In Friday's Asian Papers
17 February 2006 02:31 [Source: ICIS news]
(Update: Adds ChemChina news)
A summary of political, economic, trade, business and product news affecting the chemical and related industries.
International Economics & Politics
Asian currencies fall on US rates outlook
Asian currencies fell on speculation that global investors will sell regional stocks and flock to the US after Federal Reserve (Fed) chairman Ben S Bernanke said interest rates may increase. The region's currencies benefited after the Fed on 31 January stopped saying rates will climb at a "measured" pace, a statement that had accompanied the previous 13 rate increases. Bernanke's comments revived bets that the US rate increases will woo funds from Asia as investors seek higher yield. "The economic expansion remains on track in the US," Bernanke said on Thursday (16 February) in testimony to the House Financial Services Committee. In addition to high energy prices, "another factor bearing on the inflation outlook is that the economy now appears to be operating at a relatively high level of resource utilisation." Overseas fund managers this week were net sellers of stocks in South Korea and Taiwan, where interest rates are lower than in the US. Higher US rates also may diminish the appeal of assets from Thailand, where the benchmark rate is currently on par with those in the world's biggest economy.
New Straits Times, Malaysia (online edition)
Japan eyes selling prime property
A seven-member team of academics, real estate experts and a lawyer commissioned by Japan's Finance Ministry, hopes to have a list by May of prime real estate housing that the government can sell over the next five years to help reduce its snowballing debt. The committee hopes to add Yen300bn ($2.5bn/Euro2.1bn) to government coffers by consolidating housing, selling off low-occupancy apartments on prime real estate and selling or leasing property in partnerships with real estate firms. It also envisions partnerships with the Tokyo Metropolitan Government and ward offices, which are interested in developing property. Government housing includes apartment buildings managed by the ministries, as well as apartments for Diet members and the official residences of the prime minister, chief Cabinet secretary, the speaker and vice speaker of the Lower House, the Upper House president and vice president, and the chief justice of the Supreme Court. The property's total value was estimated in 2004 to be worth Yen532bn. However, occupancy rate was only 50% in September.
Japan Times, Japan (online edition)
Bernanke: China's might no threat
US Federal Reserve Chairman Ben Bernanke, barraged with lawmakers' questions on Thursday (16 February) over rising foreign ownership of the country's assets, played down fears that China held enough dollars to endanger the US economy. In a second day of Capitol Hill testimony, the new central bank chief was hard pressed by Senate Banking Committee members about whether soaring US trade deficits, financed by foreign borrowing, made the economy and the dollar vulnerable. US congressional anger toward China has grown along with soaring US trade deficits that hit a record $725.8bn in 2005 -- allegedly 28% of that with China alone. However, China puts its trade surplus with the US in 2005 as $114.20bn. But a large part of China's exports to the US are from US-invested companies, according to Vice Commerce Minister Yi Xiaozhun. Excluding that factor, both Chinese and American reap equal benefits from bilateral trade.
China Daily, China (online edition)
China urges Pakistan to catch killers
Chinese leaders expressed "deep concern" over the killing of three Chinese engineers gunned down in the southwestern province of Baluchistan in Pakistan and demanded that the Pakistani authorities catch the killers. In spite of the killing, China does not plan to evacuate engineers and technicians from Pakistan, Foreign Ministry spokesman Qin Gang said at a press conference on Thursday (16 February). However, he advised Chinese in Pakistan to be on alert and to take effective measures to protect themselves. Gunmen on motorcycles shot dead three Chinese engineers working for a cement plant and their driver in Baluchistan province on Wednesday. Pakistan's President Pervez Musharraf is due to arrive in China on Sunday on a five-day official visit to strengthen economic, political and defence links between the regional allies.
China Daily, China (online edition)
Jilin's frontier economy gears up
Northeast China's Jilin Province is revving up for greater growth in foreign trade and investment. According to the provincial department of commerce, local industrial strength, especially in five major categories, will be leveraged to bolster export growth. The categories are vehicles and automobile components, farm products, furniture and wooden products, medicine, fabrics and textiles. Statistics show that export volume in the five categories amounted to $1.51bn (Euro1.2bn) last year, accounting for 61.2% of the total in the province. This year, the beginning of the 11th Five-year Plan period (2006-2010), will see continuous efforts to promote export growth. According to statistics on the website of the provincial department of commerce, actual foreign investment in the province stood at $661.15m last year, 46.1% higher than the year before. This year the figure is expected to rise by 40%. Experts are optimistic about achieving the goal because of increasingly friendly investment environment in the province.
China Daily, China (online edition)
Australia to build schools in Indonesia
Ambassador Bill Farmer promised in a speech on Wednesday (15 February) that in the next four years Australia would build 1500 junior high schools, rebuild roads and bridges, and assist the Indonesian economics and other ministries in ensuring effective implementation of their policies. He said those efforts would be part of the Australia-Indonesia Partnership for Reconstruction and Development (AIPRD), which was established by the Australian and Indonesian governments last year. The programme aims to support Indonesia's reconstruction and development efforts in areas affected by the Indian Ocean earthquake and tsunami in December 2004. The new ambassador noted that Australia would add $1bn to its assistance to Indonesia over the next five years for reconstruction and development, bringing its total financial support to almost A$2bn ($1.4bn/Euro1.2bn).
Jakarta Post, Indonesia (online edition)
Malaysia's FDI hits 4-year high
Malaysia, which saw approved foreign direct investment (FDI) hit a four-year high in 2005, is competing with the world, not just China and India, for FDIs. FDIs last year totalled RM17.9bn ($4.8bn/Euro4.0bn) in 562 projects compared with RM13.1bn in 583 projects in 2004. Major sources of FDIs were from the US (RM5.2bn), Japan (RM3.7bn), Singapore (RM2.9bn), Netherlands (RM1.7bn) and South Korea (RM673.6m). Total approved investments, both domestic and foreign, in the manufacturing sector increased significantly to RM31bn covering 1026 projects from RM28.7bn for 1101 projects in 2004. When asked to forecast this year's outlook, International Trade and Industry Minister Rafidah Aziz Rafidah said, Malaysia expects an average of RM25bn in investments based on the past trend. This year, Rafidah will be leading missions to Europe, the US, Japan, Taiwan, China, South Korea and Australia to woo investors "who want to be part and parcel of the global supply chain".
New Straits Times, Malaysia (online edition)
Malaysian PM defends new Cabinet line-up
Responding to critics who said he had not removed "dead wood" and who had described the reshuffle as "musical chairs", Prime Minister Abdullah Ahmad Badawi said he had confidence in his ministers. Abdullah believed that with good planning, the ministers would play their roles in ensuring the success of the Ninth Malaysia Plan (9MP). Abdullah said he had retained ministers who performed and changed portfolios of some to widen their exposure and experience. The reshuffle two days ago saw eight ministries getting new heads, while two ministers resigned and two were dropped. Abdullah said he also directed state governments to help accelerate the growth of the agriculture sector and promote agro-based industries by allocating land for such purposes.
New Straits Times, Malaysia (online edition)
Singapore GDP growth may hit 4-6%
Ahead of Friday's Budget, Singapore on Thursday (16 February) raised its official economic growth forecast for the year amid surging electronics exports. The economy is now expected to grow between 4 and 6%, which is higher than the 3 to 5% forecast earlier. This was boosted by expectations that global economic growth will continue and a stronger 'feel-good' factor among Singapore consumers. The upgrade comes after latest figures for the last three months of the year showed economic growth racing ahead. Growth was up 8.7% compared with the same period a year ago, fuelled by an upturn in the global electronics market and robust demand for trading and financial services. That propelled full-year expansion to 6.4%, above an earlier official estimate of 6%. The Ministry of Trade and Industry said that the good growth momentum is likely to carry through to 2006. The picture may be even rosier - experts, who have long upgraded their own predictions, said the latest forecast is still on the 'conservative side', especially if oil prices tumble from last year's highs.
Straits Times, Singapore (online edition)
Oil & Gas
ExxonMobil bids for two drilling areas
ExxonMobil, the world's largest publicly traded oil company, said it is bidding for two oil and gas exploration areas in Indonesia's Makassar Straits to boost reserves in the country as existing fields aged. ExxonMobil submitted a bid for the Pasangkayu and Surumana areas offered by the government in June, an official from the company’s Indonesian unit, said in a phone interview. The government may announce the winners next week. In June, the government said oil companies that develop the Pasangkayu and Surumana areas will get 35% of any oil production, leaving 65% for the government. The companies would get 40% of any gas output, leaving 60% for the government.
Jakarta Post, Indonesia (online edition)
Chemicals
ChemChina invests in Cangzhou Dahua
China National Chemical Corporation (ChemChina), one of the leading producers of chemical products in China, is expected to invest US$8.93 billion into a project in Cangzhou, North China's Hebei Province. ChemChina has agreed to take part in Hebei Cangzhou Dahua Co Ltd by buying a 60% stake in its parent company, Cangzhou Dahua Group, according to a statement released on the Shanghai Stock Exchange on Wednesday.
By the end of 2011, ChemChina will invest a total of Rmb72bn (US$8.93bn/Euro7.53bn) to build Cangzhou Dahua into one of its chemicals production bases.
China Daily, China (online edition)
(Some stories may not appear in all editions of the cited news media.)
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