In Wednesday's Asia papers-03/12/2003-ICIS News

Alarmed by the murder of two of its diplomats in Iraq, Japan has decided to postpone sending a team of engineers and doctors to help with the country's reconstruction, a report said on Tuesday (2 December). The team of dozens of engineers and medical personnel was to leave for humanitarian work in Baghdad, Basra and Mosul by the year-end, according to a report in the Asahi newspaper. Foreign Ministry officials said the team's departure date had not yet been fixed, but refused to comment further. Tokyo had earlier ditched plans to send an official to Iraq to investigate the killings, sending him to nearby Kuwait instead. Meanwhile, Thai Foreign Minister Surakiart Sathirathai has said on Tuesday that Thailand will consider withdrawing its troops in Iraq if the security situation there worsens. He added that the defence ministry was assessing the situation on a daily basis and so far believed the presence of the 440-strong Thai contingent in the central city of Karbala was welcomed by the Iraqi people.

Japan wants to deepen its relationship with the Association of Southeast Asian Nations (Asean) and concrete measures for that will emerge at the forthcoming Japan-Asean summit next week. In an interview with representatives from the Asia News Network, Japanese Prime Minister Junichiro Koizumi said separate bilateral free trade agreement (FTA) negotiations with Thailand, Malaysia and the Philippines would be launched during the Asean leaders' meeting on 11-12 December in Tokyo. He said Japan would also sign the Treaty of Amity and Cooperation though he felt Tokyo's ties with its neighbours in South-east Asia already exceed what is specified in the treaty. A statement released by Japan's Foreign Ministry said the summit would also see an agreement on broad guidelines for Asean-Japan cooperation, with a list of specific measures soon to be implemented being compiled. The Tokyo summit would be the first ever to be attended by the 10 Asean leaders outside the region, Koizumi noted. Japan would also seek to negotiate an FTA with South Korea, he added, and that he saw growth in China as an opportunity and not a threat.

China sets growth target of 7% for '04

China set a modest growth target of 7% for next year and reduced the size of its annual fiscal stimulus package as government officials reiterated a need for economic growth to be balanced by progress in health care, education, environmental protection and social welfare. Officials from the StateDevelopment and Reform Commission said growth in 2004 was likely to exceed the 7% target by some distance. In the first nine months of 2003, gross domestic product expanded by an official 8.5% and is forecast to maintain or exceed that rate for the whole year. The target is in line with the government's goal of average 7% annual growth between 2001 to 2005. Although Beijing is generally content with China's rapid growth, it is concerned that certain sectors such as property, automobiles, cement, steel and aluminium may be adding capacity too quickly. Policymakers also want to moderate the pace of credit growth. With the aim of guarding against overheating in mind, the government is set to scale back its fiscal stimulus, planning to issue Rmb110bn ($13bn/Euro11bn) in special treasury bonds in 2004, down from Rmb140bn this year. A total Rmb600bn in bonds have been issued to fund mainly infrastructure investment over the past five years.

China Daily, China (online edition)

US opposes Taipei bid to change status quo

The US said it would oppose any Taiwanese referendum designed to change the island's status or move towards independence. The comment by State Department spokesman Richard Boucher was followed by a warning from China on Tuesday (2 December) that radicals were playing a dangerous and deceitful game aimed at splitting Taiwan from the mainland. President Chen Shui-bian had raised the political temperature over the weekend (29-30 December) by saying he would stage a poll on the issue on 20 March, 2004, the same day as the presidential ballot. Asked for his comment, Boucher said on Monday that the US opposed any attempt by either China or Taiwan to change the status quo. China's Foreign Ministry spokesman Liu Jianchao said plans for pro-independence activities by Taiwan extremists 'in the name of human rights and democracy' were 'deceiving and dangerous'.

Straits Times, Singapore (online edition)

China Daily, China (online edition)

EU's to end anti-dump tariff on Taiwan bikes '04

Taiwan will likely no longer be subject to further anti-dumping tariffs levied by the European Union (EU) on bicycle exports to the market in late February 2004, if everything goes smoothly. The EU started levying anti-dumping tariffs on imports of Taiwan-made bicycles from February 1999 and the five-year punitive tariff program is expected to be scrapped as the union has not proposed any renewal of the program. Under the anti-dumping scheme, Taiwan-made bicycles exported to the EU are subject to extra tariff rates of 2.4% to 18.2%, with most of them facing an average additional tariff rate of 5.4%. Statistics compiled by the Taiwan Bicycle Exporters' Association show that Taiwan exported about 1.7m bicycles, valued at about $203m (Euro168m) to the EU, accounting for 40.26% in volume and 38.86% in value of the island's total bike exports, respectively, last year. EU is currently the largest export market for Taiwan-made bicycles, and the other two major markets are North America and Japan.

Taiwan Economic News, Taiwan (online edition)

Cable to link S'pore, Thailand, Indonesia

Telecommunications links between Singapore, Thailand and Indonesia received a major boost on Tuesday (2 December) with the announcement of a new underwater cable network linking the three countries. The new network will be the third to link Indonesia and Thailand directly with Singapore. Singapore Telecommunications (SingTel) said the network, which it will operate with Thailand's CAT Telecom and Telekommunikasi Indonesia, had been completed and will start operating immediately. The network, built by Japanese high-technology firm NEC, spans 1100 kilometres making landfall at Songkhla in Thailand, Batam in Indonesia and Changi in Singapore, SingTel said in a statement. SingTel, one of the region's biggest telecommunications companies, said the cable system's bandwidth was 30 gigabits/second and linked into its extensive submarine cable network.

Business Times, Singapore (online edition)

More WB loans despite corruption

After several years of reduced support because of government corruption, the World Bank has decided to increase its loans to Indonesia even though the bank said corruption is still rampant. It said Indonesia had too many people in poverty and the money would spur the momentum of reforms. The new loans, some depending on measurable declines in government corruption, were approved by the bank's board last week. In return, Jakarta would have to set up an anti-corruption commission and improve government procurement methods. Critics dismiss the measures as window-dressing, saying they lack enforcement power to have much effect. Under the new plan, the World Bank expects to lend a minimum of about $580m (Euro481m) this year.

Straits Times, Singapore (online edition)

Jakarta Post, Indonesia (online edition)

New M'sian PM backs currency peg

Malaysia's new Prime Minister Abdullah Ahmad Badawi, who is also finance minister, on Tuesday (2 December) backed the pegging of the country's currency to the US dollar, saying it has served the economy well. He took over both posts on 31 October from Mahathir Mohamad, who was responsible for pegging the ringgit at 3.8 to the US dollar amid the Asian economic crisis in 1997/98. He said the peg, which Mahathir defended staunchly against international suggestions that the ringgit be refloated, had not been discussed and he presented an upbeat assessment of the country's economic performance. The central bank's foreign exchange reserves were RM166.9bn ($44bn/Euro36bn) as of 15 November, according to official figures. The central bank has forecast 4.5% gross domestic product growth for 2003 but government officials have said it will likely be higher. Abdullah also urged Malaysian banks operating in Organisation of the Islamic Conference countries to start moving into Islamic banking.

Channel News Asia, Singapore (online edition)

Oil & Gas

Consortium finds crude oil in North Caspian Sea

An international consortium led by Exxon Mobil and Italian energy giant Eni SpA has confirmed rich crude oil reserves in two fields in the North Caspian Sea off the coast of Kazakhstan. Located near the Kashagan field, which many believe holds large volumes of oil, the latest discoveries could accelerate further development in the North Caspian Sea. The test wells installed at Kashagan Southwest and Aktote produced up to 3650 barrels/day. To assess reserve volumes, the consortium, which also includes Japan's Inpex, plans to continue running tests. The consortium plans to begin commercial development of the Kashagan field between 2007-2010, with recoverable reserves expected to total 7bn-9bn barrels. By connecting the fields with a pipeline, the consortium will be able to share production facilities. As a result, the fields in the North Caspian Sea may surpass those in the North Sea, whose recoverable reserves are estimated at 12-13bn barrels. Inpex shares its 8.33% oil concessions to the fields with Japan National Oil, Japan Petroleum Exploration and Mitsubishi. Japanese investment in the project is believed to total Yen45bn ($416m/Euro345m) todate.

Nihon Keizai Shimbun, Japan (online edition)

Mitsui to buy Indon gas rights from BG

Mitsui of Japan said on Tuesday (2 December) that it has reached agreement to buy 10.7% of the rights to a natural gas project in Tangu, Indonesia, from the United Kingdom's BG Group in a deal worth Yen26bn ($240m/Euro200m). If the deal is approved, it would be the first time that Mitsui owns natural gas rights in Indonesia. An arrangement between the three existing stakeholders and BG stated that the UK company will give priority to whichever stakeholder declares, within 30 days of the announcement, that it will buy the rights under the same conditions as Mitsui. The other firms that hold an interest in the project include LNG Japan, a 50:50 joint venture owned by Nissho Iwai and Sumitomo, and CNOOC of China. The Tangu project will begin producing natural gas in 2007 and is targeting annual output equivalent to 10.5m tonne liquefied natural gas. It is expected to be larger than the Sakhalin II Project in Russia, which Mitsui holds an interest in.

Nihon Keizai Shimbun, Japan (online edition)

Indonesia wants Opec to keep quota unchanged

Indonesia wants the Organisation of Petroleum Exporting Countries (Opec) to keep its production ceiling unchanged at 24.5m barrels/day, a minister said. Any change could prompt non-Opec producers such as Russia to boost its crude output and pressure world prices down, Energy Minister Purnomo Yusgiantoro was quoted by the state Antara news agency as saying. Yusgiantoro forecast world oil prices would strengthen until January from the current average $27/barrel because of high demand in the West. He said Western demand would remain high in January and February 2004 but weaken in the spring. Opec ministers will meet Thursday (4 December) in Vienna, with most analysts expecting the current production ceiling will be maintained.

Channel News Asia, Singapore (online edition)

Company News

DuPont to cut jobs in bid to lower costs

DuPont on Tuesday (2 December) said it would reduce costs by $900m (Euro747m), partly through job cuts, and aims to increase revenue by 6% as it grapples with high raw material prices and the impending sale of its key clothing and carpet fibre business. The number two US chemicals manufacturer also said it plans to focus more on emerging markets -- specifically China, Central and Eastern Europe and Brazil -- where it expects much of its growth to come from. The Wilmington, Delaware, company said half of the cost cuts will come in 2004 and the rest in 2005. The company said it would disclose the number of job cuts and details of restructuring charges when it announces Q1 results on April 27, 2004.

Business Day, Thailand (online edition)

Four tyre makers to boost output by 37m units

Japan's four tyre manufacturers will bolster their global production capacity by about 37m units by 2006 in response to the expanding automobile market in China and Southeast Asia. The increased output would equal about 20% of all domestic production, and the companies' total investment will likely reach Yen160.0bn ($1.4bn/Euro1.2bn):

In April 2005, Yokohama Rubber's new factory in Thailand will come onstream, and will produce truck and bus tyres for export to Asia, Europe and the Middle East. The Yen5.5bn factory will have an annual capacity of 315 000 units, and plans to double output by 2007.
Bridgestone plans to invest Yen90.5bn to bolster its operations by 2006. In Thailand, the company will spend Yen24bn to build a factory to produce up to 1.8m truck and bus tyres. In Poland, Bridgestone will expand its passenger tyre production capacity by 4.5m units to meet growing demand in Eastern Europe from the planned joint production by Toyota Motor and France's PSA Peugeot Citroen.
Sumitomo Rubber will spend Yen33bn to expand its factory in Miyazaki Prefecture.
Toyo Tire & Rubber has earmarked Yen10bn to boost annual production capacity at its two domestic factories by 3m units.

Nihon Keizai Shimbun, Japan (online edition)

Itochu to make fibre based on US tech

Itochu of Japan has acquired the rights from US sportswear manufacturer Outlast Technologies to jointly develop and produce with Seiren Co fibre and other material with temperature regulating properties. The product is made by putting paraffin wax in small capsules about 10 microns in diameter. The capsules are added to an acrylic substance that is used to coat material and polyurethane foam. The substance absorbs heat when the surrounding temperature rises to 33C or above, then releases it when the temperature drops below that mark. Since 2000, Itochu has been importing the fibre and material from Outlast Technologies and selling it to customers in Japan, including manufacturers of sportswear and underwear. Buyers, however, are interested in products better suited to the Japanese climate. Itochu expects the fibre to generate retail sales of Yen4bn ($37m/Euro30m) in fiscal 2005.

Nihon Keizai Shimbun, Japan (online edition)

PSA, Cosco in S$162m S'pore port terminal jv

Singapore's PSA and China Ocean Shipping Group Company (Cosco), have launched their joint venture to operate two berths at PSA's Pasir Panjang Terminal. The newly launched S$162m ($95m/Euro79m) joint venture, called Cosco-PSA Terminal, will see Cosco holding a 49% stake and PSA holding the other 51%. The terminal is expected to handle more than 1m standard-sized containers yearly by 2008. The Cosco-PSA Terminal joint venture could spark off other joint ventures between PSA and Cosco, such as jointly operating ports outside Singapore. One of them is Shanghai's new multi-billion dollar Yangshan Port.
PSA Chairman Stephen Lee said other shipping lines have also indicated interest in taking similar stakes in PSA's Singapore operations. But such talks are still in the preliminary stages.

Channel News Asia, Singapore (online edition)

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

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In Wednesday's Asia papers

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