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Country’s trade deficit figured $812 million in the first four months in the current fiscal, up by 54 per cent over the same period of the previous fiscal, according to Bangladesh Bank data.
   Import payments of goods stood at $3.66 billion whereas export receipts amounted to $2.85 billion in July-October period of 2004-05 fiscal year. The deficit was $526 million during the same period of the previous fiscal year.
   Also deficit in services amounted to $670 million in four months compared with $557 million a year ago.
   Growing import payment outpaced the stronger-than-expected export growth during the July-October period of 2004-05 fiscal year, weakening the current account position of the balance of payments.
   The trend shows that import growth is likely to sustain, Professor Mustafizur Rahman, research director of the Centre for Policy Dialogue, told New Age.
   ‘The BoP needs to be carefully monitored as the import is growing rapidly,’ he said.
   Condition of BoP will depend on the growth of export and remittances inflow in the coming months, he said.
   Mustafiz cautioned that any downslide of these two components would definitely put further pressure on the exchange rate, which at present is relegating against dollar due to higher import bills in recent months.
   On Thursday, the greenback traded at a range between Tk 63 and Tk 65, marking a significant jump from the pre-Eid level of Tk 59.
   Earlier, the Bangladesh Bank projected $3.1 billion trade deficit in the current fiscal, higher than $2.28 billion in fiscal 2003-04, because of a lower projection of export growth and expected surge in imports, along with a ‘marginal’ effect of October’s global oil price hike.
   The higher trade deficit would also reverse the current account position, from last fiscal year’s surplus of $176 million to a deficit of $539 million in the current fiscal, said a bank report released in January.
   The central bank’s latest quarterly economic report said that listed oil price increase and textile quota phase-out among the ‘downside risks’ facing the
   economy.
   Taking into account the central bank’s estimate, the Asian Development Bank said that the import bill would increase to $300-400 million, assuming oil prices of $40-45 per barrel.
   According to the latest provisional statistics of the central bank, export grew 19 per cent while import bill surged over 25 per cent in July-November, 2004, over the same period of the preceding year. The latest Export Promotion Bureau figures show that export growth came down to 15 per cent in the first-half of the fiscal.
   The current account, one of the main components of the balance of payment, posted a $75 million surplus in the first four months of fiscal 2004-05 compared with $263 million in the same period of the previous fiscal.
   However, the Bangladesh Bank said that overall balance posted a larger surplus of $490 million during the period compared to the surplus of $150 million during July-October, 2003, mainly due to larger surplus in financial account.
   Financial account showed a surplus of $586 million in four months in the fiscal against the deficit of $164 million a year back.
   The Asian Development Bank in its latest quarterly economic update said the balance of payments impact will not be substantial if there is a continuous increase in exports and workers remittances as well as expected inflow of foreign assistance.
   The higher surplus in overall balance boosted the foreign exchange reserves, which stood at $3.2 billion at the end of December, 2004, equivalent to three-and-a-half months’ import bills.
   The workers’ remittances grew 12.7 per cent in July-December 2004.

Poverty in Africa, global economic growth and revaluation of China’s currency were the issues expected to dominate a two-day meeting of top G7 finance ministers.
   Britain, as host of the meeting, was expected to seek support from G7 counterparts Canada, France, Germany, Italy, Japan and the United States for an initiative that would double global aid to poor countries to 100 billion dollars (77 billion euros) a year and cancel debt of 80 billion dollars.
   China’s finance minister and central bank governor were meanwhile to have lunch with their G7 counterparts on Saturday, when they were likely to be told again that the yuan—pegged to the dollar—is unfairly undervalued and thereby penalizes exports from Beijing’s trading partners.
   US Treasury Undersecretary for International Affairs John Taylor, told reporters on the sidelines of the meeting that the United States would like to see China “move as quickly as possible towards a flexible exchange rate”.
   Taylor said: “Our discussions with the Chinese have been good and candid.” He was replacing US Treasury Secretary John Snow, absent with a chest cold.
   A leading Chinese newspaper said on Friday that the conditions for fine-tuning the exchange rate of China’s currency were “basically ripe”.
   A move to adjust the exchange rate could not be accomplished all at once but the consensus of market opinion was that a gradual adjustment could be undertaken at any time, the China Securities Journal said in a commentary.
   With China resisting Western pressure to allow the yuan to float, G7 ministers were likely to have time to debate concrete steps to help the developing world notably in Africa, as well as global growth issues.
   Taylor said he would be urging G7 peers to step up their economic growth.
   “The United States would like nothing better than for other countries to grow faster than us,” he said on Friday.
   Meanwhile helping to prod the G7 to take seriously a global drive to stamp out poverty and disease will be Nelson Mandela, the 86-year-old former South African president and hero of the anti-apartheid struggle.
   “Like slavery and apartheid, poverty is not natural,” Mandela told a cheering crowd at London’s Trafalgar Square Thursday.
   Diplomatic sources said that Mandela was to hold a private meeting with finance ministers ahead of the official G7 talks in a bid to win commitments from them.
   Last month African finance ministers urged the G7 to reach agreement on a multi-billion dollar debt-relief package for Africa at the London meeting.
   British Chancellor of the Exchequer, Gordon Brown, appears to have already gotten the message and is expected to use the upcoming discussions to get Washington on board.
   “We will be trying to persuade America that debt relief and extra finance for development is in its interests not just because it is good economics and social policy but good for its security as well,” Brown said in an interview with The Guardian newspaper this week.
   British treasury officials have said France, Italy and Germany had all pledged their support for Brown’s “Marshall Plan” for Africa, with discussions continuing with Japan, Canada, and the United States.
   The United States is widely reported to have reservations on the British project, notably as US President George W Bush has launched his own development initiative for impoverished nations, the Millennium Challenge Account, which ties foreign aid to good governance, anti-graft measures and transparency.
   The plan, unveiled in 2002, calls for US donations in the billions of dollars until a level of five billion dollars a year is reached in 2006. To date, according to the New York Times, US commitments to the scheme are well below initial targets.
   Japan too is coming to the G7 talks with its own proposal for African development aid, including international financial programs worth 1.2 billion dollars.

South Africa’s finance minister accused the EU of keeping African farmers poor Friday and questioned the moral leadership of the US, as he backed a British-led initiative to boost aid for Africa.
   Trevor Manuel made the comments—notably questioning US priorities when Washington is spending billions on Iraq—as he joined a British minister in promoting plans being discussed at a Group of Seven (G7) talks in London.
   In particular he criticized the European Union’s Common Agricultural Policy (CAP), which maintains generous subsidies for farmers that the South African minister said only worsened the ‘huge inequality’ between Europe and Africa.
   The result of the CAP is that ‘farmers in Africa are not only incapable of competing for access to European markets, they can’t compete on price with agricultural produce from Europe,’ he said.
   ‘I’ve yet to meet a political leader in Europe face-to-face who can justify what is taking place. In the face of election and the perceived power of farmers to just create havoc, all resistance melts,’ he said.
   His criticism was backed by British Treasury Secretary Paul Boateng, who was in Brussels to promote London’s plans for debt relief and aid increase for Africa, being pushed at the G7 meeting in London from Friday.
   ‘Our long-term goal is obviously to end the trade-distorting effects of the CAP ... and to provide real improvements in market access,’ he said, singling out the EU’s sugar regime in particular as ‘completely unsustainable.’
   The South African minister meanwhile questioned the morality of US policy.
   ‘How do we live with the debate on how expensive aid is, when the US Congress found it fairly easy to vote 80 bilion dollars a year for a war?’ he said, in reference to the costs of the Iraq conflict and its aftermath.
   ‘How do we live with these kinds of issue? That is a moral imperative that speaks to the challenge of leadership,’ he said.
   Britain is seeking approval from the United States for its grand plan to help alleviate poverty in Africa when G7 finance ministers meet in London on Friday and Saturday.
   But US Treasury Secretary John Snow has pulled out of the meeting due to a chest cold, his office said Thursday.

Asian foreign exchange reserves total around $2.44 trillion and the indications are that they did not change much in January compared with the end of 2004.
   South Korea, Indonesia and Bangladesh have released reserves data for January. Korea’s reserves rose just $0.6 billion during January, after a steep climb of $24.6 billion in the last quarter of 2004.
   Asia ex-Japan’s reserves increased by $173 billion in the last quarter of 2004, which analysts said was the biggest quarterly jump. China’s reserves rose over $95 billion in the final quarter of 2004 to a record $609.9 billion.
   China and Malaysia showed the biggest jump in reserves in per centage terms in the final quarter, which analysts said was evidence of a surge of hot money into these two countries, betting on a revaluation of the yuan and ringgit.
   Meanwhile, the growing interest Asian buyers are showing in bonds issued by European entities has fuelled speculation Asian central banks are diversifying their reserves to limit the impact of the erosion of the dollar, which analysts estimate made up some 70 per cent of reserve assets in Asia until 2003.
   Asian reserves rose by $538 billion in 2004, more than the $473 billion increase in 2003.
   In December 2003, China used $45 billion of foreign exchange reserves—about 10 per cent of its holdings at that time—to bail out two banks. Those funds are not included in this figure.

World oil prices rose on Friday on a technical correction after falling for three days in a row, dealers said.
   New York’s main contract, light sweet crude for delivery in March rose 39 cents to 46.84 dollars a barrel in electronic deals.
   In London, the price of Brent North Sea crude oil for delivery in March gained 45 cents to 44.30 dollars a barrel.
   Dealers noted however that fears of heating oil shortages appeared remote as the northern winter drew to a close, focusing traders on gasoline supplies in the United States which have been rising ahead of the so-called ‘driving season’—when Americans take to their cars for summer holidays.
   Oil prices had fallen on Thursday “for a third session as traders’ fears of tight winter heating fuel supplies eased,” analysts at the Sucden brokerage firm said.
   On Wednesday, the US Department of Energy (DoE) said distillates inventories, which include heating fuel, fell by 2.9 million barrels to 118.6 million barrels in the week ending January 28.
   Stocks of heating oil fell 2.2 million barrels, while gasoline inventories rose by 1.6 million barrels, contrary to expectations for a fall of 400,000 barrels.

South Africa’s De Beers said that diamond sales sparkled during 2004, boosted by Asian demand and a weakening dollar, sending net profits soaring by 25 per cent to 498 million dollars (383 millon euros).
   The upbeat figures came as the group reported a 3.0 per cent increase in sales of rough diamonds for the year ending December 31, from the previous year to 5.695 billion dollars (4.38 billion euros).
   Pre-tax profits for 2004 before amortisation rose 12.0 per cent to 652 million dollars, the group said in a statement.
   Global diamond jewellery sales grew by about six per cent when valued in South Africa’s rand but increased eight per cent when valued in dollars, due to the weakening US currency, De Beers said.
   ‘2004 was another good year for the diamond industry,’ the group said.
   ‘Against the background of accelerating economic growth in the major diamond consuming countries, diamond jewellery sales performed well,’ the statement added.

President George W. Bush will ask Congress next week to boost foreign aid by about 10 per cent, or $2 billion, in fiscal year 2006, with Israel once again the principal recipient of American assistance, a US official said Thursday.
   The request for military and economic assistance worldwide is expected to be about $22 billion, compared with $19.7 billion in the current fiscal year, the official told Reuters.
    ‘We do expect there to be an increase in the request for foreign assistance,’ he said.
   However, Bush’s overall total budget proposal is expected to be the tightest of his presidency, White House budget director Joshua Bolten told Reuters in an interview earlier on Thursday.
   To hold down spending growth, Bush will ask Congress to slash or eliminate more than 150 government programs, including operating subsidies for passenger train operator Amtrak.
   Wars in Iraq and Afghanistan are costing the United States billions of dollars a week.
   But an increase in foreign aid spending could underscore a greater focus on diplomacy that Bush and his new secretary of state, Condoleezza Rice, have promised for his second term.
   Critics have accused Bush of failing to fully deliver on past foreign-aid promises, such as money to fight AIDS or help impoverished countries.

Conditions are ripe for China to widen the yuan’s trading band as the central bank struggles to keep the currency pegged to the dollar without fuelling inflation, a state newspaper said in a commentary today.
   Washington has pressed China to allow the yuan, pegged within a wafer-thin range around 8.3 to the dollar since the 1997/98 Asian financial crisis, to move more freely, saying it’s undervalued and makes Chinese exports unfairly cheap.
   ‘Experts have reached a consensus that the market environment and policy environment for ‘fine-tuning’ the yuan exchange rate are basically mature,” the China Securities Journal said.
   ‘A complete float is unlikely in the near term, but a gradual widening of its floating band to return to the pre-1998 ‘managed float’ that is based on supply and demand may happen any time.’
   Beijing has pledged to move towards a flexible currency regime, but senior officials attending the World Economic Forum last week said China would not rush to tinker with the yuan, citing the need to make further progress in financial reforms.
   ‘As for the timing of the exchange rate reforms, experts believe they will come when people are paying less attention as the monetary authorities worry that any move to boost currency flexibility may be misread as a signal of a revaluation,” it said.
   Chinese officials insists they will not embark on currency reforms as long as speculation over the yuan remains at fever pitch.
   ‘Currently, our country is paying a growing price for maintaining the exchange rate,’ the newspaper said.
   ‘The central bank’s monetary policy is facing more difficulties as foreign exchange reserves climb up rapidly.’
   Those reserves, the world’s second-biggest after Japan, soared more than $200 billion last year to nearly $610 billion, driven by strong foreign investment, a trade surplus and speculative money betting on a possible revaluation.
   Because the yuan is pegged to the dollar, the central bank has to buy foreign currency entering the country by issuing more yuan. To counter the inflationary effects of a bigger money supply, the central bank issues bills to mop up liquidity.
   The central bank drained a net 529 billion yuan ($63.92 billion) from the banking system through open market operations in 2004 — almost double the amount it soaked up in 2003.
   Commercial banks, main buyers of the central bank bills, could face risks if interest rates rise, the newspaper said.

Large advertisers faced with technology that allows TV viewers more control than ever over what they watch are turning to longer ads than the traditional 30-second and 60-second commercials to attract consumers’ attention.
   Longer-format ads started showing up in the last decade in response to cable channels, satellite TV and digital video recorders that give consumers more viewing options and the ability to skip commercials.
   One 2-minute ad for consumer products giant Procter & Gamble Co. features women talking about the benefits they received from P&G’s Olay Regenerist skin-care products. Consumers are urged to call a toll-free number to get a product coupon.
   Advertisers want new ways to provide consumers with more information about why they need a product, said Anne Chambers, chief executive of the Cincinnati-based Red marketing firm which developed the ad and specializes in 2-minute TV commercials that ask viewers to respond directly. A Web site or phone number allows advertisers to track results.
   ‘With the media exploding into tinier pieces and the realization that traditional advertising is not working as well, more marketers are scrambling to find out what does work,’ said Roland Rust, chairman of the marketing department at the University of Maryland. ‘Anybody just doing classic TV in 30-second spots is missing the boat.’
   Procter & Gamble Co., Ford Motor Co., Anheuser-Busch Inc., Home Depot Inc. and Sears and Roebuck Co. have all used the longer-format ads.
   Some of those ads offer consumer testimonials about a product and provide consumers with a phone number or Web site - similar to but more sophisticated than the lower-budget infomercials that have been around since the early days of TV.
   ‘The way we are using TV is changing,’ Procter & Gamble spokeswoman Tami Jones said. ‘We are constantly trying to determine how and when consumers will be most receptive to our messages and what formats will be the most effective for engaging the group we want to reach.’
   No one is predicting the end of shorter, traditional ads.
   ‘Anyone who thinks 30-second TV spots are dead is naive, but those relying only on traditional marketing are way behind,’ said Gary Stibel, a marketing executive who heads the New England Consulting Group in Westport, Conn.
   Ford sponsored an episode of the television show ‘24’ on the Fox cable channel last season, giving consumers 54 minutes without commercials but adding a 6-minute, adventure-themed ad broken up into two segments at the beginning and end of the show.
   ‘What we tried to do was give viewers more of the show uninterrupted while integrating our product with the show’s adventure theme,’ said Rich Stoddart, former marketing communication manager for Ford.
   Josephine Etter, 61, of Cincinnati, says that very few commercials appeal to her.
   ‘I might be more inclined to watch a longer one if it was just at the start and end of the programme and if it told me something about a product that interests me,’ she said.
   Sharon Kelm, a retired teacher in Cincinnati, remembers the Oil of Olay commercial and the Ford commercial. She said she went to the Oil of Olay Web site for a coupon, and thought the Ford commercial was entertaining.
   ‘I did not get out and walk out of the room when those were on,’ she said. ‘I wouldn’t watch even a 60-second commercial if it didn’t attract my interest.’
   Stephen A. Greyser, a Harvard University consumer marketing professor, said advertisers going to longer-format ads are trying to find the best approaches to connect with potential customers.
   ‘This has become particularly important in the past five to 10 years as more advertisers have realized that they no longer can get as full a bang for their buck from buying media by the ton,’ he said.
   Since advertisers do not release financial details or results of their marketing plans, marketing experts say the success of the longer, nontraditional TV ad formats will be judged by whether advertisers stick with them.
   ‘It’s all about extending your company’s brands or icons as far as possible, and using long-form, short-form or some other form of advertising that can reach increasingly diverse consumers,’ said Bob Lachky, vice president of brand management for Anheuser-Busch in St. Louis.

The productivity of American workers, the critical component for rising living standards, increased by 4.1 per cent in 2004, capping a remarkable three-year period in which worker efficiency climbed at the fastest pace in a half century.
   However, the Labor Department reported Thursday that productivity for the final three months of the year was up at an annual rate of just 0.8 per cent, which was the slowest quarterly increase in almost three years.
   The rapid gains in productivity began slowing in the July-September quarter when productivity rose by just 1.8 per cent after increases of 3.7 per cent in the first quarter and 3.9 per cent in the second quarter last year.
   On Wall Street, the Dow Jones industrial average dipped 3.69 points to close at 10,593 Thursday as investors worried that the sharp slowdown in productivity gains over the past six months will fuel inflation fears at the Federal Reserve, prompting policy-makers to begin moving rates up faster. There have been six moderate quarter-point increases since June including the latest rate hike on Wednesday.
   But private analysts said productivity growth, while slowing from the supercharged rates of the past three years, should remain at healthy levels through 2005.
   ‘We should see productivity settle in at rates just above 2 per cent, which will be a solid level consistent with low inflation and low interest rates,’ said Mark Zandi, chief economist at Economy.com.
   Productivity, the amount of output produced for each hour of work, is the key factor in boosting living standards because it allows companies to pay their workers more based on their increased efficiency without having to resort to raising the price of their products, which would increase inflation.
   Productivity rose by 4.4 per cent in both 2002 and 2003. The 4.3 per cent average annual gain for the past three years was the strongest productivity performance in more than a half-century of record keeping. The only three-year period that came close to that performance was a 4.2 per cent average turned in from 1949 through 1951.
   The downside of that increased efficiency is that companies, by getting more output from their existing work force, are able to avoid hiring new workers.
   That is what occurred during the recession year of 2001 and the following two years in which job losses mounted as companies, pressed by increased global competition, strove to get increased production from slimmer work forces.
   In other economic news, the nation’s retailers reported solid sales in January as consumers braved late-month snowstorms in the Midwest and Northeast to head to the shopping malls.
   In another report, the Commerce Department said Thursday that orders to US factories shot up a record 11.1 per cent for all of 2004 despite the fact that order growth slowed to a modest 0.3 per cent rise in December.
   The December increase was the weakest showing since no increase in September. It reflected a 1.1 per cent rise in orders for durable goods, which was revised up from a preliminary estimate of 0.6 per cent, and a 0.6 per cent decline in orders for nondurable goods, items not expected to last at least three years.
   The 11.1 per cent surge in factory orders for the year was the biggest gain on record, besting the previous high of 8.1 per cent set in 1994. It followed four lackluster years as US manufacturers suffered the loss of 2.9 million factory jobs since mid-2000.
   Meanwhile, the Labor Department said that the number of newly laid-off workers filing claims for unemployment benefits totaled a seasonally adjusted 316,000 last week, a decrease of 9,000 from the previous week, pushing new claims to the lowest level since early December. Claims had risen by 7,000 the previous week after having plunged by 49,000 for the week ending Jan. 15.
   The decline of 9,000 jobless claims last week represented a better-than-expected showing. Many analysts had been forecasting not a drop but an increase of about 5,000 in new claims being filed. The four-week moving average of claims dipped to 331,500, the lowest level since early January.
   For all of 2004, employment grew by 2.2 million workers, the first annual gain after three years of job losses as the country struggled to cope with the 2001 recession and a jobless recovery that reflected in large part the ability of US companies to get more output from a smaller work force. The productivity report also showed that output rose by 2.8 per cent in the fourth quarter while the number of hours worked was up by 1.9 per cent.
   The 0.8 per cent increase in productivity for the fourth quarter was the weakest showing since a 0.4 per cent drop in the first three months of 2001. The slowdown in productivity growth meant that unit labor costs climbed by 2.3 per cent in the fourth quarter, the biggest jump since a similar increase in the April-June quarter of 2002.

Microsoft Corp. adopted a new mantra Thursday, promising to work harder to make its software work better with other software systems and hardware, Chairman Bill Gates said in an e-mail to customers.
   Previously, such e-mails signaled the launch of massive new efforts by the world’s largest software company. The last major initiative, to improve the security of the company’s software, was launched by Gates three years ago, and most messages since then have focused on that issue.
   But in Thursday’s lengthy e-mail, sent to major corporate customers and made public by Microsoft, the company said it would boost efforts to make its software work more smoothly, or ‘interoperate’ with other existing technologies.
   ‘Over the years, our industry has tried many approaches to come to grips with the heterogeneity of software,” Gates said, “But the solution that has proven consistently effective — and the one that yields the greatest success for developers today — is a strong commitment to interoperability.”
   Microsoft, based in Redmond, Washington, and other software makers have in the past encouraged information technology departments to adopt complete packages of software technologies as a way to cut costs and streamline their businesses.
   But Gates said tighter IT budgets and efforts to create more compatible software standards were pushing companies to find ways to make existing systems work better.

The survival plans of Singapore-listed China Aviation Oil were under threat on Thursday after one creditor sued the collapsed oil trader and its state-owned parent for fraud and conspiracy and two others rejected a rescue plan.
   Sumitomo Mitsui Banking, part of Japan’s Sumitomo Mitsui Financial Group, filed a lawsuit in Singapore’s High Court against CAO and parent China Aviation Oil Holding Co (CAOHC), as well as Chen Jiulin, CAO’s suspended chief executive.
   It is seeking the $26m it is owed by CAO, plus damages. One person close to CAO, which filed for creditor protection in Nov after losses of $550m on oil derivatives, said the case would be contested.

The US trade deficit with China is ballooning at a ‘clearly unsustainable’ level, a senior US Commerce Department official said as a Congress-mandated commission sought tough steps to contain the problem.
   Officials of the State Department and the Commerce Department came under rapid criticism from members of the US-China Economic and Security Review Commission as well as lawmakers during a hearing over the rising deficit and Beijing’s alleged manipulation of its currency value.
   Commission member George Becker said the trade deficit in 2004 would hit 161 billion dollars and was expanding at an annual rate of up to 29 per cent a year and could ‘double or triple within three to five years.’
   ‘This has reached epidemic proportions. I have never seen this trend go down. What is our strategy, how do you deal with this?’ he asked Henry Levine, the deputy assistant secretary of commerce for Asia-Pacific policy, and Shaun Donnelly, a principal deputy assistant secretary of state.
   Levine conceded that the United States would not be able to support such deficit growth, saying it was ‘clearly unsustainable.’
   But he said a key consolation factor was that the United States was importing fewer goods from other Asian countries which had shifted their production to China due to comparative advantages.
   Many of the goods Asia exports to China are also used to make products that are eventually shipped to the United States.
   Levine claimed the higher share of US imports from China was partly offset by a declining share of imports from other Asian countries. He did not cite figures.
   But Roger Robinson, the commission’s vice-chairman, said he had figures to disprove Levin’s assertions, adding that the US trade deficit with many Asian countries remained high.
   Other commission members June Teufel Dreyer and Michael Wessel said the United States should take firmer measures to reign in the deficit, citing China’s exchange rate advantage, violations of intellectual property rights and weak record of compliance with World Trade Organisation (WTO) obligations.
   ‘Is it our intention to dialogue forever (with China) without seeing any result?’ Dreyer asked the government officials at the hearing.
   Donnelly explained that China had emerged as the fastest growing export market for the United States since it joined the WTO more than three years ago.
   US exports to China had shot up a whopping 80 per cent since December 2001, he said.
   ‘But the trade deficit has worsened,’ Dreyer shot back. ‘So is that progress? I would say: no.’
   The commission, which has been pushing for a tough US approach to China on trade and security, said in a report that China was ‘systematically intervening in the foreign exchange market to keep its currency undervalued.’
   Commission members said the undervalued yuan gave Chinese exports an unfair price edge that had undercut profits and jobs in US textiles, auto parts, furniture, and other US industries.
   A group of Senators on Thursday introduced a bill that seeks to impose an across-the-board tariff of 27.5 per cent on Chinese imports if Beijing refused to reduce its ‘unfairly undervalued currency advantage.’
   The senators said the United States had lost three million jobs over the last five years due to the currency disadvantage.
   ‘This legislation is a tough-love effort to get the Chinese to stop playing games with their currency in order to level the playing field for American companies trying to compete with goods and services coming from China,’ said New York Democrat Senator Charles Schumer, who is spearheading the proposed legislation.
   The Chinese yuan, also known as the renminbi and now pegged at 8.27 to the US dollar, is kept in a narrow band by the Chinese central bank. This range is considered too weak by many financial observers and made worse by recent weakening of the dollar.

Chancellor Gordon Brown has called for the removal of barriers to global trade to promote stability and growth.
   Ahead of the meeting of G7 finance ministers and central bankers in London, he called on them to ‘rise to the global challenge’.
   ‘We have to build a shared economic purpose,’ he said, warning that nations’ prosperity would depend on their ability to face tough decisions.
   The London meeting kicks off the UK’s presidency of the G7 rich nations club.
   ‘Within 20 years half the world’s manufactured exports could come from developing countries and within a decade five million US and European jobs could be outsourced,’ Brown said.
   In addition to the G7 mandate, the UK will also hold the European Union (EU) presidency for six months this year.
   Brown said the UK would use the EU Presidency ‘to push forward a new transatlantic trade and investment partnership to remove regulatory and other barriers between the European Union and the USA’.
   Following the opening speech, Brown and other G7 finance ministers retreated to a closed-door meeting to
   discuss the world economy.
   US Federal Reserve chairman Alan Greenspan, who is to make a keynote speech later on Friday, and other central bank governors, as well as finance ministers from China, India, Brazil, South Africa and Russia are also taking part.
   Ahead of the meeting, Brown said that he would urge the finance ministers to take action to ensure enduring global prosperity, saying ‘We will look at how each continent can contribute to that’.
   The finance ministers are expected to put pressure on China to relax its pegged currency regime, though few expect the country to be swayed.
   The governor of China’s central bank gave away no clues on future exchange rate at a press conference on Friday, which he used to reiterate China’s willingness to work with international bodies like the G7 to ‘keep the global economy more balanced’.
   Separately, Brown is expected to push for extra aid and debt relief for Africa, and again there is slim hope that a firm agreement will be reached during the two-day summit.
   Among the G7 finance ministers, the Europeans tend to agree with Brown’s arguments while Japan and the US are expected to be harder to convince.
   An anti-poverty rally was held in London’s Trafalgar Square on Thursday to put pressure on the finance ministers.
   Among those addressing the crowd was the former South African President Nelson Mandela.
   Parallel discussions - organised by the UK Treasury - on advancing enterprise are also taking place.
   This will involve discussion sessions attended by chief executives from some of the world’s largest companies, including GE chief Jeff Immelt, BP chief Lord Browne and AstraZeneca chief Sir Tom McKillop.
   Brown also ventured beyond the international focus of the day by outlining his vision for Britain’s economic future, saying he wanted it to ‘be not only the most stable environment, but the most attractive location to do business and to create new business’.
   On Friday night, the finance ministers and central bank governors will attend a working dinner. The meeting concludes on Saturday.

The United States should ignore a World Trade Organisation ruling requiring it to repeal a subsidy program for American companies, US lawmakers and other defenders of the measure said Thursday.
   ‘The United States is a sovereign nation. It cannot be forced to comply with yet another wrong-headed WTO decision,’ Senator Robert Byrd told the US-China Economic and Security Review Commission at a hearing on trade issues.
   The United States could be hit with $150 million in trade retaliation by the European Union, Japan and six other trading partners if does not repeal the program, which is known as the Byrd amendment in honour of the West Virginia Democrat who played a key role in its passage.
   The program distributes funds raised by anti-dumping duties on imports to the companies that initially asked the Commerce Department for the anti-dumping protection.
   Washington has doled out more than $1 billion to US ball bearing, steel, seafood, candle and other companies under the Byrd amendment over the past four years.
   The WTO has ruled the program violates international trade rules and urged the United States to repeal it.
   But Byrd and other program defenders argued the WTO overstepped its bounds in declaring the program illegal.
   ‘Nothing in the WTO agreements precluded the enactment of (the Byrd amendment). And no faceless WTO bureaucrat can force us to abandon it,’ he said.
   The Bush administration has proposed repealing the Byrd amendment in its budget recommendations to Congress the last two years and also has said it would work with lawmakers to comply with the WTO ruling against the programme.
   So far, that has had little impact.
   Sen. Mary Landrieu, a Louisiana Democrat, said crayfish companies in her state have missed out on hundreds of millions of dollars in payments because US Customs has not been able to collect anti-dumping duties on imports from China.

The IMF warned that India’s huge fiscal deficits and public debt were impeding the country’s rapid economic growth, which it forecast to be around 6.5 per cent in the year to March.
   The predicted growth rate for the world’s second most populous nation was at the lower end of the government Central Statistical Organisation’s (CSO) latest forecast of 6.5 to 7.0 per cent.
   The Indian economy expanded at 8.5 per cent in the last fiscal year to March 2004, the best in over a decade, thanks to bumper agricultural growth.
   The Washington-based International Monetary Fund (IMF) said in an annual review of the Indian economy Thursday that its large fiscal deficits and public debt ‘remain a key constraint on sustained rapid growth.’
   Without enhancing tax revenues and reducing lower-priority spending, it will be very difficult to adequately address Indias large infrastructure needs, the IMF report said.
   Reforms taken to strengthen state finances had so far not led to a decisive turnaround, the IMF report said, emphasizing ‘more needs to be done.’
   It also expressed ‘serious concerns’ with an Indian proposal to use rising foreign exchange reserves to finance infrastructure spending.
   Using reserves in this manner has the potential to ‘compromise perceptions of central bank independence and increase inflation,’ the IMF said.
   Foreign exchange reserves have risen 25 billion dollars in the past year and stood at 129.4 billion dollars on January 21.
   The Fund also urged India to ease regulations, and liberalize what it termed restrictive labour laws.
   Agricultural reform, for example, was critical to India’s economic growth and poverty reduction, the IMF said.
   Swift reduction of tariffs coupled with lowering of administrative barriers to trade ‘will help unleash a potentially powerful engine of growth,’ it said.
   On India’s financial sector, the IMF said more remains to be done over the medium term to make it strong and globally competitive.
   In this context, the IMF encouraged the authorities to open further the banking system to private and foreign investors, including by raising the foreign direct investment cap for private banks and eliminating the 10 per cent limit on voting rights for foreign investors.
   Indian Prime Minister Manmohan Singh Singh, a former economist and father of economic reforms, promised this month that his government would remove barriers to economic growth.
   ‘Our motto and our goal should be to do as well as a country like China does whether it is in the area of growth of GDP, growth of manufacturers, growth of trade or growth of infrastructure,’ he said.
   China’s gross domestic product (GDP) is forecast at around 8.5 per cent for the current financial year.
   The IMF said India’s 6.5 per cent growth forecast for this year would be on the back of expanding industry and services sectors.
   The growth rate would be around the same in 2005/06 on the back of a recovery in agriculture on normal monsoons, it said.

US Treasury Under Secre-tary John Taylor on Friday dealt a setback to debt relief, saying the United States could not accept the British proposals or a new financing facility.
   ‘Not only does the IFF not work for the United States, we don’t need the IFF, ‘ Taylor said, referring to British finance minister Gordon Brown’s idea for a new International Finance Facility and writing off debt to poor countries.
   Taylor, speaking to a small group of reporters who traveled with him to the Group of Seven finance ministers’ meeting, said the US has its own ‘bold’ proposal for debt relief for poor countries that would also include more aid through grants instead of loans in the future.
   Taylor also said that the US is ‘not convinced of the need’ to sell International Monetary Fund gold to finance debt relief.
   As for China, he said he expects a candid discussion on its foreign exchange rate regime and wants the Asian nation ‘to move as quickly as possible to a flexible exchange rate.’

Finance minister Palaniappan Chidambaram said on Friday that floating exchange rates helped countries cope with economic shocks.
   ‘A flexible exchange rate is one more channel for absorbing both positive and negative shocks,’ he told a conference in London on developing enterprise hosted by British finance minister Gordon Brown.
   India, along with China, Brazil, South Africa and Russia have been invited to take part in the Group of Seven finance ministers meeting also taking place in London on Friday and Saturday at which Beijing is expected to face pressure to abandon its fixed exchange rate.
   ‘Some countries have tried to use fixed exchange rates. I do not wish to make any judgements,’ Chidambaram said.

GlaxoSmithKline Plc, Europe’s biggest drugmaker, called on Friday for Britain to use its presidency of the G7 to ensure the world’s emerging economic powerhouses respect patents and clamp down on counterfeiting.
   ‘Globally, the UK must work to deliver a level playing field by demanding respect for intellectual property rights in the countries that benefit the most from globalisation—India, China, Brazil,’ Chief Executive Jean-Pierre Garnier said.
   Speaking at a conference hosted by British Chancellor of the Exchequer Gordon Brown, Garnier said India and China had both made progress in introducing legislation protecting intellectual property but there was a long way to go.
   China’s patent process still took too long, enforcement was a problem and counterfeiting widespread, he said.
   India has made more progress by introducing a patent regime from the start of this year. However, Garnier said Western drug companies wanted more assurances concerning the exclusivity of data generated in developing new drugs.
   ‘If India brings in data exclusivity provisions and a world class regulatory environment, it has the potential to become a major centre for pharmaceutical R&D,’ he said.
   GSK has already signed a research collaboration deal with leading Indian pharmaceutical group Ranbaxy Laboratories Ltd and other global drugmakers are also stepping up their activities in the country.
   In future, more and more work is likely to be out-sourced to countries such as India and China, where labour costs are low but the skill base is high, Garnier predicted.
   ‘Globalisation is about arbitrage ... To take full advantage you need to de-aggregate the core processes of the enterprise and reconstruct them so that you get access to the pools of low-cost resources as well as high-value skill sets wherever there are,’ he said.

The British government has delayed the release of secret Treasury documents relating to Black Wednesday, the day in September 1992 when the British pound crashed out of Europe's exchange rate mechanism, the Financial Times said.
   The business newspaper, which applied a month ago to obtain the documents under the new Freedom of Information Act, said the Treasury was 'on the verge' of agreeing to release 300 classified papers.
   But their expected release yesterday was abruptly delayed 'after a last-minute intervention by John Major and Norman Lamont,' the Conservatives who were prime minister and chancellor of the exchequer at the time.
   The Financial Times said the papers were expected to reveal 'the full cost' of the Bank of England's failed attempt to prop up the pound in the run-up to September 16, 1992 and its impact on British reserves.

Companies around the world continued to report a brisk expansion of activity as 2005 kicked off, surveys showed, with firms in Europe and Japan staging some catch-up on those in a cooler United States.
   Although hiccups in the US meant global measures of corporate activity eased a bit in January, the surveys suggest global growth still remains at or above average and the narrower gap between the regions makes it more stable.
   Surveys released on Thursday of service sector firms, which now generate the lion’s share of output in most developed economies, showed growth accelerating in the euro zone, Britain and Japan but easing back from highs in the US.
   Apart from Britain, where factories eased off last month, the manufacturing trend reported earlier in the week was broadly similar, albeit at lower absolute levels of growth.
   ‘By historical standards, the US is still pretty strong despite the slippage and we think the worst is now behind us in the euro zone,’ said James Knightley, economist at ING. ‘We’re pretty relaxed about the overall picture.’
   A global all-industry index produced by JPMorgan edged lower to 57.1 in January from 57.2 the previous month.
   The index is derived from national surveys of thousands of companies involved in a wide spectrum of business—from making car parts and mining to providing insurance, healthcare or leisure.
   Countries captured include the US, Germany, Japan, Britain, France, Italy, Spain, Ireland, Russia, Australia and Hong Kong.
   As with other surveys of this nature, activity indexes above 50 show expansion and those below indicate contraction.
   ‘The latest output indexes are consistent with annualized growth of approximately 3.5 per cent in global GDP and 2 per cent in global industrial production,’ said David Hensley, director of global economics at JP Morgan in New York, adding this was close to trend growth.
   Although not directly comparable to these annualized quarterly estimates, the 3.5 per cent number compares with the International Monetary Fund’s full-year 2005 forecast for its ‘Advanced Economies’ grouping of 2.9 per cent.
   Hensley said there was a big gap between the main sectors in favor of the bigger service sector, but there were signs that a mini-slump in manufacturing late last year had bottomed.
   Manufacturing output worldwide rose to 54.0 in January from 53.5 but services output expanded much faster at 59.1 during the month, despite being down from 59.6 in December.
   New orders held broadly steady at 57.0, with a pick-up in services offsetting a decline in manufacturing.
   ‘In our view, solid demand growth, lean inventories and lower oil prices set the stage for a pickup in global industry in the next few months,’ said Hensley.
   Employment growth remains modest, however. The overall global jobs index slipped to 51.2 from 52.6 in December, with a pickup in factory jobs outweighed by a pullback in services.
   The US Institute for Supply Management’s index on Thursday was well below expectations—coming in at 59.2 for January compared with 63.9 in December and below Wall Street’s median estimate for a 61.3 reading.
   A drop in the employment index, particularly one day ahead of the hugely anticipated January US employment report, grabbed most attention. The index dropped to 52.2 from 55.0.
   ‘The moderation was across the board, although it was gratifying that the employment index, though down, stayed above 50,’ said Patrick Fearon, economist at A.G. Edwards and Sons.
   ‘The non-manufacturing side of the economy has been where the bulk of the job creation has been.’
   In Europe, service companies picked up more new business in January and became more optimistic about the future, boosting overall expansion in the sector.
   Service sector growth hit a three-month high in the 12- nation euro area and also improved in Britain, according to monthly Purchasing Managers Index data from NTC Research released on Thursday.
   ‘While industrial business spending on services remains subdued compared to the beginning of last year ... we are seeing a revival of the consumer sector which is taking up the baton of spending on services,’ said NTC Research chief economist Chris Williamson.
   NTC Research said its Eurozone Business Activity Index rose to 53.4 — beating economists’ forecasts of 52.9 — from 52.6 in both December and November. The index remained below highs seen in late 2003, in part due to a poor performance in Italy.

European shares hit new 2-1/2 year highs on Friday, with British Airways up 1 per cent after it raised its revenue outlook and beat forecasts, and with the market focusing on US employment data due later in the day.
   Allied Domecq jumped 6.5 per cent after the Wall Street Journal reported that French spirits group Pernod Ricard is studying a possible takeover of the world’s second-biggest spirits group. Pernod Ricard fell 2 per cent.
   Top Nordic IT services firm TietoEnator jumped 10 per cent as its fourth quarter core earnings beat forecasts and the company said it sees a continuing market recovery.
   By 3:15 a.m. EST, the FTSEurofirst index of pan-European blue chips was 0.24 per cent stronger at 1,074.9 points, a new 2-1/2 year high and up 3 per cent so far this year.
   Investors will take direction from the US non-farm payrolls data due at 8:30 a.m. EST and a strong number is likely to help European markets get to new multi-year highs.
   ‘The consensus is looking for about 200,000 and anything close to that will be taken in quite a good spirit,’ said Michael O’Sullivan, a strategist at State Street Global Advisors.
   ‘Our view is that the markets are looking increasingly optimistic. Institutions are buying things like the financial sector and beginning to come back and buy some of the tech groups as well.’
   Federal Reserve Chairman Alan Greenspan’s speech in London on the US current account later in the day is also a focus.
   Deutsche Bank was an early gainer, up 1.4 per cent after dealers said Morgan Stanley upgraded its rating on the stock and JPMorgan raised its price target.
   Akzo Nobel eased 1 per cent after the Dutch chemicals group said 2005 would be a challenging year for operating margins, weighed by higher cost of raw materials.

Record fuel prices almost halved British Airways’ third-quarter profits, but Europe’s No.2 airline raised its full-year revenue forecast on Friday as passenger numbers and its cargo business both improve.
   BA, which has been forced to cut fares amid tough competition from low-cost rivals, also warned that ticket prices were still expected to decline, but a recovery in first and business class travel was helping offset some of the pain.
   BA shares, trading at their highest level since June last year, rose 1.8 per cent to 275-1/4 pence by 4:08 a.m. EST in a cautious response to the result, which beat most forecasts.
   Analysts said it was a solid performance, but remained concerned about falling ticket prices, and high fuel and employee costs.
   ‘It is quite good on the revenue side and it shows the impact of fuel surcharges and a positive cargo development, however, operating margins down and cost impact of fuel are very strong,’ BNP Paribas analyst Nick Van den Brul said.
   ‘I think the outlook is still pretty modest for BA.’
   BA said pretax profit for the three months to the end of December was 75 million pounds ($141 million), compared to 125 million pounds a year ago.
   The result was higher than market expectations of 59 million pounds, according to a Reuters poll of 10 analysts. Forecasts ranged from 15 million pounds to 77 million pounds.
   The airline, which has outperformed many other full-service carriers by aggressively cutting costs, said it expected revenues for the year end-March to rise 3.0-3.5 per cent, better than earlier guidance of 2-3 per cent.
   Chief Executive Rod Eddington attributed the improvement to higher passenger numbers and a continuing improvement in premium travel through January.
   Fuel costs in the period jumped 47 per cent to 330 million pounds in the period but part of the burden was offset by surcharges on passenger tickets and cargo the airline introduced last year when oil prices hit record highs.
   The airline’s ‘other revenues,’ which Eddington said included surcharges, rose 50 per cent to 226 million pounds.
   BA said it has hedged 80 per cent of its fuel buying at $32.00 for the remaining three months to March 2005, 55 per cent at $36-$37 a barrel for rest of the year end-December 2005 and 24 per cent at $38 a barrel throughout 2006.
   Employee costs in the period increased 3.2 per cent due to higher pension contributions.
   Eddington said BA, which has axed 13,000 jobs and is now relying on more Internet sales and zero travel agent commissions to reduce costs, would remain focused on cost cuts next year.
   ‘It is the never-ending journey. We continue to find ways to reduce our selling costs,’ he told reporters on a conference call.
   Some traders said the higher revenue outlook was still below some analysts’ full-year forecasts. ‘BA’s results are positive but they are being cautious about their outlook. The revenue guidance is not quite what we had hoped,’ one trader said.
   Low-cost rival Ryanair raised expectations earlier this week when it upgraded its outlook, saying it was cashing in on the woes of other no-frills airlines and yields were expected to improve.
   BA remained cautious on yields—or average revenue per passenger—saying European short-haul competition remained a problem but would not give specific forecasts.
   BA weathered an industry downturn following the September 2001 attacks on the United States but faced further frustration in 2004 from fuel costs, strike threats and flight disruptions.

Credit card firms have been told by a committee of MPs to offer consumers clearer information and a fairer deal.
   The Treasury Select Committee’s report into the credit card market said card penalties should be reasonable and interest rate charges made clear.
   The report also called for less small print on loan agreements and for lenders to swap more customer records to stop people racking up huge debts.
   But the report noted that the industry had taken steps to improve matters.
   The committee has been investigating the credit card market for almost two years.
   During that time, in often fiery sessions, the Committee has grilled the chiefs of the UK’s major credit card providers.
   MPs have tackled the bosses over what they see as confusing marketing techniques and irresponsible lending.
   In its second report into the UK credit card market the committee made the following recommendations:
   Companies should share more data to help prevent consumers borrowing massive sums of money spread across several cards
   Clearer information to be given to consumers over penalty charges levied for late payment and exceeding credit limits
   Interest rate calculations to be clearer, with the possible introduction of a single method of calculating interest rates across the industry
   Lenders should stop issuing unsolicited credit card cheques to their customers, as this encourages debt
   Payment protection insurance sold alongside credit cards should be investigated by the Financial Services Authority (FSA).
   John McFall MP, Treasury Select Committee chairman, said that consumers found it ‘virtually impossible’ to compare card deals due to confusing marketing techniques.
   ‘Consumers still deserve a better deal from credit card companies... they have some way to go to make their deals easier to understand and compare,’ McFall said.
   In addition, McFall accused card firms of being secretive about the money they made from card penalties.

Mexican labourers living in the US sent a record $16.6bn (£8.82bn) home last year.
   The Bank of Mexico said that remittances grew 24 per cent last year and now represent the country's second-biggest source of income after oil.
   Better records and greater prosperity of Mexican expatriates in the US are the main reasons behind the increase. About 10 million Mexicans live in the US, where there are 16 million citizens of Mexican origin.
   Remittances now represent more than 2 per cent of the country's GDP, according to the Bank of Mexico's figures. Last year, there were 50.9 million transactions, with an average value of $327 per remittance, the bank said.
   According to Standard & Poor's, which has recently upgraded Mexico's sovereign debt rating, the rise in remittances helps protect the Mexican economy against a potential fall in the international oil prices.
   Competition
   The growth in remittances has sparked fierce competition between banks.
   Bank of America announced last week that it planned to eliminate transfer fees for some customers.
   Remittance charges are estimated to have dropped by between 50 and 60%, reports from the US Treasury and the Inter-American Development Bank have said.
   The Inter-American Development Bank estimates that remittances to Latin America and the Caribbean reached $45bn in 2004.

The Thai stock market is tipped to extend its gains in the week ahead if the weekend election results hand Thai Prime Minister Thaksin Shinawatra a second term, analysts said Friday.
   ‘If the ruling Thai Rak Thai party gains as many as 350 seats in the 500-seat House of Representatives, the index could test the 740- to 750-point mark as this would be in line with market expectations,’ Adipong Puttarawogrom, head of investment strategy at SCB Securities, told AFP.
   Polls and analysts forecast a landslide victory for Thaksin’s Thai Rak Thai, suggesting he may clinch as many as 365 seats out of the 500 in the lower House of Representatives, giving the kingdom unprecedented political stability.
   ‘One very clear sign that foreign investors will stay in the Thai market is that the Thai baht has been very strong, meaning that more capital inflows are coming into the market,’ he said.

Hyundai Motor Co, South Korea’s top carmaker, posted a surprise 21 per cent drop in quarterly profit on Friday, hit by a stronger won and higher steel prices, but its shares jumped on news of a planned buyback.
   Hyundai stock rose nearly 4 per cent after the company, which controls half the home market and aims to be among the world’s top five automakers by 2010, said it would buy back up to 700 billion won ($683 million) worth of its shares. Analysts say the Korean carmaker will struggle in the current 2005 first quarter as weak local sales are unlikely to revive until the second half and export growth slows.
   ‘The results were much worse than expected, but at least the share buyback is lifting sentiment,’ said Park Kum-yung, a fund manager at Mirae Asset Co.
   ‘Hyundai does not have great potential this year, mainly because a stronger won is really going to eat into its exports, hitting profits. High steel prices are also another negative.’
   Strong steel prices and the won’s uptrend pose a serious challenge to Hyundai, which is aiming to increase car sales by 14 per cent this year to 2.39 million units, analysts have said.
   Hyundai, ranked seventh in the US, the world’s biggest car market, said it expected sales to rise 3.6 per cent this year to 28.4 trillion won and operating profit to jump 21 per cent to 2.4 trillion won.
   Investors are pinning their faith on the launch of Hyundai’s flagship NF Sonata sedan in the US market and good growth in Europe and emerging markets such as China and India to drive the company this year.
   Last month, Hyundai overtook Volkswagen, once the undisputed leader in China, the world’s fastest growing car market, selling selling more than 20,000 units.
   October-December net profit fell to 361.4 billion won ($352.6 million) from 459.4 billion, lagging a consensus forecast for a 14 per cent profit rise to 524.1 billion won.
   By 12:45 a.m. EST, shares in Hyundai Motor, Seoul’s seventh biggest stock with a market value of $14 billion, were up 1.2 per cent at 56,800 won. They earlier gained as much as 3.7 per cent on news of the share buyback. The broader market climbed 0.43 per cent.
   Hyundai plans to buy 12 million shares between Feb. 11 and May 6. The stock rose 4.5 per cent in October-December, underperforming a 7.3 per cent climb in Seoul’s main index.
   Smaller losses from affiliate Hyundai Card Co. and the sale of stakes in Hyundai Capital Services Inc.—General Electric Co.’s financing unit bought a 38 per cent stake for 432 billion won in October—brought in one-off gains.
   At an operating level, Hyundai faces a firmer won and higher steel prices that make its vehicles more pricey overseas. The won jumped 11 per cent and steel prices rose 8 per cent in the final 2004 quarter.
   But investors reckon Hyundai can profit from its first US factory, which opens next month. The 300,000 unit-a-year plant will roll out the remodeled NF Sonata.
   Hyundai hopes the Sonata, the top-selling sedan in South Korea, can match what the Camry did for Toyota Motor Corp. The Camry was the Japanese giant’s first car sold in volume globally and helped catapult Toyota to the world’s number two slot.
   Hyundai said on Tuesday that its US sales rose 18.7 per cent in January from a year earlier, to over 26,000 cars and trucks. Last year, Hyundai had a 2.5 per cent share of the US market.
   At home, new model launches by smaller rivals are expected to intensify competition and eat into Hyundai’s sales, analysts say.
   ‘Although a strong won currency is a concern for Hyundai, it’s going to be a much better year as domestic sales are set to recover in the second half,’ said Kim Ki-bong, a fund manager at CJ Investment Trust & Management.
   ‘The key challenge would be whether Hyundai would be able to further increase its market share in the US and boost top-line growth.’

Indian inflation
at 5.37pc
Indian wholesale prices rose 5.37 per cent in the year to Jan. 22, slowing from the previous week’s 5.42 per cent due to lower food and manufactured product prices, the government said on Friday. The inflation rate was at 6.24 per cent during the corresponding week of the previous year. The central bank expects the wholesale inflation rate will decline further in the coming weeks and economists say the gradual easing of price pressures should persuade it to leave interest rates unchanged for the next few months. The Indian prime minister’s economic advisory panel expects inflation in the fiscal year ending March 2005 to be around 5.5 per cent with a benign outlook for the next fiscal.
— Reuters

China, ASEAN
trade over $100
billion in 2004
Trade volume between China and the Association of Southeast Asia Nations surpassed $100 billion last year. This has made ASEAN China’s fifth largest trade partner. South China’s Guangdong Province takes up the largest chunk of China’s trade with ASEAN nations, accounting for thirty per cent of the total.
— Xinhuanet

Sony to release PlayStation portable
Sony Corp said Thursday it will release the PlayStation Portable in North America on March 24 and have 1 million units ready for sale in the first week. The PSP machine, a challenger to Nintendo Co’s long-standing grip on the handheld video gaming market, will be sold as a ‘value pack’ for $250 in the United States and for $300 Canadian dollars. It will include numerous accessories and — for the first million sold — a copy of the ‘Spider-Man 2’ movie on the new Universal Media Disc format that Sony designed for the PSP. Sony said it has already shipped 800,000 PSPs in Japan, where it went on sale on Dec. 12 for about $190. By comparison, Nintendo’s newest product, the Nintendo DS sells for $150. It was among the must-have Christmas gadgets, with more than 2.8 million sold worldwide since its release in late November. The PSP is designed, however, with more multimedia features. It can play digital music, movies and display photos on its 4.3-inch color screen, using Sony’s proprietary 1.8-gigabyte UMD discs or a Memory Stick.
— AP

Peugeot, Mitsubishi plan 4W drive venture
French PSA Peugeot Citroen and Mitsubishi Motors Corp. of Japan said that they had signed on Friday a letter of intent to work in partnership to launch a four-wheel-drive vehicle in 2007. Under the agreement, to be finalised in the next few months, 30,000 of the sports utility vehicle (SUV) models would be produced in Japan but the output would be aimed mainly at the European market. The vehicles would have styling that was specific to each of the PSA brands, Peugeot and Citroen, and would be based on a Mitsubishi vehicle platform which was under development. The vehicles would be targeted mainly at buyers in Europe but the two groups did not rule out that the cars might be supplied to other regions and that the partnership might be extended. The plan would extend the product range of PSA Peugeot Citroen and enable the group to reach a new market segment, mainly in Europe, the companies said in a joint statement. For Mitsubishi, which is in difficulties, the agreement would increase the rate at which its industrial facilities were being used and would increase productivity.
— AFP

Politicians angry over Deutsche Bank’s plan
German politicians expressed outrage on Friday at plans by the country’s biggest—and highest earning—bank, Deutsche Bank, to slash thousands of jobs at a time when unemployment in the eurozone’s biggest economy is at a postwar high. ‘It’s a scandal,’ the deputy chief whip of Chancellor Gerhard Schroeder’s Social Democrat SPD party, Michael Mueller, told the regional daily Berliner Zeitung. ‘It’s outrageous that the earnings expectations are being raised at the cost of jobs.’ Similar tones were heard from the environmentalist Green party, the SPD’s partner in the current ruling coalition. Deutsche Bank’s cost-cuttings plans were ‘highly problemetic’ at a time when unemployment in Germany stands at more than five million, the highest level since the war, said the Green party’s finance expert Christine Scheel. But politicians were not in a position to do anything about it, she regretted. Even the conservative opposition was up in arms.
— AFP

Matsushita Q3 net profit jumps
Japanese consumer electronics giant Matsushita said its December quarter net profit jumped 46.7 per cent on strong digital product sales, allowing it to upgrade its operating profit forecast for the full year while downgrading its net profit estimate on restructuring costs. Net profit rose to 35.57 billion yen (342 million dollars) in the three months to December from 24.25 billion yen a year earlier, Matsushita Electric Industrial—known for its Panasonic brand products—said Friday. Pretax profit was flat at 83.09 billion yen as operating profit rose 24.4 per cent to 88.25 billion yen on sales of 2.30 trillion yen, up 13.1 per cent. ‘Negative factors such as a strong yen, increased raw materials costs and intensified global price competition were more than offset by sales gains, cost reduction efforts and other positive factors,’ the company said in a statement. Citing continued robust sales of its plasma display panel (PDP) televisions, the world’s largest consumer electronics maker raised its year to March 2005 operating profit forecast to 300 billion yen from 280 billion yen.
— AFP