In Friday's Asia papers

 

 

 

The Bank of Japan (BoJ) vowed to continue supporting the nation's recovery with a stimulative monetary policy while remaining cautiously upbeat about the economic outlook. As widely anticipated, the nine-member policy board voted unanimously to leave its ultra-easy monetary policy unchanged at the end of a two-day meeting. Despite strong domestic economic growth, the central bank had made it clear that it would maintain low rates and ample liquidity until deflation gives way to mild inflation sometime next year. Governor Toshihiko Fukui said that the bank was at this point not even discussing shifting policy to a neutral stance. The BoJ has scheduled the next policy meeting for 14-15 June. In a monthly report also released on Thursday (20 May), the bank maintained its view that Japan's economy continued to recover gradually and that domestic demand is becoming firmer. Exports have been increasing substantially and business fixed investment continued its path of recovery. Industrial production was increasing, while the decline in household income was gradually coming to a halt, the bank said, adding that private consumption was showing some positive movement. As for the outlook, Japan's economy is expected to gain further momentum gradually as it continues to recover moderately for the time being. The central bank has been pumping massive amounts of liquidity into the money markets to ensure there are ample funds for potential borrowers and to keep expectations of short-term interest rate levels low.

 

 

Negotiations on the establishment of a China-Asean (Association of Southeast Asian Nations) Free Trade Area (FTA) are expected to wrap up before 30 June, said a source close to the talks.  The China-Asean FTA Negotiation Committee has held dozens of meetings and has reached a basic consensus on the trade arrangement, he added. The committee set up three working groups governing rules of origin, trade of goods and trade of services and investment.  Agriculture, information and communication technologies, human resources development, mutual investment and the development of the Mekong River have been identified as priorities for immediate cooperation. The source said that drawing up rules on the place of origin have taken the most effort as many issues and products should be taken into account, he said. The source believed the China-Asean FTA will be launched as scheduled and will help to tap the region's huge potential. The world's largest FTA, which covers 1.7bn consumers with a combined gross domestic product of $2trn (Euro1trn), is set to start in 2010. China is a huge market for Asean countries and the nation has trade deficits with them. China's imports from Asean countries surged by 50% to $47bn last year, compared to exports of $31bn, increasing by 30%. Imports continued to increase by 42.5% to $13.8bn and exports totalled $8.1bn, up 31.9% in Q1 of this year.

China Daily, China (online edition)

S Korea's inward foreign investment down

 

 

 

 

 

 

 

 

India's prime minister-elect, Manmohan Singh, pledged a "relentless war" on poverty, saying the nation's economic reform drive must embrace all Indians while stressing he wanted a strong private sector. Setting out his vision, Singh, nicknamed the 'liberator' of India's economy for opening it up to the world during an earlier stint as a finance minister, said his communist-backed Congress government would seek to realise former prime minister Rajiv Gandhi's dream of making "the 21st century India's century." Singh, a self-effacing economist who studied at Oxford and Cambridge, said the government's economic programme would be worked out with its communist, leftist and regional partners in a couple of days. Singh added there would be no more sales of stakes in money-spinning state-run oil giants such as ONGC and GAIL in which the previous government offloaded big chunks earlier this year, raising billions of dollars. In response to that, India's most closely tracked stock index, the Bombay Stock Exchange's benchmark Sensex, sank below the psychologically key 5000 level. Overall, though, market sentiment was positive about Singh taking charge of Asia's third-largest economy, which expanded 10.4% in Q3 and is expected to post over 8% for the full year to March 2004. Market's eyes were now trained on who would be finance minister. Two former finance ministers were seen as front-runners: Pranab Mukherjee and P Chidambaram. Analysts were concerned populist measures could inflate India's fiscal deficit but also said they were confident if anyone could control Congress's leftist allies it would be Singh.

 

 

 

 

Chemical giant China National Blue Star will heavily invest in Shenyang, capital of Northeast China's Liaoning Province where it merged with a local chemical company recently. The state-owned Blue Star plans invest Rmb7.5bn ($905.8m/Euro751.8m) in Shenyang within the next four years, said a company spokeswoman. Earlier May, Beijing-based Blue Star took over Shenyang Chemical Group, including its 46.66% stake in the Shenzhen-listed Shenyang Chemical Co under a free State asset transfer deal. The merger is the latest move by Blue Star to reinforce its position in China's chemical market. Last year, the company acquired nine petroleum, chemical, rubber and tyre producers in China. The central government has approved Blue Star's consolidation with another chemical conglomerate, China Haohua Chemical. The two firms will be combined into one entity to be named China National Chemical Industry (Group). Meanwhile Blue Star has held up merger negotiations with South Korea's Ssangyong Motors due to disagreement on the sale price. In February, the company signed a letter of intent with British automobile produce Manganese Bronze to set up a joint venture in Lanzhou, capital of Northwest China's Gansu Province. The two parties plan to invest $350m in the proposed venture to build 50 000 taxis/year for the British firm. Blue Star, which was founded by a group of government officials in the chemical industry in 1984, reported sales of Rmb10.2bn last year, jumping 67% from a year ago. It's assets now total Rmb20bn, up from Rmb10 000 in 1984.  

 

 

 

 

China will give priority to the development of the urban public transportation system in the next five years, said Vice Minister of Construction Qiu Baoxing at the National Urban Public Transportation Conference, that opened in Beijing on Wednesday (19 May).  Qiu said  that giving priorities to the urban public transport development will not only help ease the urban traffic jams, but also improve the urban living environment and realise sustained development in cities. The urban public transportation system includes public buses, electric buses, subways, taxis, ferries and other public transport vehicles, Qiu said. The ministry has set an initial five-year goal for developing urban public transport.  In the next five years, all local governments will build more public transportation infrastructures and special public transport roadways in the urban areas to ensure public vehicles run on designated roadways or have preference over certain roadways.

China Daily, China (online edition)

Clean energy autos to race in Shanghai

China's first environmentally-friendly vehicle competition will be held in Shanghai in October. Entitled 'Challenge Bibendum', the competition will be held at the Shanghai International Circuit, the location of September's China Formula One Grand Prix. The annual event will feature vehicles powered by the world's latest environmentally-friendly automobile technologies. All the participating vehicles from major manufacturers in Asia, Europe and North America will be evaluated on factors such as energy efficiency, emissions, noise, acceleration and handling.  A number of proto-type and batch-production vehicles, all equipped with clean-energy sources such as fuel cells, hybrid fuel, biofuel, diesel, hydrogen and natural gas, will participate. China has invested Rmb2.4bn ($290.2m/Euro240.8m) towards a project to develop electric vehicles, and as a key part of that project's anticipated achievements, the country's fuel cell buses and cars will hopefully be put into pilot operation during the 2008 Beijing Olympics Games.

China Daily, China (online edition)

Toxic tanker crash taints river in China

 

 

 

 

 

 

 

 

Japan plans join the US and Europe in calling the Organization of Petroleum Exporting Countries (Opec) to raise crude oil production.With oil prices at record levels, energy officials plan to lobby for increased output at the International Energy Forum in Amsterdam starting Saturday (22 May). Participants are scheduled to discuss measures aimed at stabilising oil prices and boosting investments to ensure that oil producing nations are able to sustain their supplies. The Opec nations, which plan to hold informal discussions at the forum, are expected to reach a basic agreement to lift its output ceiling from the current 23.5m barrels/day. But with some Opec members already selling more than their allotted amount to the oil market, the higher official production cap will probably not push down oil prices significantly, analysts said. Soaring oil prices are also expected to be high on the agenda at this weekend's (22-23 May) meeting of Group of Seven finance ministers in New York. Participants are expected to discuss the necessary steps to ensure that rising oil prices will not impede global economic growth.

 

 

 

 

China will continually inject capital into R&D of nanotechnology, a major basic research field officials believe needs strong government backing. Deng Nan, vice-minister of science and technology, said the government has made clear its nanotechnology research goals in its middle and long-term national science and technology plan (2006-2020). But she did not elaborate on the specific objectives.  Deng was speaking at a conference on Thursday (20 May) at which a national committee on nanotechnology accreditation was being set up. The new committee, a branch under the China National Accreditation Board for Laboratories, is responsible for laboratory accreditation of nanotech research and nanotech products. To further promote research in the field, the National Centre for Nanotechnology on  Thursday (20 May) recruited four leading researchers as chief scientists. The centre was founded last year with multi-million dollars investment from the government.

 

 

 

 

Takara Bio, the biotechnology arm of Takara Holdings on Thursday (20 May) announced research results suggesting that fucoidan oligosaccharide, derived from a certain seaweed, can inhibit the formation of blood clots when taken orally. Fucoidan is a polysaccharide found in several types of brown seaweeds. Takara Bio holds the patents on a certain degradative enzyme. Because fucoidan oligosaccharide inhibits blood clots without interfering with the body's ability to stop bleeding --- a problem with heparin -- Takara Bio is thinking to market the substance for use in beverages and health foods.

 

 

Bangkok Bank, as a creditor of the Thai Petrochemical Industry, said it has no objections to a plan to bring in PTT and Siam Cement (SCC) as TPI's partners, should the plan win the endorsement from the company's administrators. Analysts said TPI is likely to submit a revised debt restructuring plan to the Minister of Finance for consideration after the no-confidence debate against the government by the opposition parties ends. Once the plan is approved, TPI's administrators may invite  CC and PTT to conduct a due diligence on TPI's assets and debts. Bringing in potential partners to buy shares under debt-to-equity conversion schemes is part of the obligations in the revised debt restructuring plan, analysts said. The plan clearly stipulate that should TPI want to exit from the court-prescribed business rehabilitation process, then it has to bring in partners to purchase shares from the debt-to-equity scheme first.

Business Day, Thailand (online edition)

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