In Wednesday's Morning Papers

14 December 2005 02:02  [Source: ICIS news]

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

International Economics & Politics

Japan: Yen7.5bn for Asian integration

Japan told Southeast Asian nations on Tuesday (13 December) that it will provide Yen7.5bn ($62.63m/Euro51.98m) to support moves towards regional integration, as part of Tokyo's efforts to forge closer ties with Asian neighbors. The pledge for financial aid was made in a joint statement announced after Japanese Prime Minister Junichiro Koizumi met the leaders of the 10 members of the Association of Southeast Asian Nations (Asean). Coming on top of a $135m package announced on Monday to help Asian nations battle bird flu, Japanese officials said the new funds showed Tokyo's commitment to the region and symbolised the close relationship between them. Japanese officials hailed the document, saying it was the first time that Asean has released a joint statement with a dialogue partner during its annual gathering. The two sides also reaffirmed their efforts to conclude negotiations on an economic partnership agreement by April 2007.

Jakarta Post, Indonesia (online edition)

Japan Times, Japan (online edition)

Japan, Malaysia ink deal on bilateral FTA

Prime Minister Junichiro Koizumi and his Malaysian counterpart, Abdullah Ahmad Badawi, signed a bilateral free-trade agreement (FTA) in Kuala Lumpur on Tuesday (13 December). The agreement is expected to take effect around next autumn, a Japanese official said. Under the pact -- Japan's third after deals with Singapore and Mexico -- the two countries will do away with tariffs on essentially all industrial goods and most agricultural, forestry and fishery products within 10 years. The FTA eliminates duties on 94% of Malaysian exports in terms of value, and 99% of Japanese exports, including cars, on which Malaysia has imposed high tariffs to protect its domestically manufactured vehicles. The two countries reached a basic accord in May after launching official FTA negotiations in January 2004.  The agreement also covers services trade, intellectual property-rights protection, investment rules, competition policies, business facilitation and cooperation projects for personnel training in Malaysia. Japan imports mostly natural gas, agricultural products and machinery from Malaysia, while Malaysia imports machinery, steel and transport equipment.

Japan Times, Japan (online edition)

New Straits Times, Malaysia (online edition)

China Daily, China (online edition)

China queries Japan's huge military expense

Foreign Ministry spokesman Qin Gang delivered a stern rebuke to Japan on Tuesday (13 December), refuting claims that China poses a threat to neighbouring countries. Qin said accusing remarks by Democratic Party of Japan President Seiji Maehara, who said China is a practical threat and urged Beijing to increase military transparency, is groundless. He noted that China hopes the Japanese Government and public figures would contribute to improve a bilateral friendship. Qin said in a news conference that China adheres to peaceful development and a defensive national defence policy. He added that its military expenditure should not only cover the livelihood and training expenses of those serving in the army but also meet the country's current national defence requirements in a world with numerous complicated changes. Qin said China's military expenses reached $25.6bn (Euro21.2bn) last year while Japan reportedly spends 1.62 times of that amount. In per capita expense, China is only $23, compared to Japan's $2300. Maehara, 43, made his first diplomatic mission with a weeklong visit to the US on 6 December, and touched down in Beijing on Sunday for a three-day visit.

China Daily, China (online edition)

China to play bigger role in WTO talks

Minister of Commerce Bo Xilai said on Tuesday (13 December) that he expects the sixth World Trade Organisation (WTO) ministerial meeting to achieve progress in bringing more benefits to developing countries, adding that China was ready to make a mark in framing global trade rules. Development is the theme of the Doha round of talks, and all members have reached a consensus on that, Bo said after a bilateral meeting with Celso Amorim, Brazilian Minister of State for External Relations. As the biggest developing country, China's major aim is to protect the interests of developing countries while pushing for progress, said Bo, adding the country was well prepared for tough negotiations. Failure of the Hong Kong meeting could mean an impasse in global free trade and result in revival of protectionism, which could be disastrous to China's export-oriented economy, said the minister.

China Daily, China (online edition)

Upgrade in Asean-Russia ties

The new summit-level relationship between the Association of Southeast Asian Nations (Asean) and Russia took off on Tuesday (13 December), with the issue of difficult relations between North Korea and South Korea and the situation in the Middle East tabled for discussion. Malaysian Prime Minister Abdullah Ahmad Badawi said those issues were among several raised at the inaugural summit being held after nine years of dialogue-partner relations. He said Asean members and Russia were happy with the upgrading of relations, which would help steer their partnership to further heights. Abdullah said next year would see the 10th anniversary of the Asean-Russia dialogue partnership, and special programmes were being planned for the occasion. He said the tone of future relations between Asean and Russia would depend to a large extent on the joint declaration on a progressive and comprehensive partnership between Asean and Russia signed on Tuesday; and a comprehensive action plan for Asean-Russia partnership.

New Straits Times, Malaysia (online edition)

Channel News Asia, Singapore (online edition)

Korea, Asean sign framework pact on FTA

South Korea and Southeast Asian nations signed an accord on Tuesday (13 December) that calls for completing negotiations by the end of 2006 on freeing up trade, though a major hurdle remains over a rice import dispute with Thailand. The framework agreement sets out basic principles and targets with the ultimate goal of creating a market of 548m people with a combined economy of more than $1.4trn (Euro1.1trn). South Korean President Roh Moo-hyun and his counterparts from the 10-member Association of Southeast Asian Nations (Asean) inked the accord after their annual meeting in Malaysian capital of Kuala Lumpur. An overall free trade deal also involves four other pacts dealing with goods, services, investment and dispute settlement. A rice dispute, however, has complicated the pact on trade in goods. The goods pact was signed last week by Seoul and nine of Asean's 10 members after Thailand, the world's top rice exporter, decided to stay out of it, objecting to South Korea's insistence on excluding rice from the accord. Asean-Korea trade last year amounted to $40.2bn, up nearly 25% from 2003.

China Daily, China (online edition)

Korea Herald, South Korea (online edition)

Business Day, Thailand (online edition)

Jakarta Post, Indonesia (online edition)

Environment & Health

Russia to join China in containing toxic slick

Chinese Prime Minister Wen Jiabao on Tuesday (13 December) pledged to work with Russia to contain a river-borne toxic slick, which was caused by an explosion at a Chinese chemical plant and is expected to hit Russian territory this week. In a brief discussion with Russian President Vladimir Putin on the sidelines of the first Russia-Asean summit, Wen and Putin agreed that the 13 November incident should not harm bilateral relations, Foreign Ministry spokesman Liu Jianchao said. Putin has noted the important measures taken by China and said that he hopes that both sides can continue their co-operation on mitigating the damage brought on by the pollution incident, Liu said. The comments came a day after the two countries launched a joint mission to monitor the flow of the toxic spill, which dumped 100 tonne of benzene compounds into China's Songhua River, as it edges near Russia's Amur River.

China Daily, China (online edition)

Oil & Gas

Pertamina in Libyan blocks deal

Indonesian state oil and gas firm Pertamina has signed contracts with Libya to explore and develop two oil and gas blocks, committing $49.1m (Euro40.7m) in the first five years of the exploration period. Pertamina will conduct seismic tests and drill two wildcat wells in Sirte block in the Sahara desert and another two wells in Sabrata block in the Mediterranean Sea during a five-year exploration period, a company spokesman said. Pertamina was one among 19 companies that were awarded tenders in October to explore blocks in Libya, where Africa's largest crude oil reserves lie. The company agrees to receive 8.8% of output in Sirte and 11.7% in Sabrata, lower than at least 15% usually applied in Indonesia. Pertamina plans to spend $3.6bn to develop the blocks over the 30-year contract period under an agreement with Germany's Commerzbank. The company will start exploration in both blocks next year and has targeted onstream production to commence in 2009.

Jakarta Post, Indonesia (online edition)

Philippines urges joint Asian exploration

Disputed Asian seas could become sources of energy instead of conflict if the countries claiming them could agree to jointly explore for oil, the Philippine president said. Gloria Macapagal Arroyo told reporters late Monday (12 December) that Southeast Asian countries could also turn to alternative sources of energy like ethanol and fuel made from agricultural products to deal with the high global oil prices. She was in Kuala Lumpur to attend summit meetings of the Association of Southeast Asian Nations, and Asean's summit with China, Japan and South Korea. The latter three countries could provide financial backing for R&D of alternative energy sources, she said. Arroyo said that an agreement in March by the national oil companies of the Philippines, China and Vietnam to explore for oil and gas reserves in the Spratlys, a disputed South China Sea region, could be a model for other disputed regions.

Jakarta Post, Indonesia (online edition)

Company News

Shell sets $19bn spending target

Royal Dutch Shell, the world's third largest publicly-traded oil company, increased next year's planned spending for drilling and equipment by 27% as it seeks to increase production amid rising costs. Capital investment will be $19bn (Euro15.7bn) next year, Shell said in a statement, up from earlier forecasts of $15bn.  Rising prices for labour and raw materials such as steel have sent costs soaring at projects including Shell's Sakhalin-2 venture. Its Bonga offshore oilfield in Nigeria started late and over budget. Chief executive officer Jeroen van der Veer said in October that new projects were beginning in countries such as Oman and Brunei, with drilling achieving a 72% success rate.

New Straits Times, Malaysia (online edition)

Perodua set to strengthen ops

Malaysia's second national car company Perusahaan Otomobil Kedua (Perodua) has set aside an initial RM300m ($81m/Euro67m) budget to strengthen operations and expand product offerings next year. Its managing director Hafiz Syed Abu Bakar said the next generation of Perodua cars after the instant hit, Myvi, could roll out of its assembly line within the next 18 months. Until then, the second national car company is expected to introduce more variants to its existing models. Perodua expects to sell about 152 000 cars next year, against about 140 000 this year and 120 000 cars in 2004. Hafiz said Perodua's capital expenditure for 2006 should be much higher if the company decides to go for capacity expansion.

New Straits Times, Malaysia (online edition)

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

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