In Monday's Asia papers

26 January 2004 02:40  [Source: ICIS news]

A summary of political, economic, trade, business and product news affecting the chemical and related industries.
 
International Economics & Politics
 
EU may lift China arms ban, US opposes

European Union (EU) foreign ministers will launch discussions in Brussels, Belgium, on Monday on lifting the arms embargo on China imposed after the 1989 Tiananmen Square massacre, despite US opposition, diplomats said. No immediate decision is expected, but the bloc could agree to end the ban as early as March, said a source. The discussions were initiated by France, which is hosting Chinese President Hu Jintao this week. European officials said they are aware that the US is against lifting the ban, but insist the bloc will take a decision based on a substantive argument among themselves. France and Germany are backed by other EU states in believing that it is high time for the embargo to be lifted, said an envoy from a country pushing for the ban to be ended. Britain, Washington's staunchest ally during the Iraq war, appears open to lifting the ban. British Foreign Office minister Bill Rammell said in Beijing in December that the EU has other controls in place to ensure that China could not use newly bought European weapons to attack Taiwan or for domestic crackdowns. That was a reference to an EU 'code of conduct' on arms sales, which would act as a safety net.
 
Channel News Asia, Singapore (online edition)
 
China Daily, China (online edition)

France goes Chinese on Hu's state visit
 
France has ardently embraced all things Chinese as China's President Hu Jintao arrives for his first state visit there on Monday. The 40th anniversary of diplomatic relations between both countries is being commemorated with a national, government-sponsored Year of China campaign encompassing more than 300 events. The French government runs cultural campaigns honouring many countries, but none has made such a stir. An editorial in the left-leaning newspaper Liberation noted that the 500 000 strong immigrant Chinese population, with its "economic dynamism, cult of knowledge and thirst for success", makes it a valuable bridge between France and China, "with which France nurtures hopes, too often disappointed, of strategic dialogue and big contracts". The centrepiece of the celebrations is the red-lit Eiffel Tower, the only time it has been lit up in a single colour apart from the salmon glow that it has worn nightly since 1985. Officials also closed Paris' grand avenue, the Champs Elysees, for a huge parade watched by 200 000 people and dominated by a 110 metre-long dancing dragon. It is the first time the avenue has been taken over by an intrinsically non-French event since German troops marched down it during World War II.
 
Straits Times, Singapore (online edition)
 
Japan '03 trade surplus Yen10.2trn, up 3.6%

Japan's merchandise trade surplus rose 3.6% to Yen10.239trn in 2003 for a second straight year of growth, the Finance Ministry said Monday, reflecting the growth in exports which helped propel the economy forward last year.  In December alone, the trade surplus expanded 41.2% from a year ago to Yen1.122trn, above the Yen1.085trn forecast on average by economists surveyed. The monthly surplus has grown for six straight months. Despite the yen's steady rise toward the end of 2003, exports grew 8.5% in December, helping full-year exports rise 4.7%. Imports grew 1.6% in December, and expanded 5.0% during the full calendar year. Japan's trade surplus with the US fell 11.2% in December to Yen558.8bn, as exports fell 7.8%. Imports contracted 4.1%. Japan's trade with Asia during December resulted in a surplus of Yen722.0bn, up 52.4%, on the back of a 16.2% rise in exports. Imports from the region rose 5.6%.

Nihon Keizai Shimbun, Japan (online edition)

Korean shipyards enjoy record exports in '03

South Korean ship exports rose 3.6% year-on-year to an all-time high of $11.06bn (Euro8.73bn) in 2003, official data show. The shipyards also secured record new orders to build 470 vessels totalling 16.75m tonnes in 2003, compared with 230 vessels totalling 7.59m tonnes a year ago, according to the ministry of commerce, industry and energy. This year's ship exports will stand at $12bn but orders will drop sharply because of a backlog, it said. South Korean shipbuilders have basked in brisk sales in recent years to capture a bigger share of the global market. The rise in orders reflects tougher international rules on outdated vessels, a trend toward bigger ships and growing demand for big-ticket liquefied natural gas (LNG) carrying vessels. South Korea built 12 LNG vessels last year.
 
Channel News Asia, Singapore (online edition)
 
Korea Herald, South Korea (online edition)
 
India, Latin American trade bloc inks pact

India and the Latin American trading bloc Mercosur signed a landmark agreement which was expected to pave the way for a free trade arrangement between the two, officials said. The preferential trade agreement was signed in the presence of visiting Brazilian President Luiz Inacio Lula da Silva and Indian Prime Minister Atal Behari Vajpayee after talks Sunday (25 January) evening. Lula said global trading patterns could be changed if India and Brazil combined forces. The pact was signed by Commerce Minister Arun Jaitely for India and ministers from Brazil, Paraguay, Uruguay and Argentina. Mercosur -- including Argentina, Brazil, Uruguay and Paraguay, with Chile and Bolivia as associate members -- signed a framework accord with India in Paraguay's capital Asuncion last year. Six other agreements - on space cooperation, visa arrangements, tourism and cultural exchanges, were also signed. During talks with Lula, India said it was keen to participate in railway projects in Brazil. Negotiations for a Brazilian micro-satellite to be launched from an Indian launch pad were also in an advanced stage, a spokesman said. Earlier January, officials from India, Brazil and South Africa met in New Delhi to discuss trade, defence, aviation, shipping and rural development. Analysts said the three giants of the developing world could form a powerful trading bloc if they were to pool their resources.
 
Channel News Asia, Singapore (online edition)
 
Times of India, India (online edition)
 
Security blanket over India on Republic Day
 
India has put its troops on alert across the country ahead of Monday's Republic Day celebrations amid fears of attacks by Kashmiri militants and a general strike call by rebels in its troubled northeast. The holiday has become a major target for Islamic militants and separatist rebels who said the celebrations are part of Indian hegemony and muscle flexing. Security has also been beefed up at Indira Gandhi International Airport, vital installations, prominent hotels, tourist spots and other public places, a spokesman said. In restive Indian Kashmir, security forces have thrown up tight cordons around venues in the summer capital Srinagar and the southern city of Jammu where Monday's celebrations are to be staged, police said. An added alert was sounded after India's Border Security Force (BSF) on Saturday (25 January) recovered 45 kilograms (100 pounds) of deadly explosives, eight rockets and other arms and ammunition. Islamic militants fighting to secede Kashmir from India and join it with neighbouring Pakistan or remain independent have fired rockets in the past, causing casualties. At least 40 000 people have been killed since the outbreak of an Islamic insurgency in Kashmir in 1989, according to Indian figures. Separatists put the toll at between 80 000 and 100 000.
 
Channel News Asia, Singapore (online edition)
 
Times of India, India (online edition)

Batam, Purwakarta best investment havens
 
Batam and Purwakarta, near Jakarta, have been named Indonesia's most attractive investment destinations in 2003 following a nationwide survey. Involving 44 cities and 156 regencies, the survey was carried out by KPPOD, the Monitoring Committee on Regional Autonomy Implementation, a private agency that focuses on Indonesia's ambitious decentralisation project and its impact on business. It said the two regions offered several qualities: local culture, infrastructure, workforce and government support that are good for investment. The annual survey, the only one of its kind in Indonesia, was first conducted in 2001 when Jakarta launched decentralisation. Since then, worries have mounted that most regional governments would abuse their new powers instead of enacting laws that could spur growth. Batam is home to some 611 foreign investors. Since the late 1970s, it has operated as a bonded zone, meaning manufacturing firms operating on Batam's industrial complexes get significant tax breaks. Jakarta has imposed value-added tax on the island early this year, but it remains unclear how the higher costs for businesses will affect Batam's ability to draw investors. The island's proximity to Singapore is also considered a huge advantage. As Purwakarta is located near Jakarta, it boasts better infrastructure compared to other regencies.

Straits Times, Singapore (online edition)
 
Jakarta Post, Indonesia (online edition)
 
Malaysian police clash with Anwar supporters

Riot police have clashed with supporters of jailed former deputy prime minister Anwar Ibrahim when they attempted to break up a rally in northern Malaysia's Perak state, an official from Anwar's party said. In the incident, which occurred late Saturday (24 January), dozens of riot police using water cannons barged into a hall where Anwar's National Justice Party (Keadilan) were conducting a rally. Several of the 1000-strong crowd were injured, the official said. At least four party leaders were arrested and held overnight, but were released on Sunday morning with no charges filed against them, he said. Perak police have refused to confirm any details. The spokesman said Keadilan and the Free Anwar Movement would continue as planned with a cross-country convoy of up to a hundred vehicles handing out leaflets calling for Anwar's freedom despite police roadblocks. The month-long event is due to culminate in a mass rally in Anwar's home state of Penang on 14 February. The planned demonstrations in a country with limited tolerance for open dissent are the first challenge to Prime Minister Abdullah Ahmad Badawi, who took over from Mahathir Mohamad when he retired on 31 October after 22 years in power.
 
Channel News Asia, Singapore (online edition)

Philippines probing military officers for mutiny
 
Philippine authorities are seeking charges against 22 active and retired military officers for alleged involvement in the July mutiny aimed at toppling President Gloria Arroyo, documents obtained said. The group is separate from the 267 officers and men already in the dock and facing court-martial for their involvement in the alleged coup attempt against Arroyo last year. The Justice Department's chief prosecutor has received a list from the Interior Department seeking a preliminary investigation against four retired colonels and 18 active officers ranging in rank from captain to lieutenant, for involvement in the mutiny on 27 July. On that day, over 200 soldiers seized part of the Makati business district in the early hours, planting explosives and briefly taking dozens of tourists hostage. They demanded the resignation of Arroyo and then defense secretary Angelo Reyes who they accused of corruption. The rebellion fizzled out less than 24 hours later with the arrest of participants in the takeover. A number of civilians allegedly linked to Arroyo's deposed predecessor Joseph Estrada were also charged.
 
Channel News Asia, Singapore (online edition)
 
Environment & Health
 
Bird flu spreads to Indonesia
 
Asia's bird flu crisis deepened as Indonesia said millions of its chickens had died from the illness, making it the seventh nation to confirm the deadly disease. Thailand, set to host international talks on the epidemic this week, also confirmed the deadly H5N1 strain, which has killed six people in Vietnam, had spread to a second province despite mass poultry culls. Meanwhile China raised its defences against the disease by banning poultry imports from Thailand and Cambodia. An Indonesian government spokesman said 4.7m birds have died since November by a combination of Newcastle disease and a Type A avian influenza. About 60% of the birds died from Newcastle disease. It was not known whether the H5N1 strain was present in Indonesia. Japan, Cambodia, South Korea, Taiwan, Thailand and Vietnam have all reported the strain, while Taiwan has detected only the weaker H5N2. Millions of chickens have been slaughtered in those countries. No deaths have been confirmed from the stronger strain outside of Vietnam, although it is suspected of killing one Thai man. All affected nations have been invited by Thailand to attend ministerial talks in Bangkok on Wednesday (28 January). Officials from China, the European Union, Hong Kong, Singapore, the US, the World Health Organisation and the Food and Agriculture Organisation will also attend.
 
Channel News Asia, Singapore (online edition)
 
Business Day, Thailand (online edition)
 
China Daily, China (online edition)
 
Nihon Keizai Shimbun, Japan (online edition)
 
Korea Herald, South Korea (online edition)
 
Oil & Gas
 
Four Arab premiers to sign gas pipeline deal

The prime ministers of Egypt, Jordan, Lebanon and Syria were set to sign a pipeline deal that will eventually supply liquefied natural gas from Egypt to the other three states. The latest agreement is for a 393-kilometre section from the Jordanian Red Sea port of Aqaba to the Rihab power station in the north of the kingdom that will have a capacity of 10bn cubic metres a year, the office of Jordanian Prime Minister Faisal al-Fayez said. From there the pipeline is due to be extended to the Syrian port of Banias and the Lebanese refinery of Zahrani in 2005, and then Cyprus and Turkey in 2006. King Abdullah II of Jordan and President Hosni Mubarak of Egypt already inaugurated the first section of the pipeline from the Egypt to Aqaba in July last year. Egypt has proven natural gas reserves of 1656bn cubic metres, according to October 2002 figures.
 
Channel News Asia, Singapore (online edition)
 
Science & Technology
 
Taiwan's bullet train nears completion in Japan

A 'bullet train' being built for Taiwan in Japan is set to roll out of the factory this week, rail operator, the Taiwan High Speed Rail Corp (THSRC) said. Taiwan's Transport Minister Lin Ling-san and THSRC chairwoman Nita Ing will attend the ceremony in Kobe on Friday (30 January), a spokeswoman said. Japan is attaching great importance to the multi-billion-dollar project as it is the first time Japan has exported the high-speed bullet train, also known as Shinkansen. A Japanese consortium of seven companies signed the deal with THSRC for the supply of the core system: trains and carriages, signalling system, electrification system, communications system and operation control system, at a price of $3.02bn (Euro2.38bn) in 2000 ahead of the Eurotrain consortium. The seven Japanese companies are Mitsui, Mitsubishi Heavy Industries, Mitsubishi, Marubeni, Sumitomo, Kawasaki Heavy Industries and Toshiba Electric. The first train is scheduled to be shipped to Taiwan in mid-year and set to be tested in Q3.
 
Channel News Asia, Singapore (online edition)
 
Nihon Keizai Shimbun, Japan (online edition)

China's IT mkt see sales of $25.3bn in '04

The sale of software and information technology (IT) products in China is forecast to reach some $25.3bn (Euro19.9bn) this year, up by of 30% compared to 2003, the Ministry of Information Industry has said. Data from the ministry showed that sales hit some $19.3bn in 2003, up 45% year-on-year, making an annual increase of 36% from 2000 to 2003. The R&D of software and system integration has made rapid development in the past years. China now boasts 8582 software enterprises, with 18 000 kinds of products and has also set up six software bases including in Beijing and Shanghai.  China's software export rose to $1.8bn in 2003, which was 4.5 times that of 2000.

China Daily, China (online edition)

Company News

Japan firms invest $11bn in digital electronics

Combined capital investment in Japanese firms' digital electronics products is expected to hit Yen1.2trn ($11.3bn/Euro8.94bn) for the year to March. The figure, a total investment by the nation's 24 major electronics manufacturers for the current fiscal year, represented a 70% gain from a year ago, the Nihon Keizai Shimbun said. The robust capital spending by the electronics firms, including Sony, Canon, Toshiba, Matsushita, Sharp, is expected to continue into the next fiscal year, fueling domestic economic recovery, the business daily said. Combined capital spending by seven major chip manufacturers is likely to hit Yen583bn in the fiscal year, up 69%.
 
Channel News Asia, Singapore (online edition)
 
Nihon Keizai Shimbun, Japan (online edition)
 
So-net M3 plans online drug sales support 

Sony Communication Network's subsidiary So-net M3 will start Internet-based pharmaceutical sales support in the US this spring. It has set up a subsidiary in the state of New Jersey, which will partner with local Internet providers to offer services by renting space on Web sites operated by its partners. The new service will enable doctors and drug companies to engage in one-on-one exchanges of drug- and disease-related information. So-net M3 already operates a similar service in Japan that lets doctors receive information from medical representatives of their choice. It hopes to use the proprietary business model it developed in Japan to break into the US, the world's largest drug market. In the future, it aims to enter the European market as well.

Nihon Keizai Shimbun, Japan (online edition)

Auto output concentrated in 10 plants

Ten leading plants accounted for about 80% of China's automobile production in 2003, according to statistics from the China Association of Automobile Manufacturers. China produced 4.444m automobiles in 2003. The top 10 manufacturers produced 3.548m units, accounting for 79.84% of the total. FAW Group, based in Changchun of northeast China's Jilin Province, claimed top spot with 858 7000 units in 2003. Shanghai Automotive Industry followed closely with an output of 796 900 units, while third place went to Dongfeng Motor, based in central China's Hubei Province, with an output of 470 300 units. The other seven plants reported output in the range of 101 100 units to 406 800 units. They are Chang'an Automobile, Beijing Automotive Industry, Harbin Hafei Motor, Jinbei Automobile, Guangzhou Automobile, Changhe Aircraft Industry and SAIC Chery Automobile.

China Daily, China (online edition)

LG Group to invest Won9.4trn in '04

LG Group, South Korea's largest conglomerate announced on Sunday (25 January) that it plans to invest Won9.4trn ($7.9bn/Euro6.2bn) in facility upgrades and R&D projects this year, up 31% from 2003. LG also said that its affiliates, including home appliance manufacturer LG Electronics and chemical company LG Chem, aim to achieve a total of Won95trn in sales revenue for 2004, 12% above last year, and will hire 5500 new employees, about 10% more than initially planned. The conglomerate will invest Won6.8trn to expand and upgrade facilities, and Won2.6trn on R&D projects. The 2004 facility investment is 33% more than the Won5.1trn that LG spent last year. LG plans to pour Won5.1trn into its electronics and telecommunication units, Won1.2trn into chemicals and energy affiliates and Won500bn into construction, retail and services businesses.

Korea Herald, South Korea (online edition)

Flextronics, Nortel in talks over $500m deal
 
Singapore-based Flextronics International is holding talks with Nortel Networks to take over nearly all of the factories of the Canadian communications network giant in a deal that may be worth more than S$854m ($500m/Euro395m). Nortel said it was in talks to divest nearly all of its remaining manufacturing facilities in Canada, Brazil, Northern Ireland and France and the move could lead to 2500 jobs being shed. Flextronics is the world's largest provider of contract electronics manufacturing services and serves industries such as communications, computer, consumer electronics and healthcare. The completion of the discussions could result in Flextronics undertaking and managing more than $2bn of annual cost of sales and involve the transfer from Nortel to Flextronics of more than $500m of manufacturing and inventory assets.

Channel News Asia, Singapore (online edition)

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