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India, Iran to boost bilateral trade to USD25b

by on March 11, 2012

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(MENAFN) The Indian Commerce Ministry said that during the coming 4 years, India and Iran plan to boost annual bilateral trade to USD25 billion, reported Tehran Times. The ministry added that …

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India, Iran to boost bilateral trade to USD25b

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China’s H1 trade surplus down to 1.44% of GDP

by on August 24, 2011

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(MENAFN) China’s Ministry of Commerce said that in 2011′s first six months the country’s trade surplus dropped to 1.44 percent of gross domestic product (GDP) from 2.2 percent in 2010, reported …

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China’s H1 trade surplus down to 1.44% of GDP

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Greek Protestors Take Over Finance Ministry

June 3, 2011

(AP) ATHENS, Greece — Protesters took over the Finance Ministry building in Athens Friday morning, hanging a giant banner from the roof calling for a general strike, just as Greece wraps up tough negotiations with international officials on new austerity measures. About 200 protesters from the communist party-backed PAME union blockaded the entrance to the ministry from dawn, preventing employees from entering. They hung a banner over five stories of the front of the building and took down the European flag from the top of the ministry, replacing it with their own union flag. They said they would continue the blockade for the entire day. Ministry staff were working from a separate building, an official said. The protest came as experts from the European Union, European Central Bank and International Monetary Fund were wrapping up a review of Greece’s implementation of economic reforms in return for euro110 billion ($159.06 billion) in rescue loans from the EU and IMF. The three bodies, known collectively as the troika, were to issue a statement on their review later Friday, officials said. The review is crucial towards determining whether Greece will receive a fifth tranche, worth euro12 billion, of bailout loans agreed last year. Greece has so far received euro53 billion from its rescue deal since it first started tapping into the bailout package in May 2010. Prime Minister George Papandreou was heading to Luxembourg later Friday for emergency talks with Jean-Claude Juncker, who is head of the group of 17 eurozone finance ministers as well as Luxembourg’s prime minister. Juncker recently criticized Greece for being slow in cutting debt and reforming the public sector. Greek officials were also completing tough negotiations on the details of more austerity measures needed to ensure the country can avoid defaulting on its debts. The original bailout plan envisaged the country being able to tap bond investors next year, but with the interest rates on Greek bonds remaining exceptionally high, that appears increasingly unlikely. Last month, Finance Minister George Papaconstantinou announced remedial austerity measures worth about euro6.4 billion for this year, in order to meet the target of reducing the deficit to 7.5 percent of gross domestic product, from 10.5 percent in 2010. While euro4.8 billion of that amount has already been announced, the government was expected to outline details of the remaining euro1.6 billion in the coming days. It is also expected to give details of a 2012-15 midterm austerity program, with the details to be announced after a Cabinet meeting in the coming days, officials said. The new cutbacks will also have to be ratified in parliament, where the governing Socialists have a six-seat majority. But several Socialist backbenchers have voiced strong criticism, and the government this week canceled two planned briefings of its deputies to avoid a showdown. Sixteen Socialist lawmakers have signed a letter calling for an extensive debate on the proposed new cutbacks before their ratification, with one of the signatories threatening on Friday not to vote for the reforms. “If the draft legislation is brought to Parliament without prior discussion, I will not vote for it,” Thomas Robopoulos told state NET television. Greece’s woes have been compounded by repeated downgrades of its credit ratings – Moody’s warned Wednesday that the country had a 50-50 chance of defaulting on its debts. On Friday, Moody’s also cut the ratings of eight Greek banks – National Bank of Greece, Eurobank, Alpha, Piraeus, Agricultural Bank of Greece, Attica, Emporiki and General Bank of Greece. The agency said “the rising likelihood of a sovereign debt restructuring” could directly affect Greek banks by reducing the value of the government bonds they hold as well as eroding their funding sources. ____ Nicholas Paphitis in Athens contributed.

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Japan’s Prices Rise For First Time In Two Years

May 27, 2011

TOKYO — Japan’s consumer prices in April rose for the first time in more than two years on a spike in energy and tobacco prices, the government said Friday. Japan’s core consumer price index, which excludes fresh food, climbed 0.6 percent last month from a year earlier, marking the first year-on-year increase since December 2008, the Ministry of Internal Affairs and Communications said. The rise in Japanese consumer prices was mainly due to a jump in gasoline and tobacco prices. The ministry said education costs were also higher in April. On a month-on-month basis, Japan’s core consumer price index was up 0.4 percent last month. But economist Hiroshi Watanabe at the Daiwa Institute of Research said the April increase in consumer prices does not mean Japan’s economy has emerged from deflation. “The April results were mainly lifted by temporary factors, such as a surge in tobacco prices. Overall, Japan’s economy still remains under deflationary pressure as the economy has yet to post a steady recovery,” he said. The world’s No. 3 economy has been battling periods of deflation – or a steady decline in prices – since the 1990s. Deflation is a burden as it can hamper economic growth by depressing company profits, sparking wage cuts and causing consumers to postpone purchases. It also can increase debt burdens. Faced with tumbling output and exports following the March 11 earthquake and tsunami, Japan’s economy recently slipped into a recession after contracting at an annualized rate of 3.7 percent in the January-March quarter.

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Cuba To Drill For Oil In Gulf

April 5, 2011

HAVANA — Cuba and partner companies will begin drilling five oil wells in the Gulf of Mexico this summer in hopes of locating enough crude to justify the costly exploration, an official said Tuesday. “The prospects are very promising” of finding valuable reserves, said Manuel Marrero, an official with the Ministry of Basic Industry. Cuba’s domestic production is exclusively heavy oil with a high sulfur content. Its offshore Gulf waters could contain large quantities of lighter, sweet crude, although a test well in 2004 turned up only modest deposits. Studies since then have pointed to “oil traps” in the marine floor, persuading partner companies to take on the expensive task of exploration in deep water, Marrero said during an earth sciences convention. The drilling is expected to run through 2013. The Cuban government has designated 59 blocks in Gulf waters encompassing 43,200 square miles (112,000 square kilometers) where private energy companies have said they could drill deep-water test wells. The area opened for international investment in 2000, and currently a half-dozen companies, including Spain’s Repsol-YPF, have contracted for 22 of the blocks. None of the companies are American – due to Washington’s decades-old ban of U.S. business dealings with the communist-governed island – although some U.S. firms have expressed interest in the past. Marrero repeated Cuba’s position that it would be open to partnering with U.S. companies. “Any company could participate under Cuban laws,” Marrero said. Earlier this year, Brazilian officials announced that country’s state-run energy giant, Petrobras, would withdraw from the Cuban area. “They had a small block, barely 1,500 square kilometers,” Marrero said. “They discovered prospects, but that can’t compete with the hundreds of prospects they have” in Brazilian territory. According to geologic studies conducted by several institutions, some of them U.S.-based, Cuba’s Gulf reserves could be 5 billion to 9 billion barrels of crude. Nearly a year after the Deepwater Horizon disaster that killed 11 workers and led to more than 200 million gallons of oil spewing from a BP well a mile beneath the Gulf of Mexico, Marrero assured reporters that Cuba’s exploration will be carried out safely. “The equipment that will be used is the most modern, the safest. The regulatory framework is very strict, and the companies that will drill are prestigious and experienced,” he said. “I don’t think we are going to have any more risks.” Earlier this year, Cuba reported its 2010 production totaled 4 million tons of petroleum equivalent – oil plus natural gas – or about 46 percent of its domestic consumption. The rest it obtains from Venezuela on preferential terms.

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David Nordfors: The "Innovation for Jobs" Chasm

April 4, 2011

“Innovation for jobs” is hamstrung by silos in governments and media, say Sven Otto Littorin , Swedish Minister for Employment 2006-2010, and David Nordfors , co-founder of the Stanford University Center for Innovation and Communication, suggesting principles for a Competitive Democracy. Sweden handled the latest financial crisis better than most nations. Its growth rate is among the OECD’s highest, the budget deficit should become a surplus in 2011, and unemployment is declining to 5%. What does the Swedish example show us, and what lies ahead? Sweden combined fiscal prudence with labor activism. The economy would have fared even better had labor and innovation policies meshed. Politicians have started to discuss innovation as a job creator. This is logical. Innovation is the main driver of economic growth. But are countries organized to do anything about it? We think not. All mature economies have ageing populations. Labor markets are growing too slowly to cope with future challenges. Governments face the same dilemma as households: cut spending or raise income. How should governments help people create wealth for each other? For laymen, this is a relatively easy question. For experts, it is complex and delicate. The simple solution: everyone, of any age or health, can create value for others. We ‘only’ need an economy that permits it. The complex solution: today, many people able and willing to create value cannot enter the labor market because the economy is not organized to include them. The resources and the system are mismatched. Resources must be identified; systems, business models and policies must be designed to use them. Old best practices and policies may be enablers or obstacles. Each mechanism for creating or distributing value involves an ecology of stakeholders who resist change. So it is as vital to unleash human resources excluded from the economy as it is to innovate — the process of turning ideas into new value in the market. Introducing new value will always be challenged by powerful stakeholders. Countries are struggling to implement major, politically difficult reforms to increase their labor pools. After the 2006 election, the Swedish government introduced a system of earned tax credits. The unemployment-insurance and social-security systems were reformed to get people back to work. In the late 1990s, major pension reform helped to increase the number of older people in the labor market. These reforms were controversial. Reforms are rarely introduced in good economic times, as it is hard to find public support for their perceived negative social consequences. In bad economic times, governments must solve other, short-term problems. Most countries that introduce reforms have experienced the same public reactions: demonstrations, labor-market conflicts, poor opinion polls and final election defeat. Sweden’s lesson is two-fold: reforms work, and work even better if introduced early in the election cycle. But reforms to increase labor supply are not enough. Economic theory shows that long-term growth is determined largely by technological improvements and innovation. The core questions: can innovation-driven productivity growth be diverted into job growth? What policies can make this happen? What are the long-term effects on growth and prosperity, and on government finances? We believe that a main reason for the lack of sufficient benefits from innovation lies in failing institutions and how we organize innovation policies. It’s a structural issue. Politics is governed vertically; departments and ministries are often separate and in most countries budgeting is the only horizontal governmental process. Yet even the budget process is vertical, as ministries depend on the Ministry of Finance for funds. In many countries innovation policies are lost between these vertical ministries. In some cases, innovation policies are seen as a part of the Ministry of Education but are lost in the academic maze. In other countries, innovation strategies belong in the Ministry for Industry, which often faces more important short-term issues. In both cases, theories on how and why innovations evolve have become more important than their effect on growth and their political impact. Labor-market policies, in turn, deal with increasing labor supply in good times and handling hordes of unemployed in bad times. Nowhere have innovation policies become integral to fighting unemployment and exclusion from the labor market. Unfortunately, journalism has the same vertical structure as politics. Journalists covering labor markets rarely cover innovation, and vice-versa. Verticals in politics and journalism reinforce each other, making it harder to bridge innovation and labor markets for the common good. Without horizontal political debate and enlightened journalism to create bridges, innovation has become too academic and theoretical. Building models to understand technological growth has come to overshadow its importance for economic growth. Innovation policies must be integral to job creation. Today, little collective knowledge exists on how to do so, what policy reforms can do or how decision-making is affected in our respective countries. Combining innovation and labor policies is a complex issue, an open-ended challenge, with no clear definitions or solutions. Finding the right questions is as difficult as finding suitable answers. Therefore, any decision-making system that postulates solutions to these unfamiliar problems, tailored by and for existing silos, executing these solutions linearly top-down, will most probably be ramming square pegs in through one ear and out through the other. Policy makers must interface specialized knowledge with broader perspectives, mix disciplines and bridge cultures. The challenge is similar to modern innovative product design, continously defining, researching, ideating, prototyping, choosing, implementing, and learning. By iterating this process in multidisciplinary teams, working across the borders of innovation and labor policy, problems can be framed, the right questions can be asked, more ideas can be created, and the best answers can be chosen. The steps aren’t linear; they can occur simultaneously and can be repeated. We conclude by suggesting some principles for developing the necessary collaborations that can fuse innovation and labor policies, and make a democracy competitive in the global innovation economy. A mindset: Innovation is a process which needs investment — in research and development as well as in individuals. Job creation creates return on investment by letting more people creating more value. For innovation policists: We need to continuously develop reliable, quantifiable ways to agree on the success of innovative entrepreneurship in terms of sustainable improvement in job creation, inclusion and job satisfaction. For labor policists: We need to continuously develop reliable, quantifiable ways to agree on the success of job creation in terms of improvement in economic growth and fiscal balance. For politicians and economists: We need to continuously develop reliable, quantifiable ways to agree on the success of combined innovation and job creation in terms of sustainable improvement of the things that matter to people: family life, harmonious communities, physical and mental health, life long learning, creativity, aesthetics, and happiness (there are indexes for that, too). For journalists, writers and communicators: We need to continuously develop new common, relevant, simple language for discussing the connection between innovation, labor and quality of life, in such a way that it facilitates constructive interaction across silos, and enables democratic and business leadership to compete for mandate from citizens, shareholders and customers, maintaining checks and balances, and improving value creation for the constituents. For all: Try to leverage on “us and them”, rather than getting locked in “us or them”. Creativity and innovation works best, and yields the highest returns, with as few borders as possible. Protectionism and barriers to the free flow of ideas and people should be dismantled. The combination of innovation and job creation is by its nature the opposite of a zero sum game. A competitive creative player will always benefit from interaction with others, even if some encounters result in a loss. A set of competitive creative players can all win, if a zero-sum game is avoided. Sven Otto Littorin David Nordfors Visiting Scholar, Center for Innovation and Communication, Stanford University Minister for Employment of Sweden 2006-2010 President, European Council of Ministers (EPSCO) 2009 Founding Executive Director, Center for Innovation and Communication, Stanford University

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Switzerland Freezes Mubarak’s Assets

February 11, 2011

ZURICH, Feb 11 (Reuters) – Switzerland has frozen assets that may belong to Hosni Mubarak, who stepped down as president of Egypt on Friday after 30 years of rule, the foreign ministry said. “I can confirm that Switzerland has frozen possible assets of the former Egyptian president with immediate effect,” spokesman Lars Knuchel said soon after Mubarak bowed to 18 days of mass protests. “As a result of this measure any assets are frozen for three years.” He did not say how much money was involved or where it was. Assets belonging to Mubarak’s associates would also be targeted so as to limit the chance of state funds being plundered, the ministry said. Mubarak and his associates would be prevented from selling or otherwise disposing of property, notably real estate. In recent years, Switzerland has worked hard to improve its image as a haven for ill-gotten assets. It has also frozen assets belonging to Tunisia’s former president Zine al-Abidine Ben Ali, ousted by popular protests last month, and Ivory Coast’s Laurent Gbagbo, who has refused to step down after an election which the outside world says he lost. (Editing by Mark Trevelyan) Copyright 2010 Thomson Reuters. Click for Restrictions .

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David Isenberg: The $10,000 Iraqi Civilian

January 4, 2011

Just how much is an Iraqi life worth? I don’t know but, in the aftermath of the killing of 17 Iraqi civilians by Blackwater employees at Nisoor Square in September 2007, apparently Iraq and the United States, had very different ideas, according to one of the recently released Wikileaks cables. (Note: One can find all the Wikileaks cable concerning Blackwater here . The cable shows, not surprisingly, that the Iraqi and U.S. governments were magnitudes of order apart on what an Iraqi life was worth. According to the cable the U.S. Embassy in Iraq obtained a copy of the Government of Iraq’s investigation report of the September 16 incident at Nisoor Square. The report recommended payments of $8 million and $4 million for each death and injury respectively, and called for the USG to replace Blackwater within six months of the incident. At that time the Embassy had begun accepting claims from victims of the incident and approved payments of $10,000 for each death, $5,000 for each injury, (800 times less than the Iraqi figure for both death and injury) and $2,500 for property damage. The cable said the Iraqi government report stated “the conduct of the PSD violated Iraqi law and a number of CPA [Coalition Provisional Authority] orders and that therefore the incident is a pre-meditated murder for which the Blackwater personnel must be held accountable. It also claims that the Ministry of Interior has information on seven other instances in which Blackwater personnel killed 10 Iraqis and wounded 15 others.” Perhaps the most interesting part of the cable is at the end: Numerous editorial cartoons have been published depicting Blackwater as bloodthirsty mercenaries. While the escalation of the Turkish border issue has been dominating the media, the Blackwater incident will likely remain a prominent issue for editorials and political cartoons as the unpopularity of private security firms makes it an easy target. This seems to indicate that the embassy regarded criticism of private security contractors as just an image problem, and not a serious oversight and accountability concern. According to another Feb. 7 2008 cable the U.S. Iraqi embassy had, at that point, paid “132,500 dollars to claimants: 40,000 dollars to the families of 4 killed, 65,000 dollars to 13 injured, and 27,500 dollars to 11 claimants for vehicle damage.” An interesting passage from this cable is: Blackwater Condolence Payments —————————— ¶19. (C) On January 18, 2007, the DCM and RSO met with Blackwater representatives and were briefed on Blackwater,s intentions to make condolence payments to the victims of the September 16 Nisur Square incident and to obtain an operating license from the Ministry of Interior. In a change from Blackwater’s previous position, the representatives said that Blackwater has hired a number of Iraqi attorneys, including one who has had significant experience dealing with MNFI on Iraqi claims cases, to work with local courts on payment issues and plans to follow procedures for payments as determined by local laws and regulations. Blackwater has set aside “a generous pot” of money for these payments and the Iraqi attorneys will be contacting survivors and relatives of the deceased. Representatives said that they intended to make payments to all claimants, including those with lawsuits pending in the United States, largely because they did not expect those lawsuits to be successful. They also said that they would take into account the specific requests and circumstances of the claimants where possible. ¶20. (C) Blackwater is also moving ahead with efforts to obtain an operating license from the Ministry of Interior (MOI), and said that through their lawyers’ communications with the MOI they were told that Prime Minister Maliki would approve the licensing of Blackwater if condolence payments are made. They have received this same assurance from members of the Ministry of Interior responsible for licensing. ¶21. (C) The DCM told Blackwater that the Embassy believed it was morally correct for Blackwater to make condolence payments. She also indicated that while the Embassy welcomes this action by Blackwater, it will not have any effect on the DOS/Embassy decision on whether to retain Blackwater, and that in regards to the MOI licensing issue, under no circumstances could the Embassy approve of or in any way be part of a bribery effort. The Blackwater representatives indicated that they understood and that the process would be straightforward and transparent. In fairness, Blackwater was more generous than the U.S. government when making compensation. The cable notes “On average, Blackwater said it expects they will pay at least twice as much as what the Embassy paid and substantially more for victims or families that were more significantly impacted by the incident.”

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Cuba Commits to Private Enterprise and Foreign Developers Want In

January 3, 2011

For a country that claims to want to open its economy after five decades of communism Cuba has chosen an unlikely poster child for its efforts to attract foreign tourists Che Guevara A photograph of the revolutionary leader dressed in combat fatigues and swinging a golf club adorns walls at the Ministry of Tourism and at the Havana offices of some of the foreign companies that are teaming up with the government to develop golf courses luxury hotels vacation villas and condominiums

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Video: Nomura’s Adams Says U.K. Defense Cuts May Boost Shares

October 6, 2010

Oct. 6 (Bloomberg) — Jason Adams, a defense analyst at Nomura International Plc, talks about U.K. government plans to cut funding to the Ministry of Defence and prospects for the cuts being lower than estimated. He speaks with Maryam Nemazee on Bloomberg Television’s “Countdown.”

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SARI Announces the Appointment of Mr. Daouda Camara to the Board of Directors

September 4, 2010

HONG KONG–(Marketwire – September 5, 2010) –  SARI is pleased to announce the appointment of Daouda Camara as Director General of Sky Alliance Resources Guinée S.A and Chairman of Sky Alliance Resources Inc. Daouda Camara has had a distinguished career with successes in both the public and private sectors over the last 30 years. From 2004-2008, he served as the Director of the cabinet to six Prime Ministers. Mr. Camara also served as former Secretary General of the Board of Directors and former Administrative and Legal Director of the Iron Ore Mining Company of Guinea Mifergui-Nimba (1978-1984), Director General for Guinea’s National Electricity Board (ENELGUI) 1997-2002, Board Chairman of Société des Bauxites de Kindia, 1994-1997, and as lawyer and fiscal advisor to the Ministry of Natural Resources, Energy and Environment, 1986-1997. During this period, Mr. Camara was instrumental in writing, structuring and drafting the current Mining Code for the Republic of

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Shane Snow: How to Become an Internet Land Baron

September 3, 2010

When entrepreneur Juan Diego Calle asked the Colombian government to let him sell their Internet real-estate, he knew it was a long shot. The Harvard-educated Colombian native was battling over only two letters of the alphabet, but his request was tall: Let me commercialize the nation’s Internet identity. Juan Diego Calle A top-level domain, or TLD, is the letter combination that comes after the final dot in a website address; .com – meaning “commercial” – is the most common. Most countries get their own TLD (For example Mexico is .mx; Australia is .au). Some TLDs, such as the islands of Tuvalu’s .tv or Montenegro’s .me, double as convenient English words or abbreviations, making them desirable electronic real-estate. Domains cost anywhere from a few dollars to a few hundred, depending on who’s in charge; in secondary markets, valuable domain names can sell for hundreds of thousands. Colombia was fortunate to own .co, but for years it had effectively prevented anyone from registering anything. Between “corporation,” “company,” and “commercial,” entrepreneurs could almost smell the money “.co” could bring in if unleashed to the hungry Web. So, in 2006, when Colombia passed a law giving its Ministry of Communications regulatory oversight of the .co TLD, a change in policy appeared imminent. Internet companies began petitioning the ministry to let them manage the TLD. A serial entrepreneur from a young age, Calle started a stereo installation business as a teenager. At age 22 he founded TeRespondo, an Internet search advertising network for Latin America, which he sold to Yahoo in 2005. Calle then went to business school and started a “virtual real-estate” company called STRAAT investments. When Colombia shifted .co responsibilities in 2006, Calle began positioning himself to become a contender for the TLD management rights. Calle, now 32 years old, was clearly an underdog in the bid war against companies like the $1.5 billion Verisign, which owns the rights to .com and .net. He assembled a team under a joint venture called .CO Internet SAS. In August 2009 they presented the Ministry with 1,165 pages explaining why Calle’s team was right for the job, and then they crossed their fingers. In February 2010, despite Verisign and the rest, the bureaucracy gave Calle – the local man – the contract. “Considering the caliber of companies that participated in the process and the opportunity to do something that would have a global impact on the internet, winning the bid was a surreal experience,” Calle says. “Part of our competitive advantage was the strong sense of national pride that fueled our team to work night and day to win the bid,” says Lori Anne Wardi, Director of .CO Internet, “and to prepare a bid package and business plan that treated the .co domain as a valuable national asset and symbol of national pride – the export of which would only reflect positively on Colombia.” Calle’s biggest concern after winning the contract was that nobody would actually buy the domains. Another was that spammy websites would buy .co domains hoping to capitalize on typos or to commit fraud. Some businesses have complained that .co is another way for “domain squatters” to harm companies by buying domains for the sole purpose of selling them at an inflated price. However, according to the domain parking site Sedo, only 0.001% of parked (squatted) domains get 10 or more unique visitors a day. The vast majority of Internet users use search rather than typing in domains. Even if 5% of type-in traffic (an implausibly high amount) were to mistype .com as .co, most companies would lose only a tiny fraction of potential visits each year if squatters bought their brand’s corresponding .co domain. To combat squatters and assuage fears, Calle’s team began a marketing campaign that involved giving away some of the most valuable .co domains to the top 100 world brands, and letting entrepreneurs with great ideas register before anyone else. Though some companies have expressed annoyance at having to buy the $29-a-year .co version of their domain in order to “protect” their brand, for only about $2.50 a month, many of them did it anyway. (Of the revenue generated by .CO Internet SAS in domain sales, Colombia itself takes an average of 25%.). As a result of .co’s multi-phase rollout, companies like Twitter (t.co), Politico (politi.co), Overstock (o.co), and VentureHacks (angel.co) began spreading the word and lending credibility to the TLD. Even before .co’s general availability, 39,000 domain applications were recorded. On launch day, Calle and company still had their fingers crossed. One minute after opening the floodgates on July 20, 2010, people had registered 8,000 domains. By 22 minutes, more 100,000 domains had been registered. After 24 hours, 233,000 domains. By the end of week one, 336,160 domains. Six months after winning the Colombian Ministry of Communication’s blessing, Calle is now an Internet real-estate mogul, with 469,519 domains sold, and counting. He has some catching up to do in order to compete with the 90-some million .coms out there, but Calle and his team say they’re “thrilled” by the response to .co so far. The next step: keep “inspiring startups” to “create a future on their own little slice of the Internet.” —– Shane Snow is a writer and web entrepreneur in New York City. He runs the online printing comparison site PrintingChoice.com and draws financial infographics for the CreditLoan network.

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Toyota Recall: Automaker Pulls 412,000 Cars In U.S., Mostly Avalons

July 29, 2010

TOKYO — Toyota is recalling 412,000 passenger cars, mostly the Avalon model, in the U.S., and another 16,420 vehicles in Japan for steering problems, the automaker said Thursday. The 373,000 Avalons being recalled in the U.S. range from the 2000 model year through to 2004 and have improper casting of the steering lock bar – a component for the steering system – causing cracks to develop on the surface. In some cases, the crack can cause the lock bar to break, potentially leading to a crash if the steering wheel locks, the world’s No. 1 automaker by car sales said. No injuries have been reported from the accidents that may be caused by the defect, it said. Recalled in Japan for a similar problem are 6,750 vehicles, called Pronard, built from February 2000 through January 2004, Toyota and the Japanese transport ministry said. There have been three reported problems linked to the defect but no accidents in Japan, the ministry said. Also being recalled in the U.S. are 39,000 Lexus luxury model LX 470s for the 2003-2007 model years because of a steering shaft problem, which is different from the Avalon steering problem, according to Toyota. That problem affects 9,670 vehicles in Japan, two Land Cruiser models, the ministry said. One problem has been reported but no accidents are suspected of being linked to the defect, it said. Toyota said it will fix the Avalon steering problem by replacing a part called the steering column bracket. The problem with the LX 470 will be fixed by replacing a component in the steering shaft called a snap ring. Customers affected by the recalls will begin receiving mailings in August instructing them to take their cars to their dealer for the repairs, Toyota said. The latest recall comes on top of some 8.5 million vehicles that have been recalled around the world by Toyota Motor Corp. since October for a spate of problems, including faulty floor mats, defective gas pedals and braking software glitches. The recall crisis has damaged Toyota’s reputation for quality and customer service. Toyota executives have repeatedly vowed to put customers first. But it has been criticized as lagging in its response to quality lapses, and was slapped with a record $16.4 million fine in the United States for responding too slowly when the recall crisis erupted. Earlier this month, Toyota announced a recall of some 270,000 vehicles, mostly Lexus cars, for engine problems, dealing a further blow to its image because Lexus is its top-end luxury brand. Toyota faces more than 200 lawsuits in the U.S. tied to accidents involving defective automobiles, the lower resale value of Toyota vehicles, and a drop in its stock value. “Toyota is continuing to work diligently to address safety issues wherever they arise and to strengthen our global quality assurance operations so that Toyota owners can be confident in the safety of their vehicles,” said Steve St. Angelo, Toyota chief quality officer for North America. Owners of Avalon and Lexus cars are being notified next month, being asked to bring in their cars to nearby Toyota and Lexus dealers for a free fix, according to Toyota. “Our engineers have thoroughly investigated this issue and have identified a robust and durable remedy that will help prevent this condition from affecting drivers in the future,” said Mark Templin, group vice president and general manager of Lexus. ___ AP Auto Writer Dan Strumpf contributed to this report from New York.

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Masked Protesters Clash With Greek Police (PHOTO)

June 29, 2010

(AP) ATHENS, Greece — Dozens of masked youths clashed with police at a union protest Tuesday in Athens during the country’s fifth general strike this year against the cash-strapped government’s planned pension and labor reforms. Riot police fired tear gas and stun grenades to disperse troublemakers who threw chunks of marble smashed off metro station entrances and set rubbish bins on fire. Running clashes continued along a major avenue – lined with shuttered shops and banks – as rioters armed with wooden clubs made repeated sallies against police. Seven policemen were injured in the clashes, and 13 demonstrators were detained, six of whom were arrested, police said. Riot police chased demonstrators into a main subway station, and an AP photographer saw police detain one young man in a subway car, spraying him with pepper spray. Demonstrators smashed bus stops and phone booths, and broke windows at three shops and two bank branches. The demonstration ended after a few hours, and rioters melted away toward the central Exarcheia district – a traditional anarchist hangout. However, Tuesday’s clashes were far more muted than the riots that erupted during a previous general strike on May 5, when three people died after becoming trapped in a bank torched by rioters. The violence came as some 10,000 people took part in a demonstration organized by the country’s two main labor unions and fringe left-wing groups. An earlier separate march by some 6,000 members of the Communist Party-backed PAME union ended peacefully. Tuesday’s strike shut down public services, disrupted transport, left hospitals operating on emergency staff and pulled all news broadcasts off the air. The country’s airports, however, remained open, and international flights were operating normally although nearly 100 domestic flights were canceled. Unions fiercely oppose draft legislation submitted to parliament last week that would increase retirement ages and make it cheaper for companies to fire workers. The measures – which include raising women’s retirement age to 65 to match those of men and require 40 years of social security contributions for a full pension – are aimed at fixing the country’s debt crisis, which has shaken the entire euro zone. “They’ve declared war on you, fight back!” PAME demonstrators chanted as they walked down a major avenue in the center of the capital. Greece is caught in a major debt and deficit crisis; it avoided bankruptcy last month only after receiving the first installment of a euro110 billion ($136 billion) emergency loan package from the European Union and the International Monetary Fund. In return, Athens passed painful austerity measures, cutting pensions and salaries and raising consumer taxes, and is now pushing through labor and social security reforms. Parliament is to start discussing the proposed reforms Tuesday, in a debate expected to last more than a week. Despite opposition from several of its own lawmakers, the center-left government – which holds a seven-seat majority in the 300-member house – is expected to win the final vote. Tension mounted once more in the country’s main port of Piraeus early Tuesday morning, where hundreds of PAME demonstrators attempted to prevent tourists and locals from boarding ferries to Aegean islands, even though a court had declared seamen’s participation in the strike illegal. “They want to put us in a straitjacket so we work for free all our lives so that some can have their wealth and get very rich at our expense,” said Sotiris Poulikogiannis, a protester in Piraeus. “We don’t accept this. Day by day we’ll grow stronger and more aware of how to overturn this situation.” The Civil Protection Ministry said all ships scheduled to leave in the morning did set sail, with about 350 passengers. However, about 50-100 people didn’t manage to board their ferries as strikers prevented them from entering the port. Authorities said their tickets would also be valid Wednesday. Another four ships that were to sail for Crete and the Cycladic islands in the early afternoon had informed passengers that they would depart at midnight, the ministry said. A similar strike by two seamen’s unions last week – which was also declared illegal – left thousands of travelers stranded in Piraeus for a day. Shipping companies and officials in Greece’s vital tourism industry strongly criticized the government for not taking action to stop the strikers. ____ Associated Press Television crews and photographers in Piraeus and Athens, and AP writer Nicholas Paphitis in Athens contributed.

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Women Prefer Men Holding Government Bonds, Japan Finance Ministry Ad Says

June 9, 2010

By Wes Goodman and Theresa Barraclough June 9 (Bloomberg) — Japanese women are seeking men who invest in government bonds, according to an advertisement being run by the Ministry of Finance. “I want my future husband to be diligent about money,” a 27-year-old woman says in an ad being run in free magazines promoting a fixed-rate, three-year note that Japan started selling last week. “Playboys are no good.” She’s one of five women featured in the page, which says “Men who hold JGBs are popular with women!!” The ministry commissioned the ads to appeal to citizens for money at a time when record government borrowing threatens to outstrip demand. Prime Minister Naoto Kan , who took office yesterday, said he doesn’t have an instant fix to rein in the world’s largest public debt. The government’s plan to attract marrying-age men comes after a campaign aimed at retirees started last August. That push featured Junko Kubo, a former anchor on Japan’s public broadcaster NHK , in ads placed in the backs of taxi cabs. Kubo followed Koyuki, an actress and model who in 2003 appeared in “The Last Samurai” with Tom Cruise as well as posters for government bonds. “It strikes of desperation,” Christian Carrillo , a senior interest-rate strategist in Tokyo at Societe Generale SA said about the ad campaign. “I doubt this will be a successful strategy to attract retail investors.” Individuals can buy government debt at local banks for 10,000 yen ($109) according to the ads. The finance ministry in 2002 hired Koushiro Matsumoto, an actor in Kabuki theater, and model Norika Fujiwara in its bond campaigns. Japan’s government debt amounted to a record 882.9 trillion yen as of March 31, according to the Ministry of Finance. A 600 billion yen sale of 30-year bonds yesterday attracted bids for 2.25 times the amount on offer, the least since April 2004. Biggest Market Japan has the world’s largest bond market, followed by the U.S., based on a ranking of 35 nations by the Bank for International Settlements in Basel, Switzerland, using data through September 2009. Kan, the former finance minister, takes office facing a debt burden that has increased by almost 80 percent in a decade and it is equivalent to 180 percent of the nation’s annual economic output. “I don’t think fiscal rehabilitation can be done overnight,” he told reporters last week. Moody’s Investors Service rates Japan’s debt at Aa2, the third-highest investment grade, with a stable outlook. Standard & Poor’s cut the outlook on Japan’s AA grade in January, citing diminishing “flexibility” to cope with the nation’s swelling debt load. Former Prime Minister Yukio Hatoyama ’s decision to quit last week “has no credit implications, but that in itself is positive news, given reports that Japan’s ship of state is rudderless,” Thomas Byrne , senior vice president of Moody’s, wrote in a statement released June 7. Declining Holdings “The world is full of dirty shirts in terms of excessive debt,” Bill Gross, who runs the world’s biggest bond fund at Newport Beach, California-based Pacific Investment Management Co., said in an interview June 4. Japanese households have started to cut their holdings of the nation’s debt. Their ownership of government securities declined to 35 trillion yen as of Dec. 31 from a record 36.7 trillion yen a year earlier, according to the Bank of Japan. Masaaki Kaizuka , director of debt management at the Ministry of Finance, aims to change that. The ministry started selling three-year bonds tailored for individuals on June 3, after conducting a market survey that showed pent-up demand for shorter-term securities, Kaizuka said. ‘Untouched Group’ “What we can do is try to attract an untouched group of people to find a different sort of investor,” Kaizuka said. Shorter bonds are seen as safer because they mature faster. This campaign for JGBs was crafted by Dentsu Inc., Japan’s largest advertising company, which the ministry chose through an annual bidding process, Kaizuka said. “Retail government bonds, which provide the peace of mind that women want, are now available in three-year maturities with a fixed rate,” the ad says. The bonds are called “Kotei3,” meaning “Fixed3” because they mature in three years. Japanese government securities maturing in 2013 yield 0.176 percent as of 3:26 p.m. in Tokyo, versus 1.20 percent for same- maturity debt in the U.S. The yield turns to about 1.38 percent in Japan after accounting for falling prices in the economy. The so-called real yield in the U.S. is negative 1 percent. Japan’s bonds handed investors a 1.32 percent gain this year, versus 3.96 percent for sovereign debt globally, according to Bank of America Merrill Lynch indexes. To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net ; Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net .

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Kan Pledges to Revive Trust in Japan’s Ruling Party as New Prime Minister

June 4, 2010

By Sachiko Sakamaki and Takashi Hirokawa June 5 (Bloomberg) — Naoto Kan took over as Japan’s prime minister with a vow to succeed where his predecessor had failed in changing a political system dominated by a single party for half a century. “I want to convince the public that real reforms are entering the stage of concrete implementation,” Kan, 63, said yesterday in his first public address after parliament elected him premier. “I want to show the people their expectation for the Democratic Party of Japan reflected in last year’s election wasn’t just a dream.” Kan is trying to convince voters he can deliver change they sought in the DPJ and Yukio Hatoyama last August in a landslide victory. With mid-term elections next month, Kan must prove he has a feasible strategy to rein in the developed world’s largest public debt and safeguard economic growth. “Japan needs drastic measures and this requires strong leadership and vision,” said Kirby Daley , a senior strategist in Hong Kong with Newedge Group’s prime brokerage business. “Kan has the ability to transform this uninspired and unoriginal party into the enlivened and energized force for change that so many believed in last year.” Kan, the fifth leader in less than four years, said yesterday he will pursue the main policy goals of Hatoyama, which included improving social welfare and cutting the power of bureaucrats. He must also consolidate ties with the U.S. and build relations with China and other Asian countries. Base Relocation Hatoyama said he would step down on June 2 after failing to relocate a U.S. Marine base off Okinawa, a campaign pledge that dominated his relationship with President Barack Obama . Kan vowed yesterday to handle the dispute over where to relocate the Futenma Marine facility within the island based on an accord with the U.S. that Hatoyama announced last month. China’s foreign ministry called on Kan to continue strengthening relations. “Prime Minister Kan has emphasized many times a focus on developing ties between China and Japan,” spokesman Ma Zhaoxu said in a statement posted on the ministry’s website today. “We appreciate it.” Vice Finance Minister Yoshihiko Noda , 53, may take over as Kan’s successor at the ministry, the Yomiuri newspaper reported yesterday, without citing anyone. Yukio Edano will be named secretary general of the ruling Democratic Party of Japan, according to the report. ‘Lose Moderately’ “The DPJ now has a chance to lose moderately instead of drastically” in mid-term elections next month, said Minoru Morita , a Tokyo-based independent political commentator. “The DPJ wants to change its image to prevent a major defeat.” Japan’s bonds rose yesterday, pushing five-year yields to the lowest since 2003, on speculation the new administration will adopt measures to curb the deficit. The Nikkei 225 Stock Average fell 0.1 percent after rising the most in six months on June 3. In his televised address, Kan said he aims to pass a bill allowing Japan Post Holdings Co., the state-run operator of the world’s biggest bank by deposits, to expand operations, in this session of parliament. The bill is currently under consideration in the upper house of parliament, after passing the lower house last month. Japan’s ratio of debt to gross domestic product is approaching 200 percent, the highest among developed nations, according to the Organization for Economic Cooperation and Development. A failure by leaders to address the imbalance puts Japan at risk of triggering the next sovereign debt crisis, said Toyomi Kusano , president and chief executive officer at Kusano Global, a hedge-fund research firm in Tokyo. No Quick Fix Kan said earlier this week he has no instant fix for Japan’s fiscal shortfall and expects voters to punish the ruling party in next month’s contest. “This is still the second-largest economy in the world and it’s very important that we have strong, effective leadership,” said Ed Rogers , chief executive officer of Tokyo-based hedge- fund adviser Rogers Investment Advisors Y.K. “The political merry-go-round has got to stop.” Japan’s Keidanren business lobby, led by Tokyo-based Sumitomo Chemical Co . Chairman Hiromasa Yonekura, urged Kan’s government to tackle deflation and overhaul fiscal and tax policy. Masamitsu Sakurai, chairman of the Japan Association of Corporate Executives and of Ricoh Co., said yesterday in a statement Kan should clarify the party’s medium and long-term vision for the country. Taking Power Hatoyama, 63, resigned less than a year after the DPJ took power. Japan’s new prime minister graduated from the Tokyo Institute of Technology in 1970, majoring in applied physics, and later obtained a license as a patent attorney. He entered parliament in 1980 as a lawmaker for the now-defunct Social Democratic Federation. Kan is a first-generation politician, who rose to prominence as health minister in the 1990s when he exposed that agency’s role in allowing up to 5,000 Japanese to contract HIV through contaminated blood products. A co-founder of the DPJ in 1998, he was forced to step down as party leader in 2004 after admitting he failed to fully pay his national pension contribution. To contact the reporters on this story: Sachiko Sakamaki in Tokyo at ssakamaki1@bloomberg.net ; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net .

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China May Hold Off Rate, Yuan Moves as Europe Crisis Worsens, BNP, AMP Say

May 20, 2010

By Chua Kong Ho May 21 (Bloomberg) — China may ease tightening measures as the deepening European crisis threatens global growth, AMP Capital Investors and BNP Paribas said, while BofA Merrill Lynch Global Research predicted a delay in the yuan’s revaluation. The government may postpone an increase in borrowing costs until the third quarter after raising mortgage rates and down payments to curb record gains in home prices , BNP said. The central bank this month ordered lenders to set aside more funds as reserves for a third time in 2010 to prevent asset bubbles. “We understand that Chinese policy makers have noticed the interaction between structural tightening and a possible double- whammy effect on growth,” BNP Paribas analysts Chen Xingdong and Isaac Meng said in a report. “We expect the government to become more cautious in additional tightening measures.” China’s Shanghai Composite Index has fallen 5.6 percent this week on concern the European crisis may slow China’s exports to a market that makes up more than a fifth of its overseas sales. The gauge has lost 22 percent this year after entering a bear market last week, the first among the world’s 10 biggest exchanges in 2010. “It’s too early to say the falls are over, but we see it as part of a correction,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital, which oversees about $90 billion, said in e-mailed comments. “It’s increasingly likely the Chinese authorities will be starting to think about easing up on the brake.” ‘Complicated’ Chinese Premier Wen Jiabao said May 18 the global economic crisis is more “complicated” and serious than expected and the foundations of the recovery remain fragile, China Central Television reported. Europe is China’s biggest export destination, making up 20 percent of overseas sales. China Cosco Holdings Co. , the nation’s largest shipping company, has slumped 30 percent from this year’s high in January. Guangzhou Shipyard International Co. , which relies on Europe for more than 90 percent of sales, tumbled 25 percent. “While attention is heavily focused on Europe, China might be gradually getting a whole lot worse,” said Emil Wolter , head of Asian regional strategy at Royal Bank of Scotland Group Plc. “This is not a done deal but frankly this is now the big black swan from a global demand perspective.” A weeklong rout in global stocks deepened yesterday on concern that European governments are divided on resolving financial turmoil in the region. Uncoordinated attempts by European policy makers to resolve the region’s debt crisis have unnerved investors. France, the Netherlands and Finland said they have no plans to follow German Chancellor Angela Merkel ’s effort to control what she called “destructive” markets by restricting short selling. Rate Increases Standard & Poor’s 500 Index plunged the most in 13 months, tumbling 3.9 percent, after U.S. jobless claims rose by 25,000 to 471,000 in the week ended May 15, exceeding the median forecast of economists surveyed by Bloomberg News. China may hold off interest-rate increases until the second half or next year as growth slows, the state-run China Securities Journal newspaper said in a front-page editorial yesterday. Exports to Europe may also slow by six to seven percentage points in May, June, and in the third quarter as Europe’s debt crisis deals a “severe” blow to foreign trade, the Shanghai Securities News reported May 19, citing Huo Jianguo, a researcher at the Ministry of Commerce. “In the short term, the government doesn’t want to raise rates,” Citic Securities Chief Strategist Yu Jun said today. “The risk of the Chinese economy slowing is too great.” Reviewing Forecast The debt crisis also prompted Standard Chartered Plc to review its forecast for an appreciation in the yuan this month. The Chinese currency has appreciated more than 14 percent against the euro in the past four months and the gain is putting pressure on China’s exporters, Ministry of Commerce spokesman Yao Jian said May 17. “We are pushing back our call for the renminbi to exit the de facto U.S. dollar peg from this summer to the end of the year,” Merrill said in a report today, forecasting the yuan to trade at 6.80 to the dollar by the end of 2010. The U.S. and China’s biggest trading partners have asked for a revaluation of the yuan for a level-playing field for exports. China won’t succumb to external pressure and will modify the currency based on the economic situation, Assistant Finance Minister Zhu Guangyao said in Beijing yesterday. The country won’t make a “meaningful” commitment on the yuan, Market News International reported today, citing an unidentified People’s Bank of China official. “Clearly, for now the timing of a yuan revaluation has been pushed back,” said Thomas Harr , a currency strategist at Standard Chartered in Singapore. “The yuan’s nominal exchange rate has dropped and there is a lot less rationale for China to appreciate now” after the decline in the euro and other Asian currencies. BNP forecast a “limited” rate increase late in the third quarter, while a revaluation of the yuan is “increasingly unlikely.” The Australia and New Zealand Banking Group Ltd. said China may remain “cautious” on its currency policies and may delay any move on the yuan until at least late June. To contact the reporter on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net

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Properst Files for Bankruptcy as Madonna Ads Fail to Lure Japan Homebuyers

May 13, 2010

By Tomoko Yamazaki and Katsuyo Kuwako May 14 (Bloomberg) — Properst Co. , the Japanese property developer that had Madonna promote high-rise apartment sales in central Tokyo, filed for bankruptcy protection as the credit crisis pushed condominium sales to almost two-decade lows. Properst’s liabilities totaled 55.4 billion yen ($597 million) as credit dried up after Lehman Brothers Holdings Inc. collapsed, leading condominium prices lower and denting demand, the Tokyo-based firm said in a statement today. The company will maintain its stock listing on the Jasdaq market as it undergoes the bankruptcy process, in part through capital raisings via private placement and debt equity swaps, it said. New condominium sales in greater Tokyo last year fell to the lowest level in 17 years, commercial land prices declined to the lowest in at least 36 years, and real estate firms accounted for eight of the 10 biggest bankruptcies among listed Japanese firms in 2009. The filing marks the second by a listed real estate company this year amid a continued deterioration in Japan’s property market. “Mid-to-small sized real estate firms are still struggling to sell condominiums,” said Takashi Ishizawa , an analyst at Mizuho Securities Co. in Tokyo. “I expect further consolidation, especially among smaller property firms going forward.” Properst shares were poised to fall by their daily limit of 300 yen to 980 yen at the lunch break in Tokyo. The stock was untraded as offers outnumbered bids. It slid 24 percent yesterday. Madonna Established in 1987, Properst has focused its business on property developments in the metropolitan area ranging from small-sized apartments to condominiums in high-rise buildings. Madonna was in advertisements for the Brillia Mare Ariake luxury condominiums in Tokyo Bay that went on sale in 2007. Commercial RE Co. , a real estate management company whose largest stakeholder is Goldman Sachs Group Inc. , filed for bankruptcy protection on May 6 with 15 billion yen in liabilities. New condominium sales in the Tokyo area totaled 36,376 units in 2009, the lowest in 17 years, and compared with the peak of 95,635 units sold in 2000, according to the Real Estate Economic Research Institute. Japanese commercial land prices declined 6.1 percent in 2009, more than the 4.7 percent drop a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism said in a report released in March. Values are at their lowest since the ministry began collecting comparable data in 1974. To contact the reporters on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net ; Katsuyo Kuwako in Tokyo at kkuwako@bloomberg.net

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China Farmers’ Subsidies for Rat-Proof Refrigerators Feed Appliance Boom

May 11, 2010

By Wing-Gar Cheng May 11 (Bloomberg) — Yang Shibo, a 50-year-old farmer in China’s Shandong Province, bought a refrigerator to keep vermin away from his family’s meat and vegetables. The government eased his purchase by knocking 13 percent off the price. “We see a lot of rats running around, they run around on the ceilings, they eat our food,” Yang, who grows peanuts, said as he swatted flies in his kitchen. “We didn’t have a fridge before. It’s much more convenient now.” Farmers are benefitting from more than 15 billion yuan ($2.23 billion) in subsidies this year for appliance purchases by rural residents as the government tries to boost domestic consumption and ease a reliance on infrastructure spending and exports . That more than doubled first-quarter profit at Qingdao Haier Co. , part of China’s biggest appliance maker. TCL Multimedia Technology Holdings Ltd. , part of China’s biggest consumer-electronics maker, said net profit rose 69 percent. Farmers using subsidies bought 41.7 billion yuan in household appliances during the first four months of this year, a 510 percent increase from a year ago, the government said. Manufacturers shipped about 163 billion yuan worth of products under the program last year. Sales Surge “The subsidy program has imposed a remarkable growth in household-appliance sales,” said Zhu Jianfang , a Beijing-based economist at Citic Securities Co. Ltd. “This is one of the policies that is driving consumption growth in China.” Local governments reimburse farmers for televisions, refrigerators, washing machines and computers. The Ministry of Commerce started a provincial subsidy program in 2007 and expanded it nationwide in February 2009. Farmers bought 20.8 million household appliances with subsidies from January through April, a 370 percent increase from a year earlier, the Ministry of Commerce said May 7. The top-selling brand in April was Haier. Qingdao Haier, the Qingdao-based air-conditioner and refrigerator unit of Haier Group Corp., said April 29 that first-quarter net income rose to 358.4 million yuan from 138.2 million yuan a year earlier. Sales rose 45 percent to 13.3 billion yuan. ‘Rodent-Proof’ Fridge Haier Group targets rural customers with refrigerators featuring metal plates to cover holes on the back and thicker, “bite-proof” wiring, Philip Carmichael , president of Asia Pacific operations, said in Hong Kong. “When you plug in a refrigerator in the countryside and the compressor goes on, that’s like a beacon for rodents to build their nests,” Carmichael said. “That’s what makes us think about making it rodent-proof.” Those features helped convince Yang, who bought Haier’s 1,600 yuan, two-door model. Refrigerators were the top subsidized purchase in 2009 , with sales of 32 billion yuan, Commerce Ministry data showed. TCL Multimedia, the Hong Kong-listed arm of TCL Corp. , said first-quarter net income was HK$44 million ($5.66 million), a 69 percent increase from a year earlier. Sales of liquid-crystal display televisions rose 61 percent to 1.93 million. The company said 43 percent of those sales involved subsidies. Its 65-inch (165-centimeter) flat-screen TV sells for 39,959 yuan at a Suning Appliance Co. outlet in Langfang, Hebei. Bigger TVs “Rural customers always go big on sizes,” said Li Lu, deputy general manager of TCL Multimedia’s China unit. “They even asked us to widen the plastic borders because it makes the TVs look bigger and helps showcase wealth.” Suning, China’s biggest electronics retailer by market value, applies the subsidies to retail prices and files for reimbursement. Monthly sales in Langfang are up 10 percent to an average 4 million yuan since the program started, store manager Li Hongjie said. Yet some farmers still can’t afford to participate. Wei Yanhua, 60, who earns 4,200 yuan growing corn in Hebei, is saving to cement her courtyard. “I can barely feed my family of nine, let alone spend a few thousand yuan to buy a new television set,” she said. Mark Williams , senior China economist for Capital Economics Ltd. in London, called the subsidies “a short-term fix.” The government instead should boost employment and incomes to ensure long-term economic growth , he said. “What China needs really is not these short-lived schemes, but a more fundamental look at how it can boost consumer spending over the long term,” he said. Rural Living Standards The government wants to raise rural living standards after state-run China Daily reported the income gap with urban areas grew to its widest ever last year. Almost 16 percent of Chinese live on less than $1.25 a day, according to the UN Human Development Report . China paid about 7.54 billion yuan in subsidies in 2009, and this year may pay 15.2 billion yuan, Finance Ministry data showed. Each rural household can buy two products in a category, the government said . This year, price caps on eligible products were raised to broaden the selection. The limit for television sets doubled to 7,000 yuan, and gas stoves, electric cookers and DVD players were included. Wei Jiushan, who farms a 0.8-acre cornfield in Hebei province outside Beijing, said he would continue taking advantage of the program after buying his family’s first washing machine. His father bought a subsidized, 650-yuan Hisense Electric Co. refrigerator in March. “A television is definitely next on my list,” Wei said, mentioning a 22-inch LCD model. “I will buy the appliances in stages and getting some subsidy is better than nothing.” To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net

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South Korea’s Exports Increase for Sixth Straight Month on Global Recovery

April 30, 2010

By Jungmin Hong and Eunkyung Seo May 1 (Bloomberg) — South Korea’s exports increased for a sixth consecutive month in April as a recovering global economy boosted demand for semiconductors and cars. Overseas shipments rose 31.5 percent from a year earlier to $39.88 billion, the Ministry of Knowledge Economy said in Gwacheon today. That compared with the median forecast of a 31.8 percent gain in a Bloomberg News survey of ten economists. Imports climbed 42.6 percent to $35.47 billion, leaving a trade surplus of $4.41 billion. Economies across Asia are reporting faster growth as the region leads the world out of the worst global recession since World War II. Samsung Electronics Co. , Asia’s biggest maker of semiconductors, flat screens and mobile phones, posted a seven- fold increase in profit for the first quarter and Hyundai Motor Co. boosted sales in the U.S. and China this year. “Both exports and imports will likely grow further as the global economy is gathering pace,” Kim Jae Eun , an economist at Hyundai Securities Co. in Seoul, said before the report. “It will lead to a strong start for the second quarter.” Overseas sales to China, the biggest buyer of South Korean goods, rose 50.4 percent in the first 20 days of April, today’s report showed. Shipments to the U.S. climbed 28.5 percent and those to Japan gained 32.4 percent over the same period. The World Bank forecasts China’s economy will expand 9.5 percent this year, with imports climbing 16.4 percent. The International Monetary Fund this month upgraded its global growth forecast for 2010 to 4.2 percent from 3.9 percent. Display Panels Shipments of semiconductors increased 97.9 percent last month and display-panel exports gained 38.4 percent, according to today’s report. Overseas sales of cars advanced 61.8 percent. South Korea, Asia’s fourth-largest buyer of crude oil, imported 1 percent less of the fuel in April from a year earlier, the ministry said today. Imports declined to 69.6 million barrels last month from 70.3 million barrels a year ago. Taiwan’s exports climbed in March for a fifth month, soaring 50.1 percent from a year earlier, as a pickup in global growth boosted demand for the island’s electronic goods. Malaysia’s shipments rose 18.4 percent in February from a year earlier after advancing 37 percent in the previous month, the most in more than 11 years. South Korea’s government forecasts exports will rise 13 percent this year to $410 billion, compared with a 14 percent decline in 2009. The nation’s trade surplus in the second quarter is expected to be bigger than the reading in the first three months of the year which was $3.3 billion, the ministry said today. Factory Output Industrial production in South Korea grew for a ninth straight month in March, jumping 22.1 percent from a year earlier, the statistics office said yesterday. That was more than the 19.8 percent median forecast in a Bloomberg News survey of 14 economists. Asia’s fourth-largest economy accelerated more than estimated last quarter as the global recovery spurred demand for electronics and consumer spending advanced, prompting the government to warn about speculative gains in the currency . As stronger growth pushed the won close to a 19-month high against the U.S. dollar, the Ministry of Strategy and Finance said on April 27 that investors have bet “excessively” on the currency’s rise. A strong won could hurt exporters. ‘Upward Pressure’ The government’s comments on the won put a brake on the currency’s appreciation. The currency, which has gained 15 percent in the past year, rose 2.1 percent in April. The Kospi stock index yesterday closed 0.8 percent higher at 1,741.56, advancing for the 12th straight week, the longest winning streak since June 2007. “Strong exports and foreign investors’ purchase of Korean stocks and bonds will likely add upward pressure on the won, which will likely prompt more government intervention,” Kim at Hyundai Securities said. The Bank of Korea kept the benchmark interest rate at a record-low 2 percent for a 14th straight month on April 9 as the government presses for low borrowing costs to spur the economy ahead of provincial elections in June. To contact the reporters on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net Jungmin Hong in Seoul at jhong47@bloomberg.net

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Hu Cuts Short Brazil Visit to Supervise Qinghai Earthquake Rescue Efforts

April 15, 2010

By Bloomberg News April 15 (Bloomberg) — Chinese President Hu Jintao cut short a visit to Latin America after 930 people were reported dead or missing in yesterday’s earthquake in a remote western part of the country. About 100,000 people have been displaced since the 6.9- magnitude quake flattened the town of Jiegu in Qinghai province, Zou Ming, director of disaster relief for the Ministry of Civil Affairs, said today in Beijing. Fifteen thousand homes were destroyed, 617 people are dead and 313 are missing, he said. The deaths of 66 students and 10 teachers in school collapses echoed the nation’s last major temblor in 2008. Hu decided to return home to take charge of the crisis, Brazilian Foreign Minister Celso Amorim told reporters in Brasilia. Premier Wen Jiabao arrived in the region today, China Radio International reported. Rescue efforts are being hampered by the town’s remote location about 800 kilometers (497 miles) from the provincial capital of Xining. More than 85 percent of the homes were destroyed in Jiegu, part of an ethnic Tibetan region more than 4,000 meters (13,123 feet) above sea level. “Because of the high altitude many members of the rescue team as well as sniffer dogs are suffering from altitude sickness,” Miao Chonggang, deputy director of the China Earthquake Administration, said at the same Beijing briefing. “This kind of long distance rescue operation is a major difficulty.” ‘Enough’ Relief Workers In Beijing, Zou of the Civil Affairs Ministry, said sufficient supplies would arrive within two days. There are some 10,000 rescue and medical personnel in the area, which is “enough,” he said at a press briefing. Among the dead are children and teachers who were crushed in demolished schools, the official Xinhua News Agency said. The collapse of classrooms in neighboring Sichuan province during a May 2008 earthquake that killed about 90,000 people sparked protests from grieving parents and accusations that corrupt officials ignored sub-standard construction practices. Only 10 percent of houses at the quake site were made from cement, Miao said, adding that the predominantly mud, wood and brick buildings were almost all flattened. The Ministry of Civil Affairs is sending 5,000 tents, 50,000 cotton coats and 50,000 quilts to the region, Xinhua reported. Airstrip Reopens Hundreds of rescuers headed to the site after a damaged airstrip reopened late yesterday, said a spokesman for the Qinghai government’s news department who would only give his surname, Zhang. A single road leading to the area is too narrow for large vehicles, he said. China Central Television showed residents digging through rubble with their hands. Others struggled through fire and smoke to reach people trapped under a collapsed hotel. Temperatures were forecast to drop as low as minus 3 degrees Celsius (26.6 degrees Fahrenheit). Electricity to the area has been cut, roads damaged and telecommunications disrupted. A reservoir cracked, and workers are trying to prevent flooding, Xinhua said. The Red Cross is helping the government with search and rescue and has provided thousands of relief tents, said Paul Conneally, a spokesman for the International Federation of Red Cross and Red Crescent Societies in Geneva. Taiwan, which has been governed separately from mainland China since 1949, is sending a 23-person team to the area, Xinhua reported. Rescue Efforts Efforts “by every means” should be made to rescue those trapped, Hu, who was at a summit meeting this week in Washington, and Wen said in a statement posted on the central government’s Web site . Authorities have dispatched several thousand rescue workers, police, firefighters, soldiers and medical workers to the area, and Vice Premier Hui Liangyu flew in to oversee relief efforts. China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd. are working to restore phone connections, Xinhua reported. President Barack Obama ’s administration released a statement expressing condolences to the families of victims and offering help. At least one-third of the buildings at the Yushu Vocational School collapsed, including a girls’ dormitory and a multimedia center, Xinhua reported. Dozens of parents waited there for news about dozens of people believed to be trapped in the rubble. Many of the buildings in the region, which has a significant ethnic-Tibetan population, are made of wood and mud, Xinhua said. Ethic Tibetans and Uighurs, in neighboring Xinjiang province, complain that they are discriminated against by the majority Han Chinese and haven’t benefited from the country’s economic growth. Deadly clashes broke out in both regions in the past few years, undermining the central government’s main stated aim of ensuring social stability. Qinghai has a population of 5.57 million, making it among China’s smallest provinces. Its economy is only larger than Tibet’s and in land mass, the 721,000-square-kilometer province is bigger than Texas. Qinghai was used as a nuclear weapons testing site. — Michael Forsythe . Editors: John Brinsley , Julian Nundy To contact Bloomberg News staff on this story: Michael Forsythe at +86-10-6649-7580 or mforsythe@bloomberg.net

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Qinghai Earthquake Leaves 930 Dead, Missing as School Collapses Echo 2008

April 15, 2010

By Bloomberg News April 15 (Bloomberg) — China said 930 people are dead or missing after yesterday’s earthquake in a remote western part of the country. The deaths of 66 students and 10 teachers in school collapses echoed the country’s last major temblor in 2008. About 100,000 people have been displaced since the 6.9- magnitude quake flattened the town of Jiegu in Qinghai province, Zou Ming, director of disaster relief for the Ministry of Civil Affairs, said today in Beijing. Fifteen thousand homes were destroyed, 617 people are dead and 313 are missing, he said. Among the dead are children and teachers who died in demolished schools, the official Xinhua News Agency said. The collapse of classrooms in neighboring Sichuan province during a May 2008 earthquake that killed about 90,000 people sparked protests from grieving parents and accusations that corrupt officials ignored sub-standard construction practices. Hundreds of rescuers headed to the site after a damaged airstrip reopened late yesterday, said a spokesman for the Qinghai government’s news department who would only give his surname, Zhang. A single road leading to the area is too narrow for large vehicles, he said. The Ministry of Civil Affairs is sending 5,000 tents, 50,000 cotton coats and 50,000 quilts to the region, Xinhua reported. More than 85 percent of the homes were destroyed in Jiegu, an ethnic Tibetan area. Digging Through Rubble China Central Television showed residents digging through rubble with their hands. Others struggled through fire and smoke to reach people trapped under a collapsed hotel. Temperatures were forecast to drop as low as minus 3 degrees Celsius (26.6 degrees Fahrenheit) in the mountainous region on the Tibetan Plateau, more than 4,000 meters (13,123 feet) above sea level. Electricity to the area has been cut, roads damaged and telecommunications disrupted. A local reservoir cracked, and workers are trying to prevent water flooding out, Xinhua said. The Red Cross is helping the government with search and rescue and has provided thousands of relief tents, said Paul Conneally, a spokesman for the International Federation of Red Cross and Red Crescent Societies in Geneva. Taiwan, which has been governed separately from mainland China since 1949, is sending a 23-person team to the area, Xinhua reported. ‘By Every Means’ Efforts “by every means” should be made to rescue those trapped, President Hu Jintao , who was at a summit meeting this week in Washington, and Premier Wen Jiabao , said in a statement posted on the central government’s Web site . Authorities have dispatched several thousand rescue workers, police, firefighters, soldiers and medical workers to the area, and Vice Premier Hui Liangyu flew in to oversee relief efforts. China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd. are working to restore phone connections, Xinhua reported. U.S. President Barack Obama ’s administration released a statement expressing condolences to the families of victims and offering help. At least one-third of the buildings at the Yushu Vocational School collapsed, including a girls’ dormitory and a multimedia center, Xinhua reported. Dozens of parents waited there for news about dozens of people believed to be trapped in the rubble. Many of the buildings in the region, which has a significant ethnic-Tibetan population, are made of wood and mud, Xinhua said. Ethnic Complaints Ethic Tibetans and Uighurs, in neighboring Xinjiang province, complain that they are discriminated against by the majority Han Chinese and haven’t benefited from the country’s economic growth. Deadly clashes broke out in both regions in the past few years, undermining the central government’s main stated aim of ensuring social stability. Qinghai has a population of 5.57 million, making it among China’s smallest provinces. Its economy is only larger than Tibet’s and in land mass, the 721,000-square-kilometer province is bigger than Texas. Qinghai was used as a nuclear weapons testing site. — Michael Forsythe Editors: John Brinsley , Bill Austin To contact Bloomberg News staff on this story: Michael Forsythe at +86-10-6649-7580 or mforsythe@bloomberg.net

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China Said to Halt Import Permits for Argentina Soybean Oil as Rift Grows

April 11, 2010

By Bloomberg News April 11 (Bloomberg) — China stopped giving import permits for soybean oil from Argentina as a trade rift between the two nations widens, four executives familiar with the matter said. The Ministry of Commerce’s computer system for processing permit applications isn’t functioning and the ministry didn’t say when it would be operational, said the people, who declined to be named because they’re not authorized to speak publicly. China is the world’s biggest soybean oil buyer. The central government assumed full control for Argentine soybean oil imports from the provinces from April 1. The move was in response to Argentina’s anti-dumping investigations on Chinese goods ranging from steel pipes to textiles, according to a Chinese state-backed trade group. An Argentine delegation visiting Beijing this week failed to reach agreement on the matter as China’s government said the import issues are related to oil quality, the people said. China is likely to maintain its curbs in the near term, the executives said. The government isn’t restricting Argentine soybean oil imports and the decision to centralize import permit management is to further monitor Argentine oil, a press official at the commerce ministry, who asked not to be named, said in a telephone interview yesterday. A separate official at the ministry denied the government had stopped accepting import permit applications, in an interview in Beijing today. He said to his knowledge the online system is still working and China’s general position on Argentine soy hasn’t changed, while declining to be identified. The Argentine embassy was closed and unable to be contacted by phone. Cargo Canceled The move comes as domestic rapeseed crops are about to be harvested and imports of soybeans are projected to reach a record, so the China vegetable oil market is well supplied, the executives said. China and Argentina may be able to resolve the dispute, Cheng Guoqiang , deputy head of the State Council’s Development & Research Center, said at a conference today in Beijing. A state-owned company canceled one Argentine cargo this week, weighing about 10,000 tons, one of the executives said. Two were redirected to other countries because buyers were concerned they would be rejected on arriving in China, he said. Two shipments are expected to arrive in China this month after they departed Argentina before the announcement on March 31, and traders are waiting to see how those cargoes are handled by the authorities, the people said. Traders will have to rework contracts that have already been signed with Argentine suppliers, one executive said. Argentina is China’s biggest supplier of soybean oil and China is the Latin American nation’s biggest buyer. The government of Argentina collected $600 million in export taxes on the cooking oil sold to China, two of the people said. — William Bi , with assistance from Li Yanping . Editors: Tom Kohn , Garfield Reynolds . To contact the Bloomberg News staff on this story: William Bi in Beijing at wbi@bloomberg.net

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Mazda Mining Phelps’s Chinese Gold as Automakers Press for Brand Loyalty

March 10, 2010

By Bloomberg News March 10 (Bloomberg) — After 8.6 million Chinese bought their first cars last year, General Motors Co., Volkswagen AG and Ford Motor Co. are positioning themselves to compete for return customers. The number of car models in China’s showrooms quadrupled in the past six years, forcing companies to fight for attention by unveiling vehicles at the Imperial Ancestral Temple in Beijing and the Great Wall outside the capital, and by paying Olympic gold medalist Michael Phelps millions of dollars. “It is clear that brands are still in the forming process,” said Joerg Mull , chief financial officer for Volkswagen AG’s China unit. “One of the keys for success in China in the long run is brand building and brand establishment.” About 83 percent of Chinese buyers last year purchased their first vehicle, said the State Information Center, a research arm of the government’s National Development and Reform Commission. At stake for China’s more than 130 carmakers is winning loyal customers in world’s largest automobile market. Sales in the country surged 46 percent to 13.6 million last year, according to the China Association of Automobile Manufacturers . In the U.S. , sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp. Biggest Getting Bigger This year, sales in China may rise more than 10 percent to about 15 million vehicles, Chang Xiaocun , head of the Ministry of Commerce’s market construction department, said Jan. 29. Customers choose from 221 models, more than double the total of 2008 and more than quadruple that of 2004, the manufacturers association said. “You’ve got to create the right image, you’ve got to market it aggressively,” General Motors’ China President Kevin Wale said after the company and Chinese partner SAIC Motor Corp. launched their Buick Excelle XT in Shanghai with musicians, videos and a contemporary dancer bathed in red and purple lights. “As competition increases, you need to be more creative, more innovative in the way you get to your customers.” China requires overseas carmakers to work with local partners, who must own at least half of the joint ventures. The most popular car produced by these partnerships was the Excelle , which sold 241,100 units last year. Buffett’s BYD The overall best-selling car was the F3 compact from Shenzhen-based BYD Co. , whose minority investors include Warren Buffett . Sales totaled 291,000. Car buyers in China tend to be younger than those in the U.S., Wale said, so the Internet is a key part of an automaker’s marketing strategy. The average Buick customer in China is 28, married and a college graduate. His U.S. counterpart is 66 and doesn’t have a degree, General Motors China said in an e-mail. China is the world’s largest Web market with 396 million users last year, according to New York-based EMarketer Inc. That number will grow to 840 million, or 61 percent of the country’s population, by 2013, EMarketer forecasted. “Chinese consumers are really Internet savvy,” said Nigel Harris, general manager of Ford’s venture with Chongqing Changan Automobile Co. , which is increasing its marketing spending by more than 10 percent. Olympian Endorsement “They talk to each other through the Internet. Word of mouth is really critical in this market.” Companies place ads on social networking sites and use billboards and posters that redirect 3G phones to Web sites when photographed, Harris said. GM’s partnership spent 10.99 million yuan on online advertising in December, the most among car companies, according to IResearch Consulting Group , a Beijing-based organization studying customer behavior in Internet media. Its “more energetic” campaign of Web videos , pop-ups and banners targets consumers 25 to 40 years old, Wale said. FAW-Volkswagen Automobile Co. , a joint venture involving Changchun-based China FAW Group Corp. and Volkswagen, of Wolfsburg, Germany, came in second, spending 10.81 million yuan. Mazda Motor Corp. based in Hiroshima, Japan, aimed for younger drivers by hiring Phelps, who won a record eight gold medals in swimming at the Beijing Olympics in 2008. Its China venture paid him 20 million yuan ($2.93 million) to endorse the Mazda 6 sedan last year. Used-Car Salesmen It was the largest single sponsorship in China for a Western celebrity, Dynamic Marketing Group’s DMG Entertainment unit said when the deal was announced in January 2009. Other celebrity endorsers include movie stars Jackie Chan and Zhang Ziyi , and Olympic champion Liu Xiang . “Brand loyalty is not as strong as you see in other countries,” said John Bonnell , senior director with J.D. Power Asia Pacific in Bangkok. “There is a feeling of experiment and a feeling of interest in new, hot models.” Automakers also are focusing more on used-car sales, which rose 28 percent last year to 4.1 million units, according to the Ministry of Commerce. Daimler AG and Bayerische Motoren Werke AG are building dealer networks to entice customers to trade in old models for new ones and to try to make luxury cars more affordable. Daimler AG started its Star Elite network in November and plans to have as many as 30 second-hand dealers in China. Changan Ford plans to open as many as 18 used-car outlets by June, Harris said. “That will certainly build brand loyalty,” he said. “It’s going to help customers considerably if you have a good way to handle the used-car market.” — Tian Ying in Beijing and Stephanie Wong in Shanghai. Editors: Michael Tighe , Bret Okeson . To contact Bloomberg News staff for this story: Tian Ying in Beijing at +86-10-6649-7571 or ytian@bloomberg.net ; Stephanie Wong in Shanghai at +86-21-6104-7029 or swong139@bloomberg.net .

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India’s Economy May Grow 8.2% Next Year, Creating Room for Stimulus Exit

February 25, 2010

By Cherian Thomas and Kartik Goyal Feb. 25 (Bloomberg) — India’s economic growth may accelerate to as much as 8.2 percent in the year starting April 1, providing room for a “gradual rollback” of fiscal stimulus, the finance ministry said before tomorrow’s budget. “The economy has posted a remarkable recovery from the global recession,” according to the annual Economic Survey prepared by officials advising Finance Minister Pranab Mukherjee , which was released in New Delhi today. “The recovery creates scope for a gradual rollback, in due course, of some of the measures undertaken over the last 15 to 18 months.” Mukherjee may raise excise tax by 2 percentage points and the service tax to 12 percent from 10 percent, Goldman Sachs Group Inc. said last week. India and China, the world’s fastest growing major economies, are withdrawing stimulus as consumer demand strengthens, stoking inflation and asset bubble concerns. India’s benchmark wholesale-price inflation accelerated to 8.6 percent in January, the fastest pace since October 2008. In China, where the economy grew 10.7 percent last quarter, property prices have surged 9.5 percent in January, the most in 21 months, as total new loans surged to 1.39 trillion yuan ($204 billion), more than in the previous quarter combined. Sixty percent of India’s inflation reading is contributed by food items after monsoon rains were deficient last year, the ministry said. Since December 2009, there have been signs of food-price inflation spreading to manufactured goods and services, the ministry said. “Inflation management therefore should involve controlling the demand situation as well as reining in inflationary expectations through various monetary measures,” the Indian finance ministry said. Budget Deficit Mukherjee is scheduled to unveil the budget for the fiscal year starting April 1 tomorrow at 11 a.m. in parliament in New Delhi. He had cut excise tax by 4 percentage points and stepped up government spending on roads and power since December 2008 to support the economy amid a global recession. The budget deficit may widen to 6.5 percent of GDP in the year ending March 31, a 16-year high, the ministry estimated today. India’s central bank governor Duvvuri Subbarao last month said the government must withdraw fiscal stimulus steps and cut the budget deficit to help cool inflation. The central bank, on its part, last month raised the proportion of deposits that lenders need to maintain as cash reserves to 5.75 percent from 5 percent to contain inflation. India must cut its debt to 68 percent of GDP by March 2015 from the current 82 percent, the ministry said, citing recommendations of the 13th Finance Commission, a government panel appointed to suggest a roadmap to reduce government debt. Savings Rate Mukherjee can start to reverse tax cuts as India’s $1.2 trillion economy may “breach” the 9 percent growth pace by March 2012, the finance ministry said, citing the country’s savings rates that now match those in Japan, South Korea and Malaysia. The economy may grow 7.2 percent in the year ending March 31, the nation’s statistics department said today. India’s savings rate is at 32.5 percent of gross domestic product compared with 28 percent in Japan, 30 percent in South Korea and 38 percent in Malaysia, according to the report. “Since these indicators are some of the strongest correlates of growth and do not fluctuate wildly, they speak well for India’s medium-term growth prospects,” the ministry said. “The savings rate is likely to rise further as the demographic dividend begins to pay off in India.” The finance ministry estimates 440 million Indians out of a total population of 1.2 billion are under the age of 18. India’s population will rise to 1.7 billion by 2050 and will overtake China as the world’s most populous nation, according to the United Nations. Rising Demand “It is entirely possible for India to move into the rarified domain of double-digit growth and even attempt to don the mantle of the fastest-growing economy in the world within the next four years,” the finance ministry said. Rising demand helped Tata Motors Ltd. , India’s largest truckmaker, post a 68 percent gain in sales in the three months ended December, while sales at Bajaj Auto Ltd, the second- largest motorcycle maker, more than doubled in January. Still, expansion in gross capital fixed formation, a proxy for investment growth, is at 5.2 percent, below the economic growth rate. That makes it necessary to watch the growth recovery in private investment in the fiscal third and fourth quarters while scaling back fiscal stimulus, the ministry said. To contact the reporters on this story: Cherian Thomas in New Delhi at cthomas1@bloomberg.net ; Kartik Goyal in New Delhi at kgoyal@bloomberg.net .

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Expats Bound for Jobs in India Run Up Against `Out of Line’ Visa Limits

February 12, 2010

By Saikat Chatterjee Feb. 12 (Bloomberg) — T.V. Mohandas Pai says he wants to hire more expatriates for Infosys Technologies Ltd. , India’s second-largest software exporter, as the global economic recovery boosts sales. Stricter visa rules prompted by unskilled Chinese workers are holding him back. Infosys has about 20 foreign workers and needs “many more” to help it expand abroad, said Pai, who runs the Bangalore-based company’s human resources department. Companies in Asia’s third-biggest economy are using annual growth averaging 8.7 percent in fiscal years 2006-2009 to reverse a decades-long “brain drain” to the U.S. and Europe. The government toughened regulations for foreign workers last year after discovering that about 40,000 Chinese building power plants used business visas instead of employment visas, skirting taxes and taking jobs from locals. The crackdown restricted employment visas to skilled people in senior jobs and limited foreigners to 1 percent of a project’s workforce. “We need to get expats to help us understand the complexity of businesses,” Pai said. “But instead of helping, the government has tightened the visa rules. The problem in India is policymakers are totally out of line with reality.” Building Power Plants India is attracting foreign workers facing jobless rates of 9.7 percent in the U.S. and 10 percent in the 16-nation euro region. India doesn’t regularly release unemployment data. Little attention was paid to visas in the past decade as the government sought investments from abroad. The number of registered foreign nationals more than doubled to 351,999 in 2007 from 137,474 the year before, according to the latest data from the Ministry of Home Affairs Web site . Three power plants being built by billionaire Anil Ambani’s Reliance Power Ltd. placed orders with Shanghai Electric Group Co. Lanco Infratech Ltd. awarded a contract for its 1,015- megawatt plant to Deyang, China-based Dongfang Electric Corp. “It has come to the notice of the government that a large number of foreign nationals, including Chinese, were coming for execution of projects/contracts in India on Business Visas instead of the Employment Visas,” Harish Rawat, junior minister for labor, said Dec. 16 in a written response to lawmakers. Foreign workers without employment visas aren’t paying taxes, said Amitabh Singh, a partner at Ernst & Young Pvt. in New Delhi. 7.2 Percent Growth The government forecasts economic growth will reach 7.2 percent in the year ending March. India recorded the highest average pay increase in the Asia-Pacific region in 2009 at 6.3 percent, Lincolnshire, Illinois-based Hewitt Associates Inc. said in October. “It has become a hot destination,” said Jeffrey Joerres , chief executive officer of staffing company Manpower Inc. “India and China are on the front end of the recovery.” Infosys is benefiting from a strong rebound in the financial services industry, Chief Executive Officer S. Gopalakrishnan said Jan. 28. The company on Jan. 12 reported profit that beat analysts’ estimates and raised its annual revenue forecast. Sales may rise as much as 2 percent to $4.76 billion in the year ending March 31, compared with an earlier prediction of a 1.3 percent drop. ‘Hard Work, Sacrifice’ Matthew Barney, 40, left Wisconsin a year ago and moved his family near Bangalore to become head of leadership development for Infosys. “Indian culture today is similar to the original cultural values that drove the U.S.,” said Barney, whose wife is Indian. “Both value hard work and sacrifice today for the next generation to have a better standard of living.” India’s travel and tourism economy is expected to grow 7.7 percent a year in real terms from 2010 to 2019, according to a 2009 report by the World Travel & Tourism Council. Gurgaon-based Air Works India Engineering Pvt. hired American Todd Hattaway as president of airline maintenance last year. “Aviation is developing so fast and to be a major part of that will definitely enhance my career,” Hattaway said. Deepak Gupta , country head and managing director of executive-search firm Korn/Ferry International , said the new rules may dim India’s attractiveness to foreign workers. “The visa system has to be made more friendly,” Gupta said. “It’s not going to help make India a global employment destination.” Favoring Indians The government said Nov. 25 that employment visas would only be granted to professionals including technical experts, senior executives and managers. The visas “will not be granted for jobs for which a large number of qualified Indians are available,” M. Ramachandran, a Home Affairs junior minister, said in a written statement to parliament. The Ministry of Labour and Employment said foreign nationals cannot total more than 1 percent of a workforce, with between five and 20 allowed on a project. The Chinese government received numerous complaints from companies and said, “We hope India will be considerate of the circumstances of Chinese firms there,” state-run China Daily reported Nov. 3. In December, India amended the rules to allow up to 40 foreigners on power and steel projects through June. Companies seeking more overseas workers need labor ministry approval. Pai said limiting foreigners will do more harm than good. “We need substantial relaxation in work permit policies,” he said. “India needs to get many, many more expats.” To contact the reporters on this story: Saikat Chatterjee in New Delhi at schatterjee4@bloomberg.net .

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Russia Says Iran Nuclear Enrichment Breaches UN, Raises Doubts on Purpose

February 9, 2010

By Paul Abelsky Feb. 9 (Bloomberg) — Iran’s decision to increase uranium enrichment violates United Nations Security Council resolutions and “raises doubts” about the purpose of the country’s nuclear program, Russia’s Foreign Ministry said. Russia is “disappointed” by Iran’s decision to forgo “diplomatic” offers to allay international concerns about how the country plans to use its nuclear know-how, the ministry said on its Web site today. To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net

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China to Impose Anti-Dumping Penalties on U.S. Chicken Imports After Probe

February 5, 2010

By Bloomberg News Feb. 5 (Bloomberg) — China will impose anti-dumping measures on imports of some chicken products from the U.S. after an investigation showed they had harmed local producers, the Ministry of Commerce said. Importers of U.S. broiler chicken products will be required to pay a deposit based on the extent of their trade violation, the ministry said in a statement on its Web site citing a preliminary ruling. The measure will become effective Feb. 13, it said. The ruling threatens to deepen a trade rift between the U.S. and China, which began the investigation into whether the U.S. sold poultry for below-market prices in September, two weeks after the U.S. imposed tariffs on tire shipments from the Asian nation. Ties have further soured over proposed arms sales to Taiwan and President Obama’s plans to meet with the Dalai Lama later this month. “This is probably a result of political tension, although a trade war between the two economies is unlikely,” Li Qiang, managing director of Shanghai JC Intelligence Co., said by phone. China consumed nearly 800,000 metric tons of U.S. chicken in 2008, valued at $722 million, according to the USA Poultry & Egg Export Council. Beijing launched the probe in response to President Barack Obama administration’s decision to impose tariffs on imports of Chinese tires and a decision by Congress that effectively bans imports of cooked poultry, James Sumner, president of the poultry export council, said Sept. 14. Jim Rice, China general manager of Tyson Foods Inc., declined to comment when reached by phone. China’s trade relations with the European Union have also been strained, with Beijing yesterday complaining to the World Trade Organization against the European Union’s anti-dumping measures targeting Chinese-made leather shoes. For Related News and Information: Top Stories:TOP China agriculture stories: TNI CHINA AGR China-U.S. trade stories: TNI CHINA US TRD

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Japan Finance Minister Fujii Hospitalized for High Blood Pressure, Fatigue

December 27, 2009

By Kyoko Shimodoi and Toru Fujioka Dec. 28 (Bloomberg) — Japanese Finance Minister Hirohisa Fujii , 77, has been admitted to hospital for high blood pressure and exhaustion following work on the government’s budget, a Finance Ministry official said. Fujii will be hospitalized for about 10 days, said the official, who spoke on the condition of anonymity. He will still attend Cabinet meetings scheduled for Dec. 30 and Jan. 5, the person said. “This won’t have any impact on the economy or markets,” given that the budget has been released and traders aren’t on alert for intervention in the currency market, said Kyohei Morita , chief economist at Barclays Capital in Tokyo. The finance chief was asked by Prime Minister Yukio Hatoyama to postpone retirement and run in an August election that brought the Democratic Party of Japan to power for the first time. Fujii, a former finance ministry budget examiner, previously headed the ministry in 1993. To contact the reporter on this story: Kyoko Shimodoi in Tokyo at kshimodoi@bloomberg.net ; Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Chinese Foreign Direct Investment Jumps 32% on Lure of Economy’s Recovery

December 15, 2009

By Bloomberg News Dec. 16 (Bloomberg) — Foreign direct investment in China climbed at the fastest pace in 16 months in November, aiding the recovery in the world’s third-largest economy. Investment rose 32 percent from a year earlier to $7.02 billion, the Ministry of Commerce said at a briefing in Beijing today. That compared with a 5.7 percent increase in October. Investment fell 9.9 percent in the first 11 months of the year, the government said. China’s economy grew at the fastest pace in a year in the third quarter and the expansion will be 9.3 percent in 2010, according to the median forecast of a Bloomberg News survey of analysts. Fast-growing developing nations will lure funds away from advanced economies for the next 10 to 20 years, according to Thomas Deng , head of China strategy at Goldman Sachs Group Inc. in Hong Kong. “China’s recovery, and especially the expanding consumer market, will continue to attract foreign investors,” said Xing Ziqiang , an economist at China International Capital Corp. in Beijing. “The Chinese market may be the brightest spot for growth for many multinational companies this year.” Luxury car maker Bayerische Motoren Werke AG said last month that it will build a new factory worth 5 billion yuan ($732 million) in China to tap an auto market set to overtake the U.S. as the world’s largest. Foreign direct investment will grow steadily in the next few months and may stay within the $7 billion to $8 billion monthly range attracted since August, the ministry said. Accelerating Pace “China’s long-term growth potential is bringing foreign capital into the country at an accelerating pace in the second half,” said Dariusz Kowalczyk , chief investment strategist at SJS Markets Ltd. in Hong Kong. Inflows of foreign direct investment have climbed for four months and that bodes well for private investment in a country that this year has garnered most of its growth from government- linked investment, said Kowalczyk. “It’s important for policy makers to see that the private sector can pick up the baton at some point,” he said. “The fact that the foreign private sector is recovering and investing quite a lot is definitely positive.” Developing economies will expand 5.1 percent in 2010 compared with 1.3 percent in advanced nations, according to the International Monetary Fund . China’s industrial output grew more than economists estimated last month and exports fell the least in 13 months, confirming the nation’s role as the leader of the world recovery. In China, gross domestic product will expand 10.5 percent this quarter, helping the government to top its 8 percent target for the year, according to the median estimate of 38 economists. The Shanghai Composite Index has gained more than 80 percent this year. — Li Yanping , Kevin Hamlin . Editors: Paul Panckhurst , Lily Nonomiya To contact Bloomberg News staff for this story: Li Yanping in Beijing at +86-10-6649-7568 or yli16@bloomberg.net

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Blair Tells BBC He Would Have Supported Iraq War Without Nuclear Evidence

December 12, 2009

By Caroline Alexander Dec. 12 (Bloomberg) — Former British Prime Minister Tony Blair would have favored removing Saddam Hussein from power even with no evidence that the Iraqi leader had weapons of mass destruction, he said in an interview with the British Broadcasting Corp. “I would still have thought it right to remove him,” Blair said when asked if he would have backed a war against Iraq knowing that Hussein didn’t have nuclear weapons. “Obviously, you would have had to use and deploy different arguments” to justify the war to lawmakers and the public, he told the BBC. The possibility that Hussein had nuclear weapons was only one factor behind his decision to support the U.S.-led invasion in March 2003, Blair said. The “notion” that Hussein presented a threat to the region was “uppermost” in his mind, he said. Blair has justified the invasion on the grounds that Hussein was in breach of United Nations-backed demands that his country abandon its weapons of mass destruction program. The former British leader said he sympathized with people opposed to the war, adding “but for me, you know, in the end I had to take the decision” and “I can’t really think we’d be better with him and his two sons still in charge.” Blair, who is now Middle East envoy for the so-called Quartet of the United Nations, is due to give evidence early next year to a British inquiry into his government’s decision to go to war against Iraq. He denied religion played a role in it, saying his faith had only sustained him through a very “difficult time.” Britain sent 40,000 troops to Iraq, the second largest contingent behind the U.S., contributing to a loss of support for Blair that played into his decision to step down in 2007. British combat troops carried out their last patrol in Iraq on April 30 and have left the country, according to the Ministry of Defence. The conflict claimed the lives of 179 British service personnel . The interview will be broadcast tomorrow on BBC One’s Fern Britton Meets interview program at 10 a.m. local time. A transcript was e-mailed to Bloomberg News. To contact the reporter on this story: Caroline Alexander in London at calexander1@bloomberg.net

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Argentina Is Said to Plan Release of Debt-Restructuring Details in January

December 9, 2009

By Drew Benson Dec. 9 (Bloomberg) — Argentina plans to unveil details of its plan to swap $20 billion of defaulted debt in January after the U.S. Securities and Exchange Commission approves documents for the offer, an Economy Ministry official said. President Cristina Fernandez de Kirchner will likely sign a decree this week to expand a 2005 bond program, allowing the government to file the paperwork with U.S. regulators, said the official, who spoke on the condition that he not be identified in accordance with government policy. The documents may be filed with the SEC as soon as next week, he said in Buenos Aires. To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net

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German Industrial Production Unexpectedly Fell in October, Dropping 1.8%

December 8, 2009

By Frances Robinson Dec. 8 (Bloomberg) — German industrial output unexpectedly fell for the first time in three months in October, led by a drop in production of energy and of investment goods such as machinery. Output decreased 1.8 percent from September, when it advanced 3.1 percent, the Economy Ministry in Berlin said today. Economists forecast a 1 percent gain, according to the median of 38 estimates in a Bloomberg survey. From a year earlier, production declined 12.4 percent when adjusted for the number of work days. Germany’s recovery from its worst recession since World War II may slow as the impact of government stimulus measures, such as the now-expired cash-for-clunkers program, wane and a stronger euro damps exports. Factory orders unexpectedly fell for the first time in eight months in October, the ministry said yesterday, led by a decline in sales abroad. “The orders disappointed and these numbers move in sync,” said Aline Schuiling , an economist at Fortis Bank Nederland in Amsterdam. “The German industrial sector is in a strong recovery phase. One month doesn’t change that. The underlying trend remains healthy.” Manufacturing output fell 1.6 percent in October, driven by a 3.5 percent drop in production of investment goods, today’s report showed. Energy production declined 3.4 percent and construction output dropped 2.4 percent. ‘Less Dynamism’ “The overall trend for industrial production still points upward,” the ministry said in a statement. “The recovery of industrial production should continue in the fourth quarter, albeit with less dynamism.” German stocks erased gains after the report and yields on German two-year bonds extended their decline to 1.25 percent at 12:05 p.m. in Frankfurt from 1.32 percent this morning. The euro was little changed at $1.4829. The currency’s 20 percent gain since mid-February may hurt exports by making them more expensive. Daimler AG, the world’s second-largest maker of luxury cars, has said that it will shift production of its best-selling Mercedes-Benz C-Class model to Alabama to reduce its reliance on German factories and take advantage of the cheaper dollar. Chancellor Angela Merkel’s government is spending about 85 billion euros ($126 billion) on measures to stimulate growth, including a 2,500-euro payment for people who junk an old car to buy a new one. That subsidy expired in September. The Bundesbank nevertheless on Dec. 4 raised its growth forecasts, saying that exports, business investment and private consumption will grow in importance as fiscal stimulus measures expire. It expects gross domestic product to increase 1.6 percent next year after dropping 4.9 percent this year. German economic growth accelerated to 0.7 percent in the third quarter from 0.4 percent in the second, when it pulled out of recession. Business confidence increased to a 15-month high in November, suggesting the economic recovery may gather pace next year. To contact the reporter on this story: Frances Robinson in Frankfurt at frobinson6@bloomberg.net

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Baghdad Car Bombings, Attacks Leave More Than 100 People Dead, Dozens Hurt

December 8, 2009

By Caroline Alexander Dec. 8 (Bloomberg) — More than 70 Iraqis were killed and dozens injured in five separate attacks across Baghdad, state- owned al-Iraqiya television reported. Today’s assaults are the worst in the capital since Oct. 25, when twin bombings killed at least 90 people. Al-Iraqiya said the districts of Mansour, al-Qahira and Dura were among those hit. The state broadcaster didn’t provide further details. Agence France-Presse later put the death toll at 101. The attacks included car bombings, with the first in Dora at about 10 a.m. local time, CNN said. Another car bomb exploded at the Ministry of Labor and Social Affairs, while others took place in the busy commercial areas of Nahdha and al-Qashla Square. A fifth bomb blew up outside the Karkh Civil Court in western Baghdad’s Mansour district, CNN reported. During an upsurge in violence this year, attackers have targeted Iraqi government buildings, security forces, the majority-Muslim Shiite population and the Kurdish-dominated northern cities of Mosul and Kirkuk. The bloodshed, blamed by the government on al-Qaeda and supporters of the late dictator Saddam Hussein , underscores the fragility of security since U.S. troops withdrew from urban areas on June 30 and as the country prepares for elections next year. To contact the reporter on this story: Caroline Alexander in London at calexander1@bloomberg.net .

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Yen Options Signal Fujii Intervention Threats No Barrier to Weaker Dollar

November 29, 2009

By Oliver Biggadike and Bo Nielsen Nov. 30 (Bloomberg) — Options traders are adding to bets the yen will rise against the dollar even after the Ministry of Finance pledged to “do what is necessary” to stem gains following a surge to a 14-year high. Contracts granting the right to buy the yen versus the dollar rose last week to a 2.1 percentage-point premium relative to options for selling Japan’s currency, according to Bloomberg data. The odds of the yen strengthening past 84.83 per dollar, the highest since July 1995, to 84.5 by the end of March rose to 80 percent, options data compiled by Bloomberg show. Finance Minister Hirohisa Fujii said on Nov. 27 in Tokyo his nation will “do what is necessary” and he may contact U.S. and European officials to act, raising speculation that officials will intervene in foreign-exchange markets for the first time since 2004. The yen’s 14 percent advance against the dollar since April 6 threatens profits at exporters from Sony Corp. to Toyota Motor Corp. “Dollar-yen at the moment is very much a momentum play,” said Henrik Gullberg , a foreign-exchange strategist at Deutsche Bank AG in London. “Right now Japan needs demand from abroad in terms of stimulus for the economy. The timing isn’t very good for a significant yen appreciation when the real economy is in the current fragile state.” The yen climbed to 84.83 on Nov. 27, before closing at 86.53 in New York. The currency has gained 4.1 percent this month, the fastest pace since the peak of the financial crisis in December, and has strengthened from 100.99 in April. Threat to Credibility Japan, which depends on exports for about 12 percent of its economy, compared with 6 percent in the U.S., will probably have to sell its currency if warnings from government officials fail to deter traders from pushing the yen higher, Barclays Plc analysts said in a note to clients. Perceptions that officials’ comments are an “empty threat” would strengthen Japan’s currency to 85 against the dollar, Masafumi Yamamoto and Yuki Sakasai at Barclays in Tokyo wrote in a Nov. 27 report. Japan hasn’t intervened by purchasing or selling the yen to influence exchange rates since March 16, 2004, when it traded around 109 per dollar. The Bank of Japan sold 14.8 trillion yen ($172 billion) in the first three months of 2004, after record sales of 20.4 trillion yen in 2003. “The intervention game is coming alive,” said Jens Nordvig, a managing director of currency research in New York at Nomura International Plc, a unit of Japan’s biggest securities firm. “Between 80 and 85, intervention becomes much, much more likely. Clearly this is a problematic level and a lot of exporters are feeling a lot of pain around here.” The yen may trade as high as 83 per dollar at the beginning of next year, Nordvig predicted. Depreciating Profits The yen’s gains may cause exporters to miss their earnings forecasts as dollar-denominated profits depreciate. Toyota, Sony and Canon Inc. , which generate more than 70 percent of their revenue outside Japan, projected average values of 90 to 95 yen per dollar for this fiscal year when estimating income. Toyota Executive Vice President Takeshi Uchiyamada said at the Tokyo Motor Show on Oct. 21 that the car company is considering increasing production outside Japan as the yen strengthens. Japan’s Topix benchmark of more than 1,600 shares fell 5.6 percent this year, the only decline among 22 Asian indexes tracked by Bloomberg. The Standard & Poor’s 500 climbed 21 percent and Germany’s DAX advanced 18.2 percent. The Topix posted its fifth weekly decline in the five days ended Nov. 27, the longest stretch of losses since July 2008. “I’m sure there will be conversation among officials,” said Richard Benson, who helps oversee $11 billion of currency funds at Millennium Global Asset Management in London. “There will be some form of verbal or physical intervention to try to slow the move down because abrupt underperformance in Japanese asset markets is not acceptable.” Disorderly Swings Officials at the Federal Reserve and Japanese Ministry of Finance say they distinguish between orderly and disorderly swings in the value of their currencies. Fujii has said at least three times since Nov. 26 that the government may take “action” on any “abnormal” currency moves, a wording officials have used previously to try to curb the yen’s advance. The Fed described the dollar’s decline as “orderly” in the minutes of its Nov. 3-4 meeting released on Nov. 24. Yen volatility surged last week, increasing 3.1 percentage points, the most in 10 months, to 14.2 percent, one-month dollar-yen options prices show. “The last 48 hours have been anything but orderly,” Jeremy Stretch, a senior currency strategist at Rabobank International, said in a Nov. 27 interview from London. “The best thing the Bank of Japan can hope for is that risk appetite recovers.” To contact the reporters on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net ; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net

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Vietnam to Offer $1 Billion of Bonds for Energy, First Sale in Four Years

November 18, 2009

By Beth Thomas and Nguyen Dieu Tu Uyen Nov. 19 (Bloomberg) — Vietnam plans to fund energy projects with a $1 billion bond, its first since an inaugural sale in 2005, Deputy Prime Minister Nguyen Sinh Hung said. The government is pushing ahead with the offering after a delay of two years amid signs of improving markets. “We are aiming at $1 billion for the sale, however, it will be decided based on specific projects,” Hung, 63, said in an interview yesterday in Hanoi. The government, as part of a two-decade-old reform process known as ‘doi moi,’ or renovation, is raising funds to build roads and power plants as Vietnam’s population is set to expand 40 percent to 120 million by 2050. Annual economic growth may quicken to as much as 8 percent from 2011, Hung said. “It’s a good time for an issuer like Vietnam to come to the market,” said Pierre Naim , owner of Nassau, Bahamas-based Rainbow Advisory Services, a hedge fund that oversees about $80 million, mostly in emerging-market bonds. “Vietnam is not necessarily seen as one of Asia’s top-quality issuers, but people are looking for yield.” Vietnam in October 2005 raised $750 million by selling 10- year bonds, then lent the proceeds to Vietnam Shipbuilding Industry Corp., known as Vinashin. Emerging-market companies and governments have sold $555 billion of bonds this year, 70 percent more than last year and greater than the previous record of $367 billion in 2007, according to Bloomberg data. 12-Month Decline The average yield on emerging-market government debt has dropped about 270 basis points to 6.514 percent this year, heading for the biggest 12-month decline since JPMorgan Chase & Co. started tracking the data in 1998. A basis point is 0.01 percentage point. Qatar received $28 billion of orders for a $7 billion bond sale on Nov. 17, the largest offering from an emerging-market government on record, Barclays Capital said. Hung declined to say if funds from the latest sale would be loaned to Electricity of Vietnam, the national power utility, or Vietnam Oil & Gas Group, known as PetroVietnam. Electricity of Vietnam said in June it bought power from China to meet demand. Dollar Shortage The funds raised from Vietnam’s second bond may help ease a shortage of dollars in the country, Hung said. “This bond sale will help our local currency to some extent, since the proceeds will be in the U.S. dollar and part of it will be converted into dong to spend domestically, so it will increase supply of foreign exchange,” Hung said. Vietnam’s foreign-exchange reserves fell to about $16.5 billion as of August, from $23 billion at the end of 2008, because of moves by Vietnam’s central bank to try to stabilize the currency, the World Bank said in a semi-annual report this month. The dong has weakened 2.2 percent this year, and yesterday reached a record low of 17,875 against the dollar. The bond sale will also “develop a new channel to raise funds for companies as the government will set an example for businesses to go abroad for corporate bond issuance,” said Hung, who has been deputy premier since June 2006. PetroVietnam said in June it may sell at least $1 billion of bonds abroad next year. Vinashin is also planning an overseas bond sale of as much as $400 million to build ships and ports. More Debt Sales? Hung oversaw Vietnam’s first overseas bond sale as finance minister under Prime Minister Phan Van Khai’s administration, when Vietnam opened a stock market and increased privatizations of state-owned companies. The 6.875 percent securities traded at 3.26 percentage points more than equivalent-maturity Treasuries as of Nov. 17, according to data compiled by Bloomberg. The bonds were issued at 2.56 percentage points more than U.S. government debt. Vietnam is rated Ba3 by Moody’s Investors Service, three levels below investment grade. Vietnam aims to sell $1 billion of securities by early 2010, Nguyen Thanh Do , head of the external financing and debt administration department at the Ministry of Finance, said on Nov. 3. Prime Minister Nguyen Tan Dung asked the Ministry of Finance to choose an “appropriate timing” for the sale. “Their window of opportunity is quite narrow, I would say within the next six months,” Rainbow Advisory’s Naim said. “We’re going to see higher inflation and interest rates, so if the Vietnamese government wants to borrow cheaply, now is the time to do it.” Pressure on Interest Rates Pressure is mounting on State Bank of Vietnam Governor Nguyen Van Giau to raise the benchmark interest rate , which he’s held at 7 percent since February. Consumer prices increased 2.99 percent in October from a year earlier, up from 2.42 percent in September and 1.97 percent in August. The government raised rates as high as 14 percent in June 2008, the most in Asia at the time, to curb inflation, which accelerated to as much as 28.3 percent in August that year. “It took us about a year to deal with the economic slowdown and inflation and we will still see economic growth of more than 5 percent for this year,” Hung said. “Between 2011 and 2020, the economy will resume its pace of expansion, at 7 to 8 percent a year as it was before the global crisis.” The government is targeting growth of at least 5 percent this year, and 6.2 percent to 6.5 percent next year. The $91 billion economy expanded 6.2 percent last year, after growing at a 10-year high of 8.5 percent in 2007, the year Vietnam joined the World Trade Organization. To contact the reporters on this story: Beth Thomas in Hanoi at bthomas1@bloomberg.net ; Nguyen Dieu Tu Uyen at uyen1@bloomberg.net

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Dubai Industrial City Completes Construction of extension to First Labour Village

November 4, 2009

04 Nov 200914,000-Capacity Complex Complies with UAE Ministry of Labour Regulations Dubai: Dubai Industrial City, the dedicated light and medium manufacturing destination and a member of TECOM Inves…

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China Starts Probe of U.S. Auto, Chicken Imports After Obama Tire Decision

September 13, 2009

By Bloomberg News Sept. 13 (Bloomberg) — China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation. Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site today. The ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value. The European Central Bank said last week that rising protectionism may hamper world trade and undermine the global economy’s recovery from recession. The U.S. placed tariffs starting at 35 percent on $1.8 billion of tire imports from China, backing a United Steelworkers union complaint against the second-largest U.S. trading partner. “While there’s friction, I suspect that the two nations will keep any disputes under control,” said David Cohen , an economist at Action Economics in Singapore. “They understand that they’re increasingly dependent as trading partners.” Dumping is selling goods for less than the cost of producing them. China’s commerce ministry said yesterday that it “strongly opposes” the U.S. decision on tires and may refer the case to the World Trade Organization. ‘Retaliatory Spiral’ “A sluggish global recovery and rising unemployment may increasingly tempt governments to adopt restrictive trade policy measures, which could lead to a retaliatory spiral of ever harsher trade restrictions and tensions,” the Frankfurt-based ECB said in its monthly bulletin . A resurgence of trade protectionism would “significantly impair the global recovery process” and reduce growth potential in the long run, it said. Today’s three-paragraph statement from the Chinese commerce ministry didn’t refer to the tire dispute. “China has always steadfastly opposed trade protectionism,” the ministry said, adding that the nation was “willing to continue acting in concert with other nations to promote a global economic recovery as soon as possible.” The dumping and subsidy probes involve “some” auto and chicken imports from the U.S., it said, without specifying which ones. Tire Case The U.S. decision in the tire case was a blow to Chinese producers such as GITI Tire Pte Ltd., the largest Chinese tire maker, and U.S. retailers of low-cost imports. “By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio , executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.” The U.S. duties likely won’t spark a trade war, according to White House spokesman Robert Gibbs . “For trade to work for everybody it has to be based on fairness and rules,” Gibbs said. “We’re simply enforcing those rules and would expect the Chinese to understand those rules.” To contact the Bloomberg News staff for this story: Zhang Dingmin in Beijing at Dzhang14@bloomberg.net

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China’s Government `Strongly Opposes’ U.S. Imposition of Tariffs on Tires

September 12, 2009

By Bloomberg News Sept. 12 (Bloomberg) — China “strongly opposes” a decision by U.S. President Barack Obama to impose tariffs on tire imports from China, the Asian country’s Ministry of Commerce said. The U.S. violated rules of the World Trade Organization and the tariff imposition is a breach of the commitments made by the U.S. at the Group of 20 summit, the ministry said in a statement posted on its Web site, citing spokesman Yao Jian . China will reserve the right for further reaction, it said. The U.S. government placed tariffs starting at 35 percent on tire imports from China, backing a United Steelworkers union complaint against the second-largest U.S. trading partner, according to a White House statement yesterday. The case brought by the United Steelworkers is the largest so-called safeguard petition filed to protect U.S. producers from increasing imports from China. “It is an abuse of the trade remedy measures and made an extremely bad start against the backdrop of global financial crisis,” it said. The move may harm both countries’ interests and produce a chain reaction of trade protectionism, slowing the pace of world economic recovery, it added. — Wang Ying in Beijing. Editors: Mike Millard. To contact Bloomberg News staff for this story: Ying Wang in Beijing at +86-10-6649-7562 or ywang30@bloomberg.net

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Japan’s Notes Rise, Yields Fall to 4-Year Low, After Revised Growth Report

September 11, 2009

By Yasuhiko Seki Sept. 12 (Bloomberg) — Japanese notes rose, pushing two- and five-year yields to the lowest levels since September 2005, after revised figures showed the nation’s economy grew at a slower pace than the government earlier estimated. Demand for debt increased after yesterday’s data showed gross domestic product expanded at an annual pace of 2.3 percent in the second quarter, below the 3.7 percent expansion given in the preliminary report. Banks may buy more short- and medium- term notes as they reduce corporate lending amid the fragile recovery, said Kazuhiko Sano at Nikko Citigroup Ltd. in Tokyo. “Firm demand, stemming from rising cash assets, will continue to overwhelm negative leads such as stock gains,” said Sano, whose company is one of the 23 primary dealers which are required to bid at government bond auctions. Two-year yields dropped three basis points to 0.205 percent this week at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price of the 0.3 percent note due September 2011 rose 0.059 to 100.188 yen. Five-year yields fell four basis points this week to 0.575 percent. Ten-year yields slid three basis points to 1.3 percent this week. Bond futures for December delivery advanced 0.33 to 139.15. A basis point is 0.01 percentage point. Two-year notes completed a second weekly gain after the yen reached 90.79 per dollar yesterday, the highest level since Feb. 13. A stronger Japanese currency hurts earnings at exporters. BOJ Rate Policy “The sharp appreciation of the yen will fuel concerns over the prospects for the Japanese economy and may spark speculation about additional monetary easing by the Bank of Japan,” said Eiji Dohke , chief strategist in Tokyo at UBS Securities Japan Ltd. “We recommend continuing long positions on five-year notes,” he said, referring to bets that an asset will rise. Japanese companies forecast the yen will average 94.85 per dollar in the 12 months to March 2010, according to the Bank of Japan’s quarterly Tankan survey released July 1. Since the central bank cut its benchmark rate to 0.1 percent in December, it has been buying corporate debt from lenders and offering them unlimited loans secured against collateral to channel funds to companies. The measures are scheduled to end in December. 20-Year Auction “The Bank of Japan won’t be able to hike interest rates throughout the next fiscal year ending in March 2011 and this will prompt financial institutions to keep pouring money into the debt market,” said Yuichi Kodama , chief economist in Tokyo at Meiji Yasuda Life Insurance Co., Japan’s No. 3 life insurer. Growth in bank lending, including advances by credit associations, slowed to 1.8 percent in August from a year earlier, from 2.1 percent in July, the BOJ said this week. Gains in bonds were tempered by speculation dealers will seek to push yields up to secure a higher coupon on 1.1 trillion yen ($12 billion) in new 20-year debt that the Ministry of Finance will sell on Sept. 15. Primary dealers often reduce their holdings of debt before an auction in case prices decline before they can pass on the new securities to investors. “Given strong uncertainty about the sustainability of keeping the fiscal balance healthy, yields may trend higher,” said Shinji Nomura , chief market analyst at Daiwa Securities SMBC Co., a unit of Japan’s second-largest brokerage group. Japan’s debt burden will probably spiral to 197 percent of gross domestic product next year, according to the Organization for Economic Cooperation and Development. The Finance Ministry in April said it will boost bond issuance by 15 percent to 130.2 trillion yen this fiscal year. To contact the reporter on this story: Yasuhiko Seki in Tokyo at Yseki5@bloomberg.net

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Lead Surges to Highest This Year as China Vows to Clean Up Metals Industry

September 3, 2009

By Glenys Sim Sept. 4 (Bloomberg) — Lead, the best performer on the London Metal Exchange this year, surged to the highest in almost 16 months as China vowed to shut substandard smelters after thousands of children were poisoned. There was “an explosive move in the market,” said Jiang Donglin, manager at Shenzhen Zhongjin Lingnan Nonfemet Co. ’s research department. The “possibility of lesser supply at a time when demand is fairly stable” was driving gains, Jiang wrote in an e-mail. The metal, used in batteries, has more than doubled this year, partly on concern that production may not keep pace with Chinese demand. There was a “buying panic” for lead, according to Citigroup Inc. About 35 percent of global output may have been disrupted, RBS Global Banking & Markets said. Lead for delivery in three months jumped as much as 2.9 percent to $2,345 a metric ton in London, the highest level since May 16, 2008, and traded at $2,343 at 10:18 a.m. in Singapore. The metal rose as much as 8.8 percent yesterday. China, the world’s biggest lead producer, is investigating a third lead-poisoning case in the past month involving children, according to media reports. The country will “strictly enforce” anti-pollution rules, Zhou Shengxian , head of the Ministry of Environmental Protection, said yesterday in a report. Chinese lead makers’ shares surged today on the metal’s gain. Henan Yuguang Gold & Lead Co., the nation’s top producer, gained by the 10 percent daily limit to 18.30 yuan, and Shenzhen Zhongjin Lingnan Nonfemet added as much as 7.1 percent. ‘Buying Panic’ Supply “fears turned the market into a buying panic,” Citigroup’s David Thurtell wrote in a Sept. 3 note. China’s “smelter problems are potentially much more significant to short-term supply” than the 2007 closure of Australia’s Magellan mine, which helped double prices within seven months, Thurtell said. Global lead production was about 4.241 million tons in the first half of this year, in line with metal usage of 4.204 million tons, according estimates from the International Lead and Zinc Study Group . Lead producers that don’t meet environmental standards will be shut down, the ministry’s Zhou was quoted as saying in the report, sourced from the China Environment News. Potential entrants to the smelting business won’t be allowed to start output unless they meet the rules, Zhou was cited as saying. A routine blood test conducted on 1,000 children in Kunming, capital city of Yunnan, found 200 who had “excessive” levels of lead, the China Daily reported on Aug. 31. There are also lead-poisoning probes in Shaanxi and Hunan provinces. Lead-acid battery production by China may jump 45 percent next year as the nation boosts alternative-energy use in transportation and construction, according to an estimate last month from the largest producer Tianneng Power International Ltd. China car sales surged 31 percent to 5.37 million in the first seven months of this year after the government cut retail taxes and began handing out 5 billion yuan ($733 million) in subsidies to boost demand. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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Indonesian Quake Death Toll Reaches 44 in West Java, Disaster Agency Says

September 2, 2009

By Yoga Rusmana and Aaron Sheldrick Sept. 3 (Bloomberg) — A 7.0-magnitude earthquake struck near the Indonesian island of Java yesterday, killing at least 44 people and destroying about 800 homes, disaster agencies and officials reported. The quake hit at 2:55 p.m. Jakarta time at a depth of 50 kilometers (31 miles) off the south coast of Indonesia’s most populous island, the U.S. Geological Survey said on its Web site. It’s the strongest since a 7.5-magnitude earthquake in India’s Andaman Islands on Aug. 10, according to USGS. The quake rocked buildings in the capital, Jakarta, and forced evacuations of businesses and hotels. “The impact of the quake was felt in Jakarta, Central Java and West Java,” said Arifin M. Hadi, head of disaster management at the Indonesian Red Cross. “The magnitude was high and the scope was wide so we are getting reports of damage from many towns. A university building in Tasikmalaya has also collapsed.” West Java Governor Heryawan said at least 44 people were killed in that region, the Antara state news agency reported today. Most were buried in landslides or under collapsed houses, Antara said. The quake destroyed 795 homes, along with mosques and schools, Antara said. The quake struck close to the epicenter of a 7.7-magnitude temblor that hit in July 2006, leaving 730 people dead and generating a tsunami, according to the USGS. Rescuers Dispatched Rescue workers were sent to the affected areas, Rustam Pakaya , head of the Ministry of Health’s crisis center, said by phone in Jakarta. Blackouts were reported in areas of West Java including Bandung, Ciamis, Sumedang, Tasikmayala and Sukubami. PT Perusahaan Listrik Negara’s geothermal power plant Gunung Salak Unit 2 was knocked offline by the quake, as well as a 500-kilovolt transformer in Bandung and some 150-kilovolt transformers in southern West Java province, said Murtaqi Syamsudin, director of operations at Perusahaan’s Java-Bali electricity system. In Jakarta, thousands of people filled the streets, blocking traffic and forcing pedestrians to mingle with motorcycles and cars as they tried to move through the narrow roads behind the buildings. Almost everyone had a phone to an ear, trying in vain to contact relatives and friends as communication lines and wireless services were rendered useless. Employees at the energy ministry in Jakarta evacuated the building and other office buildings were emptied in the capital. The Pacific Tsunami Warning Center canceled an alert for the coast of southern Java. It said no significant tsunami was generated by the quake. To contact the reporters on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net ; Aaron Sheldrick at asheldrick@bloomberg.net .

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Taiwan Rescuers Find 700 People Alive in Two Villages Buried by Landslides

August 11, 2009

By Yu-huay Sun and Tim Culpan Aug. 12 (Bloomberg) — Rescuers in Taiwan found 700 people alive in two southern villages buried by mudslides after Typhoon Marakot brought record rains to the island, a defense spokesman said today. Rescue helicopters are being sent after the survivors were found at Shiao Lin and Namahsia villages in southern Kaohsiung County, Martin Yu a spokesman for the Ministry of National Defense said in a phone interview today. He didn’t give details of how many more people in the area are unaccounted for. The death toll from Morakot, which struck Taiwan from Aug. 6 to Aug. 9, was raised to 63 as of 6:30 a.m. local time today, with 61 people confirmed as missing, the National Fire Agency said in a report. President Ma Ying-jeou will visit rescue operation centers in southern Taiwan today, according to a statement on his Web site. As many as 500 people were feared dead in Shiao Lin after mudslides destroyed around 150 houses in the remote village, the fire agency said yesterday. A helicopter performing rescue operations and delivering food crashed yesterday with three people aboard, the agency said. Morakot brought the most rain to Taiwan for a 48-hour period in 100 years of record-keeping, the Central Weather Bureau said. Flooding was the worst in 50 years, Wu Yueh-hsi, deputy director general of the Water Resources Agency said yesterday. To contact the reporter on this story: To contact the reporter on the story: Yu-huay Sun in Taipei ysun7@bloomberg.net Tim Culpan in Taipei at tculpan1@bloomberg.net .

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Russia Accuses Georgia of Firing on South Ossetia, Threatens to Use Force

August 1, 2009

By Torrey Clark and Helena Bedwell Aug.

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Japanese Government Plans to Lure Asia’s Rich to Foster Medical Industry

July 27, 2009

By Norihiko Kosaka July 27 (Bloomberg) — Japan plans to market medical services to wealthy tourists for income to help the country cope with rising cost of its aging society. The nation should target rich visitors from Asia and the Russian Far East to turn its health-care industry “from a cost center to a profitable one,” the Ministry of Economy, Trade and Industry said in a report compiled this month that was seen by Bloomberg News

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