Crisis

China's CPI down 1.5% in April; third fall in a row

2009-05-11T13:34:00.000-07:00

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¡¤CPI fell 1.5 percent year on year in April, It was third decline in a
row since February.
¡¤Food
prices, which comprise one-third of the CPI, dropped 1.3
percent.
¡¤The index
was down 0.2 percent from a month earlier.

BEIJING, May 11 (Xinhua) -- China's consumer price
index (CPI), the main gauge of inflation, fell 1.5 percent year on year in
April, the National Bureau of Statistics (NBS) said Monday.

It was the third decline in a row since February,
when the CPI dropped 1.6 percent, which in turn was the first fall since October
2002.

The result was in line with market expectations and
analyst forecasts.

People queue at a supermarket in
Qingdao, east China's Shandong Province April 16, 2009. (Xinhua/Li
Ziheng)
Photo
Gallery

Food prices, which comprise one-third of the CPI,
dropped 1.3 percent, dragged down by a 28.6-percent decline in pork prices as
demand plummeted amid a global flu outbreak thought to be connected with pigs.

Non-food prices fell 1.5 percent.

The index was down 0.2 percent from a month earlier, and the figure for January-April fell 0.8 percent from the same period last year.

Lian Ping, chief economist with the Bank of
Communications, said the weakening reflected the high base of comparison, since
the CPI soared by 8.5 percent last April. The consecutive declines did not
presage deflation, and the figure was expected to rise starting at mid-year.

China's producer price index (PPI), a major measure
of inflation at the wholesale level, fell 6.6 percent in April, the fourth
monthly decline in a row.

Li Huiyong, analyst with the Shenyin Wanguo
Securities said falling iron and steel prices pushed the PPI down.

However, Lian said the figure was expected to rise
from May forward, at least in month-on-month terms, as global commodity prices
had begun rising again amid signs of economic recovery.

Last month, domestic prices of copper, aluminum and
zinc rose by 10 percent to 20 percent on average. Oil product prices also edged
up.

The consecutive falls in the CPI and PPI aroused
concerns about deflation in the world's third-largest economy. But analysts said
that given the inflationary nature of the government stimulus package and the
massive expansion of bank credit in the first quarter, deflation was unlikely.

The country pumped 4.58 trillion yuan (670 billion
U.S. dollars) of new loans into the economy in the first quarter to stimulate
growth.

Lending in the early months of 2009 has already
neared the 5 trillion yuan of new loans targeted for the whole year. In March
alone, new loans increased by a record 1.89 trillion yuan.

The People's Bank of China (PBOC, the central bank)
said in its quarterly monetary policy report on May 5 that China would stick to
its moderately easy monetary policy and ensure "ample" liquidity at banks.

The State Information Center, a government think
tank, predicted in a report released on May 4 that the CPI would drop 1.3
percent in the second quarter.

One hundred economists polled by the China Economic
Monitoring Analysis Center under the NBS at the end of March expected the
figure for the whole year would range between 0 to 0.2 percent.

Deflation was unlikely, the survey found, considering
the ample bank liquidity and the moderating inflation comparison base in the
latter half of 2008.

Premier Wen Jiabao told the annual national
legislative meeting in the early March that the inflation target for this year
would be about 4 percent.

Xu lianzhong, official with the National Development
and Reform Commission, the top planning agency, told Xinhua that the CPI would
likely bottom out in the second quarter, so the possibility of further interest
rate cuts could not be ruled out.

China PPI down 6.6% in April year on
year

BEIJING, May 11 (Xinhua) -- China's producer price index
(PPI), a major measure of inflation at the wholesale level, fell 6.6 percent in
April year on year, the National Bureau of Statistics said on Monday. Full story

Power generation in China likely to
drop further in April

BEIJING, May 5 (Xinhua) -- China's power generation is
likely to have fallen 4 percent year on year in April, indicating an economic
recovery is still some way off, Tuesday's China Daily reported.

The estimated figure would signal a larger decline
than that in March, when power output fell 0.7 percent to 286.7 billion KWh, Xue
Jing, director of the statistics and information department under the China
Electricity Council told the paper. Full story

China's PMI of manufacturing sector
rises for 5th straight month

BEIJING, May 1 (Xinhua) -- The Purchasing Managers' Index
(PMI)of China's manufacturing sector rose for a fifth straight month in April to
53.5, up 1.1 points from a month earlier, the China Federation of Logistics and
Purchasing (CFLP) said Friday.

It was the second consecutive month the PMI rebounded
above 50 since July 2008, when the index fell to 48.4 percent.

A reading of above 50 suggests expansion, while one
below 50 indicates contraction. Full story

China's energy intensity down 2.9% in
Q1: statistics office

BEIJING, April 29 (Xinhua) -- China's energy intensity
dropped 2.89 percent in the first quarter, the National Bureau of Statistics
(NBS) reported Tuesday.

The decrease compared with 2.62 percent a year
earlier. Full story

Profits of China's central SOEs
decline in Q1, but more slowly

BEIJING, April 25 (Xinhua) -- Profits of companies
controlled by China's central government continued to fall in the first quarter
but at a slower pace, as the stimulus package showed positive effects on their
performance, the State-owned enterprise (SOE) watchdog said Friday.

The 138 SOEs directly controlled by the central
government, generated a profit of 119.49 billion yuan (17.57 billion U.S.
dollars) through January-March, down 41.8 percent year on year. The decline was
11.1 percentage points slower than the January-February figure, according to the
State-owned Assets Supervision and Administration Commission (SASAC). Full story

Special
Report:Global Financial
Crisis

China's producer prices down 6.6 pct in April

2009-05-11T13:33:00.001-07:00

BEIJING, May 11 (Xinhua) -- China's producer price
index (PPI), a major measure of inflation at the wholesale level, fell 6.6
percent in April year on year, the National Bureau of Statistics (NBS) announced Monday.

The decline compared with a 6.0-percent drop in March and 4.6-percent fall in the first quarter from the same period last year.

Prices of production materials fell 8.1 percent in April year on year, the NBS said in a statement.

The PPI for January-April fell 5.1 percent over the same period last year, it said.

The NBS also announced the consumer price index for April was down 1.5 percent year on year and 0.2 percent month on month.

Growth enterprise board may launch in October

2009-05-11T13:33:00.000-07:00

BEIJING, May 11 -- The country's long-awaited
NASDAQ-style second board could start around October with 40 listed firms, it
was suggested yesterday.

The opening of the second board, or growth enterprise
board (GEB), has been timed to coincide with the completion of the initial
public offering reform on the main board.

New listings were suspended in September last year
because of excessive pricing abuse and the China Securities Regulatory
Commission is drafting new rules to plug loopholes.

"We expect the new market regulations to be completed
in August, when we will begin explaining the requirements to intermediaries,
corporations and investors," Wang Wenli, a member of the Shenzhen Stock Exchange
(SSE), said.

The SSE released the draft listing regulations for
the GEB on Friday and has started soliciting public opinion.

"It will take two weeks to solicit opinion, then the
formal regulations can come out. The transaction regulations for the GEB can be
expected in two weeks, which will specify the capital threshold for investors,"
said Wang, who denied rumors the threshold could be as high as 300,000 yuan
($44,000).

"Based on research on the small and medium-sized
enterprises board, investors that are actively speculating usually have less
than 30,0000 yuan in capital. The 50,000-yuan threshold might be high enough to
avoid over-speculation."

Outstanding issues also include whether companies
listed can transfer to the main board or other markets when they meet
requirements.

Professionals who joined a forum to discuss the
proposals welcomed the efficient delisting scheme of the GEB and also suggested
shortening the lock-up period for shareholders to avoid speculation and
introducing a market-maker system to enhance the quality of information
disclosure.

(Source: China Daily)

Britain garment manufacturer moves operations to Cambodia

2009-05-11T13:32:00.001-07:00

PHNOM PENH, May 11 (Xinhua) -- A major garment manufacturer will move its product development center from the United Kingdom to Cambodia, a sign, according to some experts, that despite the effects of the economic crisis, the Cambodian garment sector continues to remain internationally competitive, local media reported on Monday.

Britain company New Island Clothing is setting up "a high level standards product development center," making the company one of the first to conduct the whole garment-production process -- from development to the placement of orders -- in Cambodia, New Island General Manager Kevin Plenty was quoted by the Cambodia Daily as saying.

The company, which has been in Cambodia for nine years and produces up to 75,000 men's shirts per week, had decided to set up the center here because it makes "the whole production process quicker for our customers," as the majority of materials come from the ASEAN region, said Plenty.

Kaing Monika, external affairs manager of the Garment Manufacturers Association in Cambodia (GMAC) said New Island's strategy showed the factory's "long-term vision and commitment in Cambodia," adding that most Cambodian factories only do "cut, make and trim" -- a production formula in which raw materials and designs are supplied and factories only really stitch the clothes together.

Tuomo Poutiainen, chief technical adviser for the International Labor Organization's garment sector program Better Factories Cambodia, said New Island's decision was "very positive for industry" and showed there was "enough confidence in the Cambodian garment sector to invest even in bad times."

Hundreds of factories have constituted the backbone of the garment sector of Cambodia, which used to generate above 70 percent of its total annual export volumes.

However, due to the global financial crisis and rising labor disputes, at least 60 garment factories have been closed and more than 50,000 garment workers lost their jobs since late 2008 and the sector's export volumes have also seen an obvious slide in the first quarter of this year.

But Plenty said he believed that the industry will see an economic turnaround within six months, and that he is not the only one within the garment industry to feel that way.

International trade fair opens in Pyongyang

2009-05-11T13:32:00.000-07:00

PYONGYANG, May 11 (Xinhua) -- The 12th Pyongyang Spring International Trade Fair opened at the Three Revolution Exhibition of Pyongyang on Monday, aimed at expanding economic exchange and cooperation with foreign countries.

More than 200 companies from 19 countries and regions, including China, Singapore, Switzerland, Russia, Italy, Australia and Vietnam, attended the four-day event.

Over 100 Chinese companies, mainly from China's northeastern Liaoning province, took part in the fair, which is scheduled to close on Thursday.

Items on display include electronic products, machines tools, vehicles, medicines and other commodities.

The annual Pyongyang Spring International Trade Fair is organized by the Korea International Exhibition Corporation, which also holds an annual autumn trade fair.

ROK finance minister cautious on economic recovery

2009-05-11T13:31:00.000-07:00

SEOUL, May 11 (Xinhua) -- The South Korean finance minister said Monday it is too early to be optimistic about economic recovery, citing a sluggish labor market and weak corporate investment.

Although the country has recently showed "glimmers of hope," such as record-high current account surplus in March and stabilizing stock and currency markets, it is too early to become optimistic about the outlook for the South Korean economy, Finance Minister Yoon Jeung-hyun told a conference in Seoul.

The minister made the remarks as optimistic views are raised over the nation's economy, with the current account hitting a record high of 6.6 billion U.S. dollars in March.

Yoon pointed to high unemployment, idling factories and sluggish corporate investment as factors that dragged the economy down.

"The government will continue its efforts to create 'business friendly environment' for local and foreign companies, including removing regulations that hinder their business, in order to promote corporate activities and revive the sluggish economy," the minister said.

Special Report: Global Financial Crisis

S Korean banks' corporate loan growth recovers in April

2009-05-11T13:30:00.001-07:00

SEOUL, May 11 (Xinhua) -- Growth of South Korean banks' lending to
companies restored in April thanks to government credit guarantees, the central
bank said Monday.

According to the Bank of Korea (BOK), local banks' outstanding loans to
companies stood at 472.4 trillion won (381.6 billion U.S. dollars), marking a
month-on-month increase of 3.22 trillion won (2.6 billion U.S. dollars).

The April rise compared with a 2.1 trillion-won (1.7 billion-U.S. dollar)
increase in March, the central bank said.

The rise in loan growth comes as bank loans to smaller companies picked up
with state-run agencies' providing loan guarantees, the BOK said.

Local banks' loans to smaller companies climbed by 3.2 trillion won (2.6
billion U.S. dollars) to come in at 412.3 trillion won (333.1 billion U.S.
dollars), while those to larger companies marked an increase of mere 19.1
billion won (15.4 million U.S. dollars) to reach 60.1 trillion won (48.5 billion
U.S. dollars, the BOK added.

The South Korean government has endeavored to help local lenders increase
loans to smaller firms by providing credit guarantees as lenders stayed
concerned over their financial health.

12th Pyongyang Spring Int'l Trade Fair opens

2009-05-11T13:30:00.000-07:00

Guests attend the opening ceremony for
the 12th Pyongyang Spring International Trade Fair in Pyongyang, May 11,
2009. Over 220 enterprises from 19 countries and regions attended the
fair, which is to be concluded on May 14. (Xinhua/Gao
Haorong)
Photo
Gallery

People visit the exhibition hall of the
12th Pyongyang Spring International Trade Fair in Pyongyang, May 11, 2009.
(Xinhua/Gao Haorong)
Photo
Gallery

S Korea's money supply growth stands at 3-month low in March

2009-05-11T13:29:00.001-07:00

SEOUL, May 11 (Xinhua) -- South Korea's money supply grew by the smallest
amount in three months in March with local banks remaining reluctant to extend
loans, the central bank said Monday.

The country's liquidity aggregate, which measures the nation's total
currency in circulation, stood at 2,340.9 trillion won (1.89 trillion U.S.
dollars) as of end-March, marking an on-year increase of 10.6 percent, the Bank
of Korea (BOK) said.

The March rise was a slow down from a 10.8 percent on-year increase of the
previous month, marking the slowest growth since December 2008, according to the
BOK.

"Slowing growth in the money supply in March came despite a large surplus
of the current account as local banks are cautious about extending credit to
households and firms," the BOK said.

S Korea sees increase in bond issuance in April

2009-05-11T13:29:00.000-07:00

SEOUL, May 11 (Xinhua) -- South Korea's bond issuance rose 14.2 percent last month from March as sales of treasuries and bonds by the central bank expanded, the nation's bourse operator said Monday.

The total bonds issued in the nation last month amounted to 65.06 trillion won (52.2 billion U.S. dollars), up from 56.98 trillion won (45.7 billion U.S. dollars), according to the Korea Exchange (KRX).

The April rise came as the Bank of Korea (BOK) sold massive amounts of bonds in a bid to absorb short-term funds from the market, according to the bourse operator.

The rise is also attributable to the government's increased sales of treasuries after it expanded its supplementary budget, the operator said.

The value of the nation's outstanding bonds came in at 948.69 trillion won (761.17 billion U.S. dollars) at the end of April, up 24.63 trillion won (19.76 billion U.S. dollars) from the previous month, it said.

Special Report: Global Financial Crisis

China's Q1 bilateral trade with three major partners fall

2009-05-11T13:28:00.002-07:00

BEIJING, May 11 (Xinhua) -- China's bilateral trade with the United States,
the European Union and Japan, its three major trade partners, continued to fall
in the first quarter, the General Administration of Customs said in a report on
Monday.

The bilateral trade volume between China and the U.S. dropped to 62.08
billion U.S. dollars in the first quarter, down 15.7 percent year on year.
Export volume to the U.S. declined to 25.52 billion dollars, falling 14.9
percent from the previous year.

China's trade surplus against the U.S. dropped to 28.96 billion dollars in
the first quarter, down 13 percent year on year.

In March, export to the U.S. contracted for the fifth month in a row to
16.45 billion dollars, but it was the first month-on-month growth since the
fourth quarter last year, according to the report.

The bilateral trade volume between China and the European Union slumped to
75.19 billion dollars, down 19.8 percent year on year. Export to the European
Union fell to 17.21 billion dollars, contracting by 20.2 percent year on year.

Germany, Netherlands and the U.K. ranked the top three among China's
European trade partners, with bilateral trade volume at 21.63 billion dollars,
8.07 billion dollars and 7.7 billion dollars, respectively.

China's trade volume with Japan slumped to 46.07 billion dollars, a drastic
year-on-year decrease of 23.8 percent, which was 4 and 8.1 percentage points
higher than decline of trade with the European Union and the United States.

China's food export back to growth in March

2009-05-11T13:28:00.001-07:00

BEIJING, May 11 (Xinhua) -- China's food export reached 2.62 billion U.S.
dollars in March, up 8.9 percent from a year earlier, presenting the first
year-on-year growth in the last five months, said General Administration of
Customs (GAC) here on Monday.

Export of fruit led the growth, rising 23.5 percent in March. Seafood was
up 16.2 percent year on year.

Food export totaled 7.17 U.S. dollars in the first quarter, down 5.5
percent year on year.

The country's food export had been falling since October 2008, affected by
the global financial crisis and the baby milk scandal that left six infants dead
and almost 300,000 ill, said the GAC in an online analysis on food export posted
on Monday.

The situation improved as governmental and industry efforts to strengthen
food safety supervision and expand export began to pay off, according the
analysis.

The overall demand for food was still there, said the GAC.

However, the shadow of the global economic downturn and concerns over food
safety could still be felt, reflected in the year-on-year drop of the food
exported such as vegetable and fruit juice, canned mushrooms, meat products and
live poultry, according to the administration.

Macao, mainland ink new deal to further strengthen trade ties

2009-05-11T13:28:00.000-07:00

MACAO, May 11 (Xinhua) -- The Chinese central government and the government
of the Macao Special Administrative Region (SAR) Monday signed a new deal based
on the existing trade agreements here, granting the SAR's service providers more
access to the mainland market.

The Supplement VI to the Mainland and Macao Closer Economic Partnership
Arrangement (CEPA6) was signed by Tam Pak Yuen, secretary for economy and
finance of the SAR government and the central government's Vice Minister of
Commerce Jiang Zengwei at a ceremony witnessed by the Macao SAR's Chief
Executive Ho Hau Wah.

Building on the liberalization of 18 services sectors, some 31 policy
measures will be introduced and one more sectors of research and development
will be opened by the mainland authorities to further facilitate market access
for Macao service providers and businessmen, according to the Supplement VI. As
a result, the total number of services sectors covered by the CEPA and its
supplements will be expanded to 41.

The new measures, which will take effect on October 1, 2009, mainly concern
industries such as tourism, MICE (Meeting, Incentive, Convention, Exhibition),
and medical services.

Under the Supplement VI, mainland travel agents authorized to operate group
tours to Taiwan can organize group tours for mainland residents to enter Macao
SAR in transit, which was aimed to help travel trade develop multi-destination
tourism packages.

As for the MICE industry, which is a prominent industry in the SAR's effort
to diversify its economy, service providers in the SAR will be allowed to
operate exhibitions through cross-border supply in major Chinese municipality,
such as Beijing, Tianjin and Chongqing, and provinces including Zhejing, Jiangsu
and Fujian, in addition to Guangdong province and Shanghai which has already
been opened to the SAR.

Meanwhile, Macao service providers and residents will also be allowed to
run health clinics and work as pharmacists respectively in the mainland, as long
as they acquire relevant licenses, according to the Supplement.

The CEPA between the mainland and the Macao SAR was firstly signed in 2003
and took effect in the following year, after which some six supplements to the
trade agreement have been signed so far, as a step-by-step effort to open the
mainland market to Macao. A similar trade agreement and supplements were also
signed between the central government and Hong Kong SAR.

AT&T to buy Verizon assets for $2.35 billion

2009-05-11T13:27:00.000-07:00

BEIJING, May 11 (Xinhuanet) -- ATT Inc. will buy assets of Verizon Wireless for 2.35 billion U.S. dollars in cash and will sell some Centennial Communications Corp assets to Verizon Wireless for 240 million dollars.

ATT said Friday it will gain network assets of Verizon Wireless in 79 mainly rural areas. It was required to dispose of some assets after it agreed to purchase Centennial Communications in November 2008.

Verizon Wireless will gain network assets and 120,000 subscribers in five areas. It was required to sell some overlapping assets after purchasing Alltel (NYSE: AT).

ATT said it expects the network integration costs to result in an earnings per share dilution of 0.06 dollar per share in the first year after closing, with additional planned capital investments of about 400 million dollar over 2009 and 2010.

The deal is expected to close in the fourth quarter of 2009, contingent on regulatory approval, ATT said.

"This transaction will complement our existing network coverage, particularly in rural areas," said Ralph de la Vega, president and chief executive of ATT Mobility and Consumer Markets in a statement.

Verizon now expects to buy former Centennial wireless properties, including licenses, network assets and nearly 120,000 subscribers in five service areas in Louisiana and Mississippi.

Verizon Wireless is owned by Verizon and Britain's Vodafone Group Plc (VOD.L) (VOD.N).

(Agencies)

China issues plan to support nonferrous metal industry

2009-05-11T13:26:00.001-07:00

Special Report:
Global Financial Crisis

BEIJING, May 11 (Xinhua) -- China released a detailed three-year plan to
stimulate its nonferrous metal industry focused on industrial restructuring and
technology innovation, the State Council, or the country's Cabinet, said here on
Monday.

The nonferrous metal sector should keep a steady operation in 2009, and
achieve a sustainable development by 2011, according to the plan.

The country would encourage regrouping among nonferrous metal companies to
sharpen the competitive edge of the whole industry, the plan said.

Three-to-five nonferrous metal corporation would be formed out of
industrial reconstructing by 2011 with advanced production capacity and
technology innovation capability.

Combined copper output of top 10 domestic producers should take up 90
percent of the country's total by 2011, aluminum output 70 percent, lead 60
percent, and zinc 60 percent, according to the State Council.

The government would also encourage the exploitation of nonferrous metals
both at home and abroad, supporting companies to invest in mines overseas --
either on their own or with foreign parties.

The country would help with capital injection and foreign reserve
application concerning overseas projects.

The export rebate policy would be a "proper" and "flexible" one to
encourage nonferrous products with high technology and high added values,
according to the plan.

The State Council also laid out guidelines to eliminate obsolete capacity
and digest over capacity. No new project to develop electrolytic aluminum will
be allowed in the next three years, the plan said.

The country would put strict control on the production of copper, lead,
zinc, titanium and magnesium.

At the same time, China aims to save 1.7 million tonnes of coal and 6
billion KWh of electricity per year, as well as reduce sulfur dioxide by 850,000
tonnes annually as part of industrial upgrading for the nonferrous metallurgy
sector.

China was the largest producer and consumer of nonferrous metals with total
output of ten major nonferrous metals reaching 25.2 million tonnes and total
consumption at 25.17 million tonnes in 2008.

The country's nonferrous metal industry received a severe blow from the
global economic downturn after keeping high-speed growth for nearly a decade.

Statistics released by the China Nonferrous Metals Industry Association
showed aggregate profit of China's nonferrous metal producers fell 45 percent
last year to 80 billion yuan (11.73 billion U.S. dollars).

Along with the support plan for the nonferrous metal sector, the State
Council has unveiled stimulus packages for 10 industries since January, such as
machinery-manufacturing, electronics and information industries, the light
industry and petrochemical sectors.

China announces stimulus plans for
nonferrous metals, logistics

BEIJING, Feb. 25 (Xinhua) -- China's State Council on
Wednesday announced support plans for the country's nonferrous metals and
logistics sectors.

Presided over by Premier Wen Jiabao, Cabinet members
agreed to promote company restructuring and will offer subsidized loans to
support technical innovations within the nonferrous metals sector. Full story

China unveils stimulus package for
light industry, petrochemical sector

BEIJING, Feb. 19 (Xinhua) -- The State Council, or China's
Cabinet, announced plans to boost the country's light industry and petrochemical
sectors in a bid to stimulate the economy.

The country will lift processing trade restrictions
on some labor-intensive, technology-intensive, energy-efficient, and
environment-friendly products, according to an executive meeting of the State
Council on Thursday. Full story

China approves support plan for
electronics and information industry

BEIJING, Feb. 18 (Xinhua) -- China approved Wednesday a
support plan for the country's electronics and information industry. The
government will boost innovation, increase financial input and promote the use
of information technologies in various fields in the next three years, according
to an executive meeting of the State Council, or the Cabinet. The meeting was
chaired by Premier Wen Jiabao. Full story

China approves stimulus plan for ship
building industry

BEIJING, Feb. 11 (Xinhua) -- China's State Council, or
Cabinet, adopted a stimulus plan Wednesday for the shipbuilding industry at an
executive meeting chaired by Premier Wen Jiabao.The meeting said
shipbuilding is a modern, comprehensive industry that provides technical
equipment for transportation, maritime development and national defense.
Supporting shipbuilders would also help other sectors, including steel,
chemicals, textiles, light industry, equipment manufacturing and information
technology, it said. Full story

China unveils support package to auto,
steel industries

BEIJING, Jan. 14 (Xinhua) -- China's State Council
unveiled a long-awaited support package for the auto and steel sectors Wednesday
to boost the two "pillar industries".Under the plan, the government will
lower the purchase tax on cars under 1.6 liters from 10 percent to 5 percent
from Jan. 20 to Dec. 31 in a bid to stimulate sales. Full story

China's parliamentary sessions to focus on economic
downturn

BEIJING, Feb. 23 (Xinhua) -- As the global downturn
continues to take its toll on China's economy, responses to the turmoil will be
high on the agenda of lawmakers and political advisors who are scheduled to
gather here early next month for their annual full sessions. Full story

Special Report: China unveils stimulus package for 10
sectors

Hong Kong close 1.74% lower on profit-taking

2009-05-11T13:26:00.000-07:00

Special Report:
Global Financial Crisis

HONG KONG, May 11 (Xinhua) -- Hong Kong stocks shed 301.92 points, or 1.74
percent to close at 17,087.95 at the end of Monday trading, as investors rushed
to take profit gained during the seven-day rally starting on April 30.

The benchmark Hang Seng Index opened slightly lower at 17,381 and advanced
to the day high of 17,685.64 before moving downward to the day low of 17,032.44.
The market retrieved some ground upon closing.

Market turnover expanded to 92.13 billion HK dollars (11.90 billion U.S.
dollars), from Friday's 86.77 billion HK dollars (11.21 billion U.S. dollars).

Analysts say the market could face further consolidation as economic
fundamentals are not good enough to support the current market level.

Aside from profit-taking, the Hong Kong market was thought to be dragged
down by China's mainland bourses, which moved into negative territory after days
of considerable gains.

The Chinese government said the country's main inflation index fell 1.5
percent year-on-year in April, a result much better than anticipated.

However, the good news seemed unable to lend any momentum to the retreating
stock market, with the Shanghai Composite down 1.8 percent and the Shenzhen
Component Index down 3.09 percent.

Heavyweight HSBC gained 0.3 percent to 66.1 HK dollars, among other
constituents that defied the down trend.

China Mobile dropped 1.2 percent to 75.3 HK dollars and another telecom
service provider China Unicom rose 0.11 percent to 9.25 HK dollars.

Shoe maker Yue Yuen plunged 7.2 percent to 16.07 HK dollars after news that
the company would be kicked out of the Hang Seng Index and replaced by
electricity producer China Resources Power Holdings on June 8.

Financial stocks fell cross the board. China's biggest lender ICBC slid 1.9
percent to 4.71 HK dollars, Bank of China lost 2.37 percent to 2.88 HK dollars
and Bank of Construction fell 6.7 percent on concerns Bank of America will sell
shares in the company.

The property sector was also down. Henderson Land 5.2 percent to 37.6 HK
dollars, Cheung Kong down 1.8 percent and New World Development down 2.1.

Utilities stocks failed to buckle the market fall, with HK Electric down
0.71 percent and MTR Corporation down 5.37 percent. (7.7420 HK dollars = 1 US
dollar)

China's new bank loans fall in April

2009-05-11T13:25:00.001-07:00

BEIJING, May 11 (Xinhua) -- China's bank credits fell considerably in April
after staying above 1 trillion yuan for three straight months, with
yuan-denominated new loans standing at 591.8 billion yuan (about 86.65 billion
U.S. dollars), the People's Bank of China (PBOC) said here Monday.

It brings outstanding loans in financial institutions up 29.72 percent to
35.55 trillion yuan by the end of April.

The loan increase in April was less drastic than in the first quarter,
which was largely in line with market forecasts.

The country has pumped 4.58 trillion yuan (670 billion U.S. dollars) of new
loans into the economy in the first quarter to stimulate growth.

The figure is already nearing 5 trillion yuan of new loans targeted for the
whole year. In March alone, new loans increased by a record 1.89 trillion yuan.

The reminbi deposit increased by 1.03 trillion yuan in April, making the
outstanding deposit 53.29 trillion yuan, up 26.21 percent.

In the first-quarter monetary policy report released earlier this month,
the central bank said it would continue to instruct financial institutions to
extend new loans, despite the earlier surge.

Ding Zhijie, deputy director of the Finance Institute of the University of
International Business and Economics, estimated that loan increases would
further slow down in the second quarter, but the liquidity would remain
abundant.

In the upcoming months, new bank loans should keep growing by 400 to 500
billion yuan per month, estimated Liu Yuhui, an economist with Chinese Academy
of Social Sciences (CASS).

The new loans this year would reach about 9 trillion yuan, said Liu.

The broad money supply, M2, gained 25.95 percent to 54.05 trillion yuan at
April end from a year earlier, said the bank.

M1, the narrowest measure of money supply that includes cash in circulation
plus corporate current deposits, reached 17.82 trillion yuan, up 17.48 percent.

The lasting growth in M1 showed more loans are entering real economy,
making the economy more active, experts said.

But the gap between M1 and M2 remained high, suggesting that a considerable
amount of savings was still locked up in fixed deposits, instead of flowing into
the economy.

China's new loan growth may decline in
April

BEIJING, May 5 (Xinhua) -- Credit extended by China's
banks in April may have dropped to above 600 billion yuan (about 87.85 billion
U.S. dollars) after staying at above 1 trillion yuan for three straight months,
industry insiders said.

Despite the sharp month-on-month decline, the scale and
growth of the April new loans was "more reasonable" than that in the first three
months this year, said Tuesday's China Securities Journal, citing unidentified
sources with banks. Full story

Banking regulator says government new
loans not limited to 5 trillion yuan

BOAO, Hainan, April 18 (Xinhua) -- China's banking
regulator said Saturday the government's target of new loans this year is not
limited to 5 trillion yuan (735.3 billion U.S. dollars), and all funds should
help keep the sustainable and rapid development of the economy.

Liu Mingkang, chairman of the China Banking Regulatory
Commission, made the remarks at a panel discussion of the Boao Forum for Asia
(BFA). Full story

China's new yuan loans
surge

BEIJING, April 17 -- The explosive credit growth over the
past few months has propped up the sagging economy, but it may also plant the
seed for an asset price bubble and inflation, according to experts.

"The positive news for the first quarter is the strong
loan growth," Wang Tao, head of China Economic Research with UBS Securities,
said at a forum on Wednesday. "It is a sign that China's growth relies more on
credit rather than fiscal stimulus." Full story

China's new yuan loans hit 1.3 trln
yuan in March

BEIJING, April 3 -- China's new yuan loans amounted to 1.3
trillion yuan in March as the country continued to pump in massive liquidity
into the economy to battle impacts of the global financial crisis, a source
close to the matter told China Daily.

A report by Caijing magazine on Tuesday said new yuan
loans extended by the Industrial and Commercial Bank of China, China
Construction Bank, Bank of China and the Bank of Communications exceeded 800
billion yuan in March. Full story

Chinese shares end seven days gains, decline on economic data release

2009-05-11T13:25:00.000-07:00

Special Report:
Global Financial Crisis

BEIJING, May 11 (Xinhua) -- After rising for seven consecutive trading days, Chinese shares declined 1.75 percent on Monday as caution returned upon the release of official economic statistics.

The benchmark Shanghai Composite Index declined 1.75 percent, or 45.9 points, to close at 2579.75. The Shenzhen Component Index dropped 3.09 percent, or 314.27 points, to 9868.79.

Encouraged by a Wall Street rally on Friday, shares on both bourses opened higher and hit record highs of 2,663 and 10,347 points in the morning, but went lower despite the strong performance of blue-chip stocks.

China's consumer price index (CPI) and producer price index (PPI), the main gauge of inflation at retail and wholesale level, fell 1.5 percent and 6.6 percent, respectively, year on year in April, the National Bureau of Statistics said Monday.

The result was largely in line with market expectations and analysts' forecasts, but it still triggered profit-taking activities when investors sought ways to relieve the pressure building from previous gains, said analysts.

Qi Jingmei, senior economist of State Information Center, said the fall of CPI and PPI, which might have reflected slack in both demand and supply, would dampen the optimism of many investors.

Coal, oil and alternative energy shares led the fall. Gansu Jingyuan Coal Industry Electricity Power Co. plunged 9.96 percent to 12.65 yuan, and Huayi Electric Company slid 8.21 percent to 15.31 yuan.

Gold shares followed, with Zhenzhou Mining Group Co. down 6.21 percent to 15.7 yuan, and Zhongjin Gold Corp. losing 5.63 percent to 60.01 yuan.

Financial shares managed to have a relatively better performance despite the overall market fall. The Bank of Communications closed up 1.11 percent to 7.3 yuan, while Shanghai Pudong Development Bank, China Minsheng Banking Corp. and Bank of Beijing all reported gains.

After the first swine flu case was confirmed on Chinese mainland, when a 30-year-old Chinese mainland male was tested positive for the A/H1N1 influenza, medical-related shares prospered. The sector had suffered strong sell-off pressure through last week.

Guilin Layn Natural Ingredients Corp. rose to the daily limit of 10 percent to 19.9 yuan, and Daan Gene Co. was up 10 percent to12.43 yuan.

Losers outnumbered gainers by 754 to 100 in Shanghai, and 645 to 72 in Shenzhen.

Combined turnover expanded to 264.4 billion yuan (38.88 billion U.S. dollars) from 244.3 billion yuan last Friday.

China's CPI down 1.5% in April; third
fall in a row

BEIJING, May 11 (Xinhua) -- China's consumer price
index (CPI), the main gauge of inflation, fell 1.5 percent year on year in
April, the National Bureau of Statistics (NBS) said Monday.

It was the third decline in a row since February, when the
CPI dropped 1.6 percent, which in turn was the first fall since October 2002. Full story

Steel deal shows Australian firms competitive, PM says

2009-05-11T13:24:00.001-07:00

CANBERRA, May 11 (Xinhua) -- Australian Prime Minister Kevin Rudd said on Monday that the awarding of a 20 million Australian dollars (14.6 million U.S. dollars) destroyer contract to BlueScope Steel showed Australian companies can win defense contracts against the world's best.

"This is a great achievement. It shows not only can Australian companies compete on defense projects with the best in the world, they can win and win on their merits," Rudd said in a statement.

Asked if the planned emissions trading scheme would affect BlueScope, Rudd said the company had indicated it welcomed the government's announcement of a slower start to the scheme, which was now due to start in July 2011 instead of a year earlier.

"The government has great confidence in the industry's future and the company's future," Rudd was quoted by the Australian Associated Press as saying.

Rudd said he was confident Australian companies would be heavily involved in the 8 billion Australian dollars (6.13 billion U.S. dollars) destroyer project.

"I'm confident there's going to be maximum delivery of Australian project content," Rudd said.

Rudd announced on Monday morning that Bluescope Steel had won the contract to supply steel for the Australian navy's three new air warfare destroyers.

The contract will run over six years with BlueScope Steel to produce around 3,000 tonnes of steel per ship.

BlueScope Steel is a flat product steel producer with operations in Australia, New Zealand, Asia, the Pacific and North America.

Special Report: Global Financial Crisis

Australia is not the only nation in deficit: PM

2009-05-11T13:24:00.000-07:00

CANBERRA, May 11 (Xinhua) -- Australia was not the only nation that fell into deficit due to the global financial crisis, Prime Minister Kevin Rudd said on Monday.

"There is a global recession. Every government around the world is engaged in temporary borrowings for temporary deficits in order to plug the gap which has been left by a private sector in retreat, and to do so temporarily," Rudd told reporters in the New South Wales city of Wollongong.

According to the Australian Associated Press, the federal budget, due to be handed down on Tuesday, has been expected to include a deficit of at least 60 billion Australian dollars (40 billion U.S. dollars) for 2009/10.

Special Report: Global Financial Crisis

BlueScope Steel Australia awarded navy contract

2009-05-11T08:53:00.000-07:00

CANBERRA, May 11 (Xinhua) -- Australian Prime Minister Kevin Rudd announced on Monday that Australia's steel producer BlueScope Steel was awarded a 20 million Australian dollars (14.6 million U.S. dollars) contract to supply steel for Australia's three new navy air warfare destroyers.

"This is a great achievement. Australian steel for Australian ships for Australian defence, that's what we're here today to celebrate," Rudd told reporters.

According to the Australian Associated Press, the contract will run over six years with BlueScope Steel to produce around 3,000 tonnes of steel per ship.

"Through this new contract they (BlueScope) will support jobs for Australian workers and flow-on economic benefits for their communities," Rudd said.

Rudd said the 8 billion Australian dollars (6 billion U.S. dollars) project would see the first of the three ships delivered in 2014, the largest defence project in Australia's history.

BlueScope Steel is a flat product steel producer with operations in Australia, New Zealand, Asia, the Pacific and North America.

Global financial crisis produces huge negative impacts on Nigeria's economy

2009-05-10T13:54:00.000-07:00

Special Report:Global Financial Crisis

By Gladys Nyong, Li Huailin

LAOGS, March 5 (Xinhua) -- The global financial crisis is now anon-issue to the Central Bank of Nigeria governor Charles Chukwuma Soludo even he insisted that the impact of the looming crisis was very little to Nigeria's economy.

For him, the country's financial system had shock absorbers to cushion the external shocks.

The CBN governor prided the country's capital adequacy which is put at 22 percent against 10 percent capital adequacy ratio of foreign banks. As recession set in, presenting itself in low sales, business closures, foreign investment down turns, low stock prices in the nation's economy, he set in monetary policy that would allow more money to circulate and banks would access funds anytime they have the need.

Soludo had highlighted that other central banks had pumped in over 3.3 trillion U.S. dollars into various economies. The CBN governor had reduced liquidity ratio of banks from 40 percent in August 2008 to 30 percent.

This freed about 1.7 trillion naria (11.4 billion U.S. dollars)for banks' use in increasing their liquidity. Bank's aggregate capital base hit 9 trillion naira (30.4 billion dollars) toward the end of that year but that measure could not stop the deepening recession that had set in.

The fall in the price of crude oil which hovers above 30 dollars per barrel and above represent over 70 percent fall from its high peak price by July last year.

A review of the effects of the global financial crisis in various sectors will give a clearer picture of the challenges the country is facing.

Stock Market:

The Nigerian stock market had experienced boom in 2006 and 2007 with investors profiting from their investment in the market.

Bank shares and other penny stocks had gained value far above their initial offer price. Banks even sold initial public offers and offer for subscription of shares on credit to investors and recouping their debts on the monthly salaries of workers. But the global financial crisis saw shares tumbling down by over 50 percent loss.

Zenith banks' shares, for instance, that was 34 naira (0.23 dollar) by 2007, was now 15 (0.1 dollar) naira as on March 2. The recession has caused foreign investors to sell their shares and transfer the funds to resuscitate their own ailing economies. Share capitalization that over 10 trillion naira (67.1 billion dollars) is down to 5.323 trillion naira (35.7 billion dollars).

The CEO of financial Derivatives Bismark Rewane had predicted that Nigerian banks may be susceptible to the global financial crisis if oil prices continued to dwindle.

A business trader laments on how he invested about 5 million naira (33,550 dollars) in the stock market and the stock value have gone down to barely 250,000 naira (1,677 dollars).

Most investors have similar woes but some stock market experts think that now that share prices are low, this is the time to buy stocks when the market is bearish.

Investment and Employment:

Apart from foreign direct investment which has dwindled, local investment and production are suffering. In February, Paterson Zochonis and Unilever, major toiletries manufacturers of Joy toilet soap and close-up tooth paste, announced their intention to pack up business operations in Nigeria.

The company's staff strength is over 5,000. Dunlop Nigeria plc, Manufacturers of tyres also closed shop this year due to losses in billions of naira in operations.

Organizations are abundantly shedding staff, especially in the financial sector, to effectively utilize shareholders' funds.

On Feb. 26, Nigeria's minister of labor and productivity Adetokumbo Kayode said that about 40 million Nigerians, mostly between the age of 18 and 25, are jobless.

According to the minister, the World Bank presented the figure to the Nigerian federal government.

Project Financing

The federal government over the years spends two thirds of its revenue on recurrent expenditure (salaries of government officials and agencies). This leaves about a third to project development and infrastructure.

The government had bench marked the price of crude oil at a reference price of 65 dollars per barrel and had to review it to 45 dollars per barrel for 2009 fiscal year.

With the price of crude oil going down to about 35 dollars per barrel it leaves the government project financing at a limbo. The federal government has a deficit financing of 1.9 trillion naira (12.7 billion dollars) for 2009, built into its budget.

Former Minister for Finance Shamsudeen Usman said Nigeria needs between 40 billion and 60 billion dollars to fund major infrastructure.

It expects to get this through a 500 million dollar Sovereign Bond issue and Public Private Partnership (PPP) to develop major road infrastructure.

So it is very hard for the Nigerian government to spare funds for major infrastructural projects.

EAC central bankers warn of severer impact of financial crisis

2009-05-10T13:53:00.000-07:00

Special Report:Global Financial Crisis

DAR ES SALAAM, March 5 (Xinhua) -- Central bank governors from Kenya,
Tanzania and Uganda have cautioned that severer impact of the global financial
crisis would be felt by East Africa that had minimum impact from the first-round
effects.

The warning was sounded when the central bank governors met on Wednesday in
Arusha of northern Tanzania to discuss ways to deal with the ongoing financial
crisis and its yet-to-be-felt adverse impact on the region.

Kenya, Tanzania and Uganda are member states of the East African Community
(EAC) which also includes Burundi and Rwanda.

The central bank governors made it clear in their papers delivered to a
special one-day economic crisis conference that 2009 would be the toughest year
for the region, according to reports reaching here on Thursday.

"As the global economy sinks into depression," said Bank of Tanzania
Governor Benno Ndulu, "prices of key export commodities are bound to fall
further as consumer demand in advanced countries continue to decline."

The central bank governors met just ahead of a scheduled continental
conference for finance ministers and central bank governors to be held in Dar es
Salaam later this month. The conference, co-organized by the International
Monetary Fund and the government of Tanzania, is to discuss the global financial
crisis and its impact on Africa.

US, China economic projects to increase international copper demand

2009-05-10T13:52:00.000-07:00

Special Report:Global Financial Crisis

LUSAKA, March 4 (Xinhua) -- Zambia's Standard Chartered Bank has said the stimulus package in the United States and China will increase demand for copper and prices should appreciate, Zambia Daily Mail reported on Wednesday.

The 787 billion U.S. dollars stimulus package in the United States will include expenditure on copper-intensive projects such as public transport and school buildings while China has a stimulus package of 568 billion dollars to boost the infrastructure market, which is copper-intensive, the newspaper said.

Meanwhile, the bank has increased its consumer banking deposit book to over 1.2 trillion kwacha (about 220 million U.S. dollars) as at December 2008 following the successful "Bank a Ride" campaign embarked on last year.

The bank's managing director Mizinga Melu said the campaign was aimed at increasing deposits and rewarding existing customers.

Melu said the campaign allowed the bank to remain open for business and focus on continued lending coupled with product innovation and better service delivery.

"Whilst it is generally accepted that the economic environment in Zambia, like the rest of the world, is highly challenging to most businesses. We remain confident in the economic prosperity of this country," she said.

She said copper prices were expected to rebound this year as demand increases with a weakening US dollar, adding that in China, wire and cable manufacturers were reported to have increased production in recent weeks with usage rates now running at 90 percent.

"Standard Chartered Bank continues to believe that demand will be a key driver for copper demand in the months ahead," she said.

"In the short-term, we forecast that demand for copper will remain fairly weak with prices averaging between 3,200 and 3,600 U.S. dollars per tonne. Experts say the year end closing price will be just above 3,700 dollars," she said.¡¡

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