Slowing outlook - Update: the latest trends and controversies - Brief Article

Business Asia, March, 2002

IN WHAT COULD be bad news for other Asian economies, China's economic growth slowed in the fourth quarter, and the Government said it expects a "grim" global economic environment this year. The Chinese economy expanded 6.6 per cent in the last three months of 2001 from a year earlier, slowing from a seven per cent pace in the third quarter, said Zhu Zhixin, head of the National Bureau of Statistics. China is counting on domestic spending to help it meet a seven per cent economic growth target this year as overseas demand wanes. China is expected to be the star performer in Asia this year, and any slowing in its growth could have a roll-on effect in the region. Asia's second-largest economy expanded 7.3 per cent for all of last year.

* HONG KONG

Hong Kong's CyberPort, an office and residential project that will provide highspeed internet links involving the Hong Kong Government and Pacific Century CyberWorks Ltd, said the number of tenant applicants increased to 79 as the scheduled opening in April draws closer. About 10 unidentified tenants from 33 applicants will be housed in the first phase of the HK$15.8 billion ($3.9 billion) project in which an optical-fiber network will link offices to the web.

* INDIA

India's Federal Government, which pays out most of its tax revenue as interest on existing loans, will be forced to borrow more to pay for rising military spending, investors and analysts said. With an increase in the nation's US$13 billion ($25.2 billion) defense budget likely after tension with Pakistan escalated, India may borrow 1.36 trillion rupees ($54.2 billion) during the fiscal year starting 1 April, or 5.4 per cent more than this year.

* INDONESIA

Indonesia and United Nations-administered East Timor agreed to strengthen relations at their first high-level talks since East Timor voted for independence from Indonesia in August 1999. Foreign Minister Hassan Wirajuda led a 30-member Indonesian delegation for talks on the island of Bali with Ministers of East Timor's Second Transitional Government. Wirajuda and Sergio Vieira de Mello, UNTAET's head, agreed to strengthen cooperation on judicial matters and begin a survey in March to demarcate the land border between East Timor and Indonesian-controlled West Timor.

* JAPAN

Japan's Trade Ministry will order exporters to ensure their merchandise doesn't fall into the hands of terrorists seeking to produce weapons of mass-destruction, the Nihon Keizai newspaper said. New ministry guidelines, to come into force on 1 April, require exporters to monitor delivery routes and find out how importers intend to use the merchandise, the report said, without citing sources.

* MALAYSIA

Malaysia's economy shrank for a second quarter in the last three months of 2001, capping a year of near-zero growth, as collapsing exports forced companies such as chipmaker Unisem Bhd to cut production. Gross domestic product shrank 0.5 per cent from a year earlier, less than a revised 1.2 per cent contraction in the third quarter. In 2001, GDP grew 0.4 per cent, the Department of Statistics said.

* PHILIPPINES

The Philippine inflation rate may drop to between 4.5 and 5.5 per cent this year, giving the Central Bank more room to reduce interest rates, the Philippine Daily Inquirer reported, citing Governor Rafael Buenaventura. The Central Bank will recommend scaling down the Government's inflation target of five to six per cent, depending on oil prices and agricultural output.

* SINGAPORE

Singapore's economy emerged from its worst recession in 37 years in the fourth quarter as electronics factories geared up production in response to rising overseas orders. The island's economy grew at an annual pace of 5.6 per cent in the fourth quarter after shrinking 11 per cent in the previous three months, the Ministry of Trade and Industry said. For the full year, the economy shrank two per cent -- less than an earlier estimate of a 2.2 per cent contraction.

* SOUTH KOREA

South Korean consumer prices rose more than expected in February as food and cigarette prices gained and a weaker currency made imports more expensive, raising the possibility of an interest-rate increase later this year. The consumer price index climbed 0.5 per cent from January, seasonally adjusted, the National Statistical Office said.

* TAIWAN

Taiwan export orders and factory production rose in January for the first time in 11 months, signaling that the island is pulling out of its worst-ever recession. Stocks rallied after the Government said overseas orders rose 9.2 per cent from a year earlier, beating expectations of a 2.4 per cent gain. Factory production gained 12 per cent, more than twice as much as economists expected.

* VIETNAM

China's President Jiang Zemin praised improved relations with communist neighbour Vietnam in his second visit to the country since ties were restored in 1991, China's Xinhua news agency said. "We are very pleased to see the relations between the two parties and the two countries have made fresh progress in all aspects," Xinhua quoted a statement from Jiang. China and Vietnam have increased trade and political links since 1991 when ties were restored after they fought a war in 1979 over Vietnam's invasion of Cambodia and clashed on their border during the 1980s.