. Only a further sharp rise in oil prices has the power
to trigger a new Asian crisis. Two other factors to curb growth
are China and US interest rates.
. Merrill Lynch estimates that the Asian-Pacific
region, excluding Japan and using purchasing power parity
weightings, had real growth of 8.4% in Q1. This is likely to be
surpassed in the current 3 months.
. This impressive trend of “above-trend” growth has
been driven by the unusual combination by rapid and simultaneous
expansion in the US, Japan and China, and cannot be maintained,
economists say.
. Asian economic growth, which reached its highest
level in a decade in Q1 of 2004, is at or past its peak and will
decline in the second half, regional economists say.
. HBSC predicts that GNP growth for Asia, excluding
Japan, will peak at 7.6%, this year and decline to 6.1% in 2005.
. East Asian countries, especially Japan & S.
Korea, depend heavily on imported oil. China’s consumption
& imports have been growing sharply.
. Home Depot will expand into China with the
hope of becoming the largest home improvement store chain in
Asia.
. China’s Harbin Brewery backed Anheuser Busch’s
$716 million bid, increasing pressure on rival SAB Miller to
increase its offer.
. “China is standing by its zero tolerance” rule for
assessing tainted soy bean cargoes with fungicide. It has
already rejected cargoes of 3 boats from Brazil.
. Lenovo Group, China’s biggest PC company, reported
a disappointing 7.55% rise in quarterly earnings last week, as
weakness in its new mobile phone business added to already slow
growth in computers.
. Nine provinces, e.g., Fujian, Jiangxi, Hunan,
Guangdong, Guangxi, Hainan, Sichuan, Guizhou and Yunnan, and
Hong Kong & Macau, agreed to enhance cooperation in a bold
attempt to build a regional economic bloc in China. They would
accelerate road & rail connections across the region.
. China is determined to end unproductive
over-investment in industries, such as steel & construction,
and much will depend on the ability to achieve a “soft
landing,” e.g., an economic slowdown rather than a crash.
. Taiwan
aims to buy US weapons at $12.3 billion for the acquisition of 8
diesel-powered submarines, 6 batteries of Patriot III missiles
and for antisubmarine aircraft , said a Govt. spokesman.
. “There won’t be another opportunity… to get
these arms if they fail to fix the deal while Pres. Bush is in
office,” said a Taipei representative of a US military goods
manufacturer.
. In April 2001, Pres. Bush approved weapons sales
worth more than $20 billion, the largest arms package for the
island government.
. The opposition Kuomintang is expected to use its
legislative majority to delay, if not bloc, approval of the
funds.
. Japan’s Parliament has passed bills
providing for the prioritization of debt-ridden public highway
operators by March 2006, an official said
.. Mitsubishi Motors admitted that it failed for years
to fully inform safety regulators about defects in vehicles
manufactured over the last decade.
. Fourteen years in the economic doldrums have
forced the Japanese to adopt humbler tastes. Sushi topped with
gold flake has given way to the humble of gyndon, rice
topped with beef.
. The first shipments of spent nuclear fuel began
arriving at the Rokkasho reprocessing plant in northern Japan
after a break of 19 months, marking another step in the gradual
return to normal of Japan’s nuclear industry.
. North Korea has disallowed the use of mobile phones less than 2
years after their introduction. The clampdown will restore its
grip over society .
. Even pessimistic analysts predict the Asian economy
is likely to contract as a result of the oil squeeze, thought
Credit Suisse Boston predicts that S. Korea & RP
would both record growth below 3% this year if the oil price
averages $40 a barrel.
. Speculation in S. Korean press has linked the N.
Korean ban of cell phones to April’s train explosion in the N.
Korean town of Yang Chon which killed at least 170 people.
. Another theory is that the government is tightening
its control of society to prevent economic reforms destabilizing
the political system.
. S. Korean credit card companies sharply reduced
their loses in Q1 in a signal that the sector is recovering from
last year’s default crisis.
. The riches-to-rags story of the Philippines in
contrast to S. Korea’s march to first-world status,
underscores the importance of the right economic policies &
their implementation, said the Asian Development Bank.
. In 1966 when ADB was established, RP was second only
to Japan as Asia’s richest nation, while S. Korea was among
top borrowers.
. Four decades later, the fortunes are completely
reversed. RP is one of Asia’s poorest countries and S. Korea
is now a key contributor to the bank.
. Philippine government debt is almost 80% of the GNP,
compared with 56% more than 5 years ago.
. The Thai government called off talks with
Muslim insurgents after the ransacking of a Chinese shrine and
the beheading of a Buddhist man.
. The use of US forces in SE Asia to fight
terrorism would fuel Islamic fanaticism in the region and
potentially generate social & political instability, said Malaysia’s
Defense Minister.
. The head (Sidney Jones) of the International
Crisis Group’s operations in SE Asia, has been told to
leave Indonesia,
creating worries that its powerful security forces could once
again be trying to muzzle criticism.
. Ms. Jones is the prominent authority to Islamic
militancy in SE Asia, and has made particular study of Jemaah
Islamiyah, the group behind the car bombings of a tourist
nightclub on Bali & JW Marriott in Jakarta.
. It was her reports on separatist conflicts in Aceh,
that touched a particularly raw nerve. She criticized the
heavy-handed tactics of the military in further alienating the
people and prolonging the conflict rather than bring it to an
end.
. Indonesia’s central bank took limited steps last
week to hold down inflation and prop up its flagging currency (rupiah)
but rejected calls to raise interest rates and risk cooling the
economy a month before presidential elections.
. Vietnam has executed the leader & members of a notorious
gang who were shot. They lost appeals against death sentences
for murder & bribery. They were responsible for a 12-year
crime spree in Ho Chi Minh city.
. India’s
IT technology & business process outsourcing sector grew at
the fastest pace last year since the global IT slowdown began in
2001, said the head of NASSCOM.
. One of the major liabilities is the
country’s infrastructure deficiencies, particularly in power
supply which is “dismal” in many parts of the country.
. A major area in need of immediate attention is the
upgrade of India’s laws and their enforcement on cyber-crime,
data privacy and auditing standards.
. India produces 2 million graduates a year. If it
wants to be competitive in the global economy, it has to bring
English language education to every village & district in
the country.
. India’s new government has lowered the
ceiling on foreign ownership in its proposed sale of the New
Delhi and Mumbai airports, from 74% to 49% and extended the bid
for international bids to late July.
. Foreign aid workers have taken shelter in a hotel in
Quetta, SW Pakistan after authorities warned that Taliban rebels
were planning suicide attacks against their offices, officials
said.
. Nepal’s king reappointed as prime minister Sher
Bahudeer Deuba whom he sacked 18 months ago, provoking a
political crisis.
. Two royalist prime ministers appointed by the king
have since failed to win the support of political parties or
resolve the long
conflict with Maoist insurgents.
. The king has asked for Mr. Deuba to form a government with the support
of as many political parties as possible, restore peace and hold
elections before mid-April next year.
