In Tuesday's Asia papers

A summary of political, economic, trade, business and product news affecting the chemical and related industries.

International Economics & Politics

Baghdad shaken by series of blasts

The Iraqi capital was plunged into chaos as suicide bombers struck four times in 45 minutes on Monday (27 October) morning, leaving at least 34 people dead in attacks on the Red Cross headquarters and three police stations. Ambulances criss-crossed the city all morning ferrying more than 220 wounded victims on Baghdad's bloodiest day since Saddam Hussein's regime fell to American-led forces in April. US army Brigadier-General Mark Hertling confirmed the attacks were suicide bombings and said a fifth had been foiled by Iraqi police. The attacks on the first day of the Muslim fasting month of Ramadan came hours after clashes in Baghdad killed three US soldiers overnight and a day after guerillas struck at a Baghdad hotel where US Deputy Secretary of State Paul Wolfowitz was staying. He escaped unscathed. US President George W. Bush said the US had no intention of quitting Iraq. Shattered that its neutrality had afforded no protection, the International Committee of the Red Cross (ICRC) expressed deep shock over the attack on its offices which left 12 dead and 15 injured. Pierre Gassmann, head of the ICRC delegation in Baghdad, said they will begin pulling foreign staff out of Baghdad on Tuesday.

Straits Times, Singapore (online edition)

Business Day, Thailand (online edition)

China Daily, China (online edition)

Putin firm on tycoon arrest as market tumbles

President Vladimir Putin stood firm on the weekend (25-26 October) arrest of Russia's richest man, denounced by many there as a pre-election political witch-hunt that sent the stock market into a tailspin. The Russian leader refused to review the detention of Mikhail Khodorkovsky, chief of the Yukos oil giant, who was in jail after being slapped with massive fraud and tax evasion charges. Everyone has to be equal before the law, Putin said of the arrest of 40-year-old Khodorkovsky, whose personal fortune is estimated at $8bn (Euro6bn). Many of the country's business and political elite denounced the arrest, with the leader of one political party calling it a "political contract hit." Analysts said that Khodorkovsky was singled out because he has openly funded opposition political parties ahead of the 7 December parliamentary elections. Some said his funding of opposition was simply a way of buying votes to pave government approval for beneficial legislation for his oil empire and that Putin wanted to keep him from becoming too powerful. Others said Khodorkovsky earned the Kremlin's wrath by publicly pushing ahead with plans to sell a large share of Yukos to either ExxonMobil or Chevron.

Channel News Asia, Singapore (online edition)

HK, Shanghai bolster trade ties

Hong Kong and Shanghai agreed on Monday (27 October) to strengthen cooperation as part of moves to bolster trade links between the two business hubs, the Hong Kong government said. Leader Tung Chee Hwa said both sides agreed to widen and strengthen cooperation in eight sectors including the management of airports and ports, tourism and exhibitions, and trade and investment. They also agreed to cooperate on expositions as Shanghai, China's largest commercial hub, is to stage the 2010 World Exposition, said Tung. While acknowledging that Hong Kong businesses face stiff competition from lower-cost companies in the mainland, he said better dealings with Shanghai would create "a win-win situation". At a joint news conference, Shanghai Mayor Han Zheng said "healthy and orderly competition will enhance cooperation and lead to better economic development". He arrived in Hong Kong on Sunday (26 October) with a 40-strong delegation for the first-ever trade talks between the two cities. Han's visit also signals the continuation of efforts by China to sustain Hong Kong's burgeoning economic recovery after the devastating Sars outbreak earlier this year.

Straits Times, Singapore (online edition)

China Daily, China (online edition)

South China Morning Post, Hong Kong (online edition)

Asian Muslims under world scrutiny

Millions of Asian Muslims began marking the holy Islamic fasting month of Ramadan, watched by a world focused on Islam by the US-led war on terrorism. Clerics in Indonesia, Malaysia and Afghanistan declared the start of the holy month, the most important event in the Islamic calendar, on Monday (27 October) after sighting the new moon that traditionally marks the beginning of the festival. Islamic leaders in Bangladesh and Pakistan have said its worshipers would begin marking the festival on Tuesday, as will Muslims in the disputed Himalayan region of Kashmir, which is claimed by rivals Pakistan and India. Muslims go without food, drink, smoking and sex from sunrise to sunset during Ramadan. Fasting is one of the five pillars of Islam. International awareness of the festival has been heightened in the past two years by the US-led war on terror, which has focused predominantly on Islamic militants in the Middle East and Asia. Asian Muslims, especially those in Southeast Asia, are traditionally moderate. However, security throughout much of the region has been tightened as authorities, particularly in restive Kashmir, fear religious fervour during Ramadan will fuel increased militancy under the belief that dying in the name of God during the holy month proffers added heavenly rewards.

Channel News Asia, Singapore (online edition)

China to create better investment environment

President Hu Jintao on Monday (27 October) pledged to create better conditions for foreign investors. China will open wider to the world, further improve foreign-related economic laws and regulations and enlarge areas that open to the outside world according to international practice and its commitments to the World Trade Organization, Hu said. China will continue to intensify efforts to build a market economy, step up protection of intellectual property rights and strive to foster a unified, open and credible market featuring with fair competition and good order, Hu said. The president made those remarks while meeting representatives of New Zealand business people in Auckland. On ways to further consolidate bilateral economic and technological ties, Hu proposed the two countries expand cooperation in such traditional trade areas as wool, paper pulp, wood and diary products while exploring partnership in the service sector including science and technology, education and tourism. He called for more mutual investment between China and New Zealand and encouraged New Zealand enterprises to make investment in China's vast central and western areas and Northeast China as the country is now implementing its western development strategy and trying to reinvigorate its old industrial bases in the Northeast.

China Daily, China (online edition)

China, Australia boost ties with trade deal

Australia and China strengthened their trade ties during a visit by President Hu Jintao on Friday (24 October), with the two sides signing a huge gas supply deal and agreeing to explore a free trade pact. The two governments signed a A$30bn ($21bn/Euro17bn) agreement for Australia to supply China with liquid natural gas over the next 25 years. It will be the second major gas supply contract between the two countries in the past two years. The new deal topped a A$25bn contract awarded to Australia last year to supply China's Guangdong province with 3.3m tonne liquefied natural gas (LNG) a year over 25 years. It will ensure Australia becomes a key supplier of the energy to help China's fast growing economy. The two sides also inked a broader framework agreement setting out a 'road map' for the conduct of trade and economic ties. Hu stressed the importance of Sino-Australian trade with the two-way flow almost trebling to A$21bn since 1996 when conservative Prime Minister John Howard came to power. China is now Australia's third largest trading partner and fourth largest destination for exports such as iron ore, wool and crude petroleum. Australia is China's ninth biggest trading partner, buying Chinese computers, toys and textiles.

China Daily, China (online edition)

China, Thailand plan road link

China and Thailand are planning to build a trans-national highway linking Kunming city with Bangkok and construction will start soon, Chinese state press reported on Monday (27 October). The road will begin in Kunming, the capital of southwestern Yunnan province, and run for 1890 kilometers through Laos to the Thai capital, China's Minister of Communications Zhang Chunxian was quoted as saying by the Xinhua news agency.

Business Day, Thailand (online edition)

Taiwan's aerospace industry takes flight

Taiwan's aerospace industry is expected to generate NT$40bn ($1.19bn/Euro1.01bn) in revenue next year, up at least 30% from this year, due to a surge in foreign contract orders and military aircraft repair and maintenance business, according to the Taiwan Aerospace Industry Association (TAIA). The biggest factor in this year's growth, according to CASID, is the government's decision to outsource military aircraft repair and maintenance services to the private sector. Several upgrading projects for military aircraft, including the Army's UH-1H utility helicopter, have added demand for locally made aerospace parts and components. Mike Lan, TAIA secretary general, predicts an even better year for the local aerospace component industry in 2004 as cost-cutting first-tier aerospace component suppliers abroad turn to Taiwan partners, especially since the 11 September terrorist attack, which created a paralysing impact on the global aerospace market. Lan claims that Taiwan aerospace makers have developed market niches and are expected to win more foreign orders with their strong competitive edge in manufacturing and cost control. Lan noted that the formation of a mutual-recognition aerospace certification system between Taiwan and the US is expected to greatly reduce the cost and time of certifying Taiwan-made aerospace components.

Taiwan Economic News, Taiwan (online edition)

S Korean exports to exceed $183.5bn

South Korea's 2003 exports are likely to total more than $183.5bn, up 13% from last year, despite the negative foreign-exchange conditions, the Korea Trade-Investment Promotion Agency (Kotra) said on 27 October. Quoting a survey of its overseas offices and major buyers, Kotra said the ongoing strong demand for Korean goods such as semiconductors, mobile telecommunications equipment and automobiles would help keep the country's overseas business active. "We expect over 20% year-on-year growth in shipments of chips, wireless communication equipment, cars, computers, machinery and ships," the agency forecast. However, the situation is less prosperous for the textile and plastic sectors due to growing competition from China and Hong Kong, whose products are cheaper, it added. By region, Kotra believes the present foreign-exchange rate is not likely to cause too much harm to exports to the 12 countries that use the euro, or those markets whose currency values have also strengthened, such as Japan, Indonesia, Singapore and Australia. On the other hand, Korean exporters have a reason to worry about those markets that pay in dollars such as the US and Latin America, the report said.

Korea Herald, South Korea (online edition)

US ties Malaysia aid to religious freedom

Responding to criticism of Jews by Malaysian Prime Minister Mahathir Mohamad, the US Senate on Monday (27 October) tied $1.2m in military aid to religious freedom in the country. Before money could be spent, the State Department would have to determine that Malaysia "supports and promotes religious freedoms, including tolerance for people of the Jewish faith". The condition could be waived for national security reasons. The restrictions were approved by voice vote as an amendment to the $18.1bn foreign aid Bill being considered by the Senate.After the Bill is approved, it will have to be reconciled with a $17.1bn version approved by the House in July. In a 16 October speech to a summit of Islamic countries, Malaysian Premier Mahathir Mohamad said that Jews"rule the world by proxy. They get others to fight and die for them". The sponsor of the amendment, Senator Mitch McConnell, said Mahathir's remarks "are dangerously wrong and they play directly into the hands of the radical Islamic extremists throughout the region".

Straits Times, Singapore (online edition)

Electronic goods push Thai exports to $7.10bn

Thailand's exports in September rose by 11.1% to $7.10bn (Euro6.03bn) from a year ago due to a rise in orders for electronic and certain agricultural goods, the Ministry of Commerce, Adisai Bodharamik, said. He also added that this year's export will reach $7.7bn, which is a 12% hike on last year. Meanwhile, imports grew 15.8% in the month to $6.34bn, which resulted in a trade surplus of $759m. The Ministry of Commerce previously forecast this year’s export would grow 10.58% and the strong baht will have a minimal impact on exports. The baht on Monday (27 October) stood at 39.32/95 against the dollar. Thailand's major markets for the export are the US, Southeast Asia, Japan, Europe, Hong Kong, Taiwan, South Korea and Australia. Exports are led by rubber, tapioca products, frozen shrimp, fruit and vegetable. The ministry said China may become Thailand's third-largest market, nudging up one notch from its current fourth place, by year-end as China's demand for basic goods from Thailand such as jasmine rice, rubber and construction materials rose in the past two years. Thai exports to China rose 68.6% to $4.02bn, narrowing the gap between exports to Singapore, the current third largest market for Thai products, at $4.24bn.

Business Day, Thailand (online edition)

S'pore, Bahrain agree to FTA talks

Singapore and Bahrain agreed on Monday (27 October) to start negotiating a free trade agreement (FTA). Prime Minister Goh Chok Tong and his Bahraini counterpart, Sheikh Khalifa bin Salman Al Khalifa, reached the decision at a meeting in Singapore. They said such a deal would have a catalytic effect on economic cooperation between the countries of the Gulf Cooperation Council (GCC), of which Bahrain is a member, and Asean (Association of South-east Asian Nations). One of the measures, an investment guarantee agreement to promote and protect investments from one country to the other, was signed. The two leaders agreed to revitalise a joint committee to promote economic relations and to start negotiations on a deal to avoid double taxation. They also pledged to share experiences and explore cooperation in growth areas such as information technology, insurance, banking and finance. At their meeting, the two leaders also discussed international and regional issues, including Iraq. They reiterated their strong stand against terrorism and agreed to exchange information regularly on developments in their regions.

Straits Times, Singapore (online edition)

Arroyo steps into fight over top judge

Philippine President Gloria Macapagal Arroyo stepped into a bitter row over the impeachment of the nation's top judge on 27 October, saying she was seeking a 'principled' solution to avert a political crisis. A move by a group of 87 lawmakers last week to impeach Chief Justice Hilario Davide over accusations he misused public funds has unnerved investors and raised the prospect of a damaging battle between the legislature and the judiciary. Arroyo had been staying out of the fray, but widespread condemnation of the impeachment as politically motivated, ahead of next May's elections has raised the pressure for a resolution. Davide, a friend of Arroyo who presided over the impeachment trial of former president Joseph Estrada three years ago, has denied allegations he misused nearly Pesos48m ($864 900/Euro735 165) in public funds, saying the complaint was politically motivated. Barring a negotiated solution, the case will move on to the 22-member Senate, which can act as a court to decide whether Davide should be removed. But it is already threatening to disrupt the fragile economy. Presidential spokesman Ignacio Bunye has warned that funds earmarked to run the government and its agencies next year could be delayed if politicians do not quickly resolve the row.

Business Day, Thailand (online edition)

Manila Times, Philippines (online edition)

Life Sciences

OTS, Otsuka ally in intestinal cancer vaccines

Japan's Oncotherapy Science (OTS), a biotechnology start-up, has formed an alliance with Otsuka Pharmaceutical for the development and sales of large intestine cancer vaccines. OTS had jointly developed two types of vaccines with the Institute of Medical Science at the University of Tokyo. It gave Otsuka Pharmaceutical the worldwide rights for further development, manufacturing and sales. In return, it will receive a lump-sum payment and money as research progresses, as well as royalties from sales after the drugs hit the market. Otsuka Pharmaceutical will begin experiments on animals and clinical trials, with hopes of commercialising the products in 2008. The vaccines use certain proteins that appear only on the surface of cancerous cells of the large intestine. When the proteins are synthesised and injected, the T cells, immunocytes in the blood that are usually inactive, start to detect and attack cancer cells.

Nihon Keizai Shimbun, Japan (online edition)

Oil & Gas

US oil majors halt talks after tycoon's arrest

US oil majors ExxonMobil and ChevronTexaco have halted talks on the purchase of a major stake in Russian oil giant Yukos after the arrest of its chief executive Mikhail Khodorkovsky. The Financial Times reported on Monday (27 October) that both US firms remain interested in a deal and will continue to investigate their options pending resolution of Khodorkovsky's detention, citing people close to the negotiation as saying. Talks with Chevron, the smaller of the two oil groups, are believed to be more advanced than with Exxon, the world's largest oil group, which has been seeking a larger stake of about 40%, the newspaper said. Shares in Khodorkovsky's flagship company Yukos, the top oil producer in Russia, were expected to plunge by 10% or more when the Russian stock market opens at 0800 GMT Monday. In Russian financial markets, some experts believe a deal with either of the US oil majors is dead in the water. Chevron is seeking to forge a partnership structure with Yukos and is considering asset swaps, while ExxonMobil has reportedly offered $25bn (Euro21bn) for a 40% stake and is seeking greater control.

Channel News Asia, Singapore (online edition)

Company News

100 S Korean CEOs to meet at conference

The top managers of the South Korean branches of 100 high-profile multinational corporations will gather on 5  November to discuss current business issues, industry sources said on 27 October. Hosted by the KCMC, an association for Korean chief executives at foreign companies, the conference's main theme will be "The Role of Multinationals in Globalization" and discussions will include success stories of foreign-invested companies and their recommendations to the local government on topics related to foreign investment. Several well-known foreign businessmen will also offer presentations on the strategies needed to develop Korea into the hub of Northeast Asia.

Korea Herald, South Korea (online edition)

Motorola wins int'’l HQ status in S'pore

New York-listed communications giant Motorola is the latest firm to win international headquarters status in Singapore, and enjoy the tax breaks that come with it. The company has been in Singapore for 30 years, starting out with just six people and shipping pagers. Today it employs 2000 people. Motorola's president Mike Zafirovski was in town for Monday's (27 October) ceremony and said his firm plans to step up its product testing, intellectual property and supply chain manufacturing activities there. He also said that demand for its products in the run up to the year-end holiday season has been stronger than in 2002.

Channel News Asia, Singapore (online edition)

(Some stories may not appear in all editions of the cited news media.)