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In Friday's Asia papers

13 August 2004 02:53  [Source: ICIS news]

A summary of political, economic, trade, business and product news affecting the chemical and related industries.
 
International Economics & Politics
 
Japan's Q2 GDP slows to 0.4% growth
 
Japan's economy continued to expand in the April-June period, but at a starkly slower pace than in previous quarters, as disappointing consumer spending and a sharp slowdown in corporate capital spending weighed on growth.  Gross domestic product (GDP) grew 0.4% in the second quarter from the previous quarter, or 1.7% in annualised terms, marking the fifth straight quarter of economic expansion. That was much worse than the average forecast of economists of a 1.0% on-quarter rise and 4.2% annualised expansion, and was also below the 3.0% rise marked by the US in the same period. The Q2 growth was also much slower than the revised 7.4% annualised expansion in October-December and 6.6% rise in January-March.  Brisk exports helped external demand add 0.3 percentage point to Japan's overall growth, although flat capital spending and mediocre private consumption resulted in domestic demand only adding 0.1 point to growth. That suggests the economy is still dependent on exports to sustain its recovery.
 
Nihon Keizai Shimbun, Japan (online edition)
 
US may sanction China over piracy

A top US official warned on Thursday (12 August) that China could face sanctions if it failed to stamp out piracy, which was affecting products ranging from heart medicine to golf clubs. William Lash, an assistant commerce secretary, said China's leaders appeared committed to enforcing patents and copyrights, but did not prevent local officials from shielding pirates.  He said Washington is pressing Beijing to imprison violators, who are usually only fined, if they are punished at all. China is driving a worldwide trade in pirated goods, despite signing commitments as long ago as 1995 to crack down piracy, Lash said. He said China far outstrips the No. 2 source, Russia, which accounts for an estimated $1bn (Euro816m) in annual losses to legitimate producers. Chinese piracy accounts for up to $50bn in annual losses worldwide, with $24bn to US producers alone, he said. The US has not decided on penalties to impose, but a 'growing chorus' of governments want to bring a joint complaint to the World Trade Organisation, he said. Chinese fakes also threaten public safety, he said, showing reporters promotional material for pirate copies of US-made industrial pumps and heart medicine.

Straits Times, Singapore (online edition)

US-Aust free trade deal appears in danger
 
A US-Australia free-trade deal appeared to be in jeopardy as the US warned it had the right to reject new Australian legal amendments. In Canberra, Australian Prime Minister John Howard reluctantly backed opposition Labor Party changes to the deal. The amendments guarantee Australians access to cheap prescription medicines. The prime minister supported the changes so as to get the trade deal through parliament, but he warned that the US might decide the enabling legislation flouts the terms of the agreement. US Trade Representative Robert Zoellick's spokesman, Richard Mills, warned that Washington had the right to ensure that the enabling legislation abided by the terms of the free trade agreement. The US had chosen not to intervene in the internal in Australia for now, he said. US President George W Bush last week signed the agreement into US legislation, describing the deal as "a milestone in the history of our alliance".
Channel News Asia, Singapore (online edition)

Malaysia-Australian ties warming 

Malaysian Prime Minister Abdullah Ahmad Badawi described Australia as a friend in comments that could signal an end to an 11-year spat and ease passage of a free trade deal between the two. The Australian newspaper reported the move on Thursday (12 August) with a front-page banner headline that read: Australia is our mate: Malaysian PM.  It said he had opened a new era in bilateral ties, declaring Australia a 'friend' of his country and of Asean. The two nations had engaged in a slanging match since former Australian prime minister Paul Keating described his Malaysian counterpart Mahathir Mohamad as 'recalcitrant' for not attending a 1993 regional economic summit. Datuk Seri Abdullah said some difficulties remained in bilateral ties, but he was sure they could be overcome.  Malaysia and Australia agreed last month to begin preliminary talks on a free trade agreement, as part of a push by Canberra for a regional deal with Asean. Australia has sealed free trade deals with Singapore and Thailand in the past 18 months and is on the brink of ratifying a trade pact with the US. Two-way trade between Malaysia and Australia is about A$6.4bn ($4.5bn/Euro3.2bn) a year. Two-way trade between Australia and Asean was worth A$34.6bn in the year to June 2003, up 58% from 1998.

Straits Times, Singapore (online edition)

Thailand's car sales fall in July

Thailand's car sales fell for the first time this year in July as consumers awaited a government decision on a revamp of car taxes, the industry said. Toyota Motor Thailand said in its monthly release that 45 426 cars were sold in July, representing a drop of 0.5% from a year ago. Despite the dip, the total of 344 310 cars sold to the end of July still represented a 17.9% increase on the previous year, it said. The industry said it was convinced the upward trend would continue after the Thai cabinet's decision on 27 July to cut duty for smaller and energy saving cars. Three Japanese giant automobile manufacturers Toyota, Isuzu, and Honda retained their grip on the market with their sales accounting for 70.6% of the total, or 32 069 units.

Channel News Asia, Singapore (online edition)

Business Day, Thailand (online edition)

Philippines get $77m EU aid package

The European Union (EU) has signed an agreement to provide an aid package of Euro63m ($77m) to the Philippines from 2004 to 2006, it was announced.
The aid will fund a "good governance program" that will help marginalised sectors of the economy, a joint statement said. The aid is in response to priorities set by the Philippine government, in areas of governance, trade facilitation, combating terrorism, poverty reduction and peace and development, Johannes de Kok, head of the European Community office in that country said in the statement. It did not say how much of the aid was in grants or in loans. Among the programs to be financed by the aid package is a project to give the poor more access to the justice system and another project to prevent corruption.

Channel News Asia, Singapore (online edition)

Manila Times, Philippines (online edition)

Agriculture
 
Malaysia's new growth industry
 
Malaysia is looking to turn durians and rambutans into money spinners and farmers into millionaires as it leans on the farm sector to grow the economy. The government aspires to turn the agriculture sector into a source of wealth and additional income for the country, Prime Minister Abdullah Ahmad Badawi said on Thursday (12 August) at a conference to map out a direction for the sector, which is the third-largest contributor to the Malaysian economy. The target is to export RM17bn ($4bn/Euro3bn) worth of agriculture produce annually from 2010. Food exports now stand at RM7bn/year, but the country has to import RM13bn worth of food. That is an imbalance which the government is keen to reverse. The importance of agriculture was signalled in the early days of Abdullah's government. Soon after the March general election, he appointed senior party leader Muhyiddin Yassin as agriculture minister. Muhyiddin has spent the past few months formulating new strategies for the industry, including ways to promote sales of local fruit such as durians and rambutans.  Marketing offices would be set up in main export markets such as the European Union and China. Another initiative was to ask government-linked companies and other big firms to enter the sector. The government also plans to post agricultural attaches at overseas missions to attract foreign investment.
 
Straits Times, Singapore (online edition)
 
Environment & Health
 
Vietnam confirms three deaths from bird flu
 
The World Health Organisation (WHO) said the Vietnamese government had confirmed three people had died from bird flu. The WHO said the deaths of the three, who were among a group of people hospitalised between 19 July and 8 August, were the first cases officially recorded in Vietnam since February. The United Nations health agency had said on 16 July it was concerned about the potential spread of bird flu into humans following new, simultaneous outbreaks of the disease in poultry in Thailand and Vietnam. In July, Thailand announced a sharp increase in outbreaks of a lethal strain of H5N1 bird flu in poultry and confirmed it had reached the capital Bangkok. Vietnam confirmed last month that the same highly pathogenic strain of bird flu was present in its poultry stocks. Eight people died in Thailand and 16 in Vietnam from an outbreak early this year, when the strain of bird flu crossed the species barrier and infected humans in direct contact with diseased poultry.

Channel News Asia, Singapore (online edition)
 
Life Sciences
 
Britain grants first licence to create stem cells
 
Britain gave the go ahead on Wednesday (11 August) for human cloning, granting a licence to scientists bidding to become the first in Europe to create stem cells used in medical research from a cloned human embryo. The green light was given to scientists from the Centre for Life at Newcastle University, northern England, who aim to use the stem cells cloned to treat serious diseases. But they warn it will be at least five years before patients could receive stem cell treatments based on their work. Stem cell technology is intended to create material that could one day treat diabetes, cancer, Alzheimer's disease and other disorders, and not to make a cloned child, scientists said. Human embryo cloning has been pioneered in South Korea, with a team from Seoul National University announcing in February it had created stem cells using the technique. Scientists in the US, where legally research must be funded privately, have tried so far unsuccessfully to create stem cells cloned from human embryos.
 
Business Day, Thailand (online edition) 
 
S'pore study on eye diseases among Malays
 
A three-year project to study the prevalence of common eye diseases among Malays was launched on Thursday (12 August) at the Singapore Eye Research Institute. Said to be the first of its kind to be carried out in the Malay community, the study may help doctors better target treatments for the estimated 300m Malays in the region. It aims to find out if Malays are genetically predisposed to any of the problems and how lifestyle factors such as smoking, diet and a lack of alcohol impact on visual health. A total of 3200 adults aged 40 to 80 will be studied over the next three years. Small pilot projects that the institute conducted previously found that conditions such as acute glaucoma and retinal detachment may be less common in Malays than among the Chinese and Indians. The Singapore Malay Eye Study is the second of a three-part race-based endeavour to examine the visual health of the Chinese, Malays and Indians there. A similar study on 1200 Chinese residents in the late 1990s found one in three adults had cataract, about four in 10 had myopia and about three in 100 had glaucoma.
 
Straits Times, Singapore (online edition)

Oil & Gas
 
World oil prices hit new highs on battle in Najaf
 
World oil prices soared to all-time highs as the launch of a big battle for Iraq's holy city of Najaf spread fear of a retaliatory attack on the oil industry. Light sweet crude for delivery in September soared 70 cents to finish at $45.50/barrel, a record settlement price. London's benchmark Brent North Sea crude for September shot up 72 cents to a record finish of $42.29. The attack spread concerns on the world oil market about a threat by Shiite Muslim militia to blow up major pipelines in the event of such an assault, analysts said. US marines and warplanes spearheaded a massive two-pronged assault to crush a Shiite Muslim uprising in Najaf after 24 hours of nationwide fighting left 165 Iraqis dead and 600 wounded. Shiite militia repeated a threat to attack oil infrastructure in the face of the US-led offensive. The world market has ignored Saudi Arabia's renewed insistence this week that it has immediate spare capacity of 1.3m barrels/day.  Traders were also on alert for a referendum on Sunday in Venezuela on the rule of President Hugo Chavez, amid concern the vote could lead to a crippling strike and a reduction of oil exports. The fifth largest crude exporter, Venezuela supplies about 15% of the oil imported by the US. The financial crisis engulfing Russian oil titan Yukos added support to rising prices.
 
Channel News Asia, Singapore (online edition)
 
China still thirsting for oil despite price surge

In a few short years, China has grown into the world's No. 3 oil importer, depending on foreign crude to fuel its factories and cars and cool its shopping malls. Even as world oil prices surge past $45/barrel and South Korea and other Asian economies struggle to cope with the rising cost, China's consumption shows no sign of slowing. China's economy is based on energy-intensive manufacturing, but labour is so cheap that it can cope with higher prices, experts said. And as its massive workforce shifts from farms to factories, they said demand for fuel will soar.  Elsewhere in the region, Japan looks set to ride out the price boom, insulated by energy-efficient industries .It could even profit from rising demand for innovations such as electric cars and refrigerators that recycle heat.  And as its neighbours struggle, oil producer Indonesia could reap an export windfall.  China's oil consumption jumped 11.5% last year to 6m barrels/day, with 2.5m of them imported, according to figures from the British oil company BP. China is responsible for a third of the growth in global oil demand, according to the Paris-based International Energy Agency. Such pressure has fed fears abroad that China is driving up prices.

 
Straits Times, Singapore (online edition)

Report: Australia bows to E Timor gas demands

Australia has accepted demands by East Timor for increased revenue from disputed Timor Sea oil and gas fields, in a bid to keep the issue off the agenda at upcoming elections, it was reported. Canberra's U-turn would concede about $5bn (Euro4bn) in revenue from the Greater Sunrise gas field to East Timor, almost half the project's expected yield, The Australian newspaper said. Australian Foreign Minister Alexander Downer had previously insisted East Timor would get no more than 20% of revenues and likened Dili's demands to Mexico asking the US to give Texas back. The unsourced report said the plan was yet to be approved by the Australian cabinet. It will reportedly maintain the existing maritime boundary between Australia and East Timor but give Dili more revenue than it would normally receive under such a border. Downer and his East Timorese counterpart Jose Ramos-Horta held talks in Canberra on Wednesday (11 August) but refused to reveal details because formal negotiations are not scheduled to resume until next month. However, both were optimistic a deal could be reached by the end of the year, the deadline set by the Greater Sunrise project's lead developer Woodside.
 
Channel News Asia, Singapore (online edition)

Pharmaceuticals
 
Cambodian PM orders halt to HIV vaccine trial

Cambodia's Prime Minister has ordered a halt to a planned Bill Gates-funded HIV human vaccine trial, health officials said. Hun Sen called off the plans to test Tenofovir in Asia's worst HIV-affected nation because of the potential of side effects and human rights issues, the health ministry said. The drug is used to treat HIV patients but the study was attempting to discover if it could reduce the risk of HIV among uninfected but sexually active adults. Hun Sen said the trials should be carried out on animals and had urged Cambodians to opt out of the research saying the nation was not a test bed for outdated technologies. The HIV prevalence rate has fallen from four to 2.6% over the past two years in Cambodia, but remains the highest on the continent. Some 960 sex workers were set to take part in the trial, partly funded by the Bill and Melinda Gates Foundation, but boycotted it saying they wanted medical insurance for side effects for up to 40 years after the study.  Researchers said they could not afford the insurance and the dispute had delayed the trial by several months.
 
Channel News Asia, Singapore (online edition)
 
Company News & Results
 
Tepco, Kansai Elec to boost power output
 
Japan's Tokyo Electric Power Co (Tepco) and Kansai Electric Power will sharply increase operation of conventional power plants in response to record heat and the spectre of nuclear power facilities going offline.  A fatal steam leak accident on Monday (9 August) at Kansai Electric's Mihama nuclear power plant in Fukui Prefecture could lead to the shutdown of other nuclear facilities for inspection. Tepco will boost electricity output from fossil-fuel plants in August and September by 15% over initial plans, and Kansai Electric next week will resume operation of facilities that have been offline.  As a result, both firms are increasing procurement of petroleum and liquefied natural gas by 10-20%. Other power firms are also increasing procurement of fuel for fossil fuel plants. Heavy oil consumption by the nine major electricity providers in July reportedly reached 660 000 kilolitres, up 10% on the year
 
Nihon Keiza Shimbun, Japan (onlin edition)
 
NPC posts 46% rise to Baht734m net profit

Thailand's National Petrochemical (NPC), a unit of PTT and Siam Cement, said that it posted a 46% rise in net profit from Q2 operations this year to Baht734m ($17m/Euro14m), mainly boosted by sales of olefins products. President Viroj Mavichak said the net profit was a rise from Baht502m posted a year ago. The higher net profit was mainly boosted by its sale revenue from olefins products and utilities of Baht4.6bn, a 35% rise from the same quarter last year. The increase in sales was partially boosted by selling price that was traded in the US dollar. Other sales came from electricity and steam that also increased from last year. Viroj said that construction of NPC's high density polyethylen was now completed and already operating to supply ethylene gas to its plastic pallete plant. Its new plastic palette product will be sold under registered trademark of NPCX.
 
Business Day, Thailand (online edition)
 
(Some stories may not appear in all editions of the cited news media.)




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