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Taxpayer-friendly regulations, reduction in discretionary power of tax officials and widening of tax net would be three guiding principles of the budget for the 2007-08 fiscal year, finance and planning adviser Mirza Azizul Islam said.
   ‘I have got a number of principles for the next budget, which, I believe, would give the tax income a major boost and taxpayers a huge sigh,’ Aziz told New Age in an exclusive interview at his finance ministry office Thursday.
   Elaborating the principles, the adviser said the procedures for paying tax and customs duties are needed to be simplified so that taxpayers do not suffer from any sort of harassment by the tax department.
   ‘A taxpayer-friendly environment is impossible without simplification of tax-paying procedures.’
   Discretionary power of tax officials, as often alleged by individual and corporate taxpayers, is a major reason for corruption in the tax administration.
   The adviser also seemed convinced about the need for curtailing the power.
   ‘This is a must to win the taxpayer’s confidence.’
   Existing tax regulations authorize taxmen, particularly deputy commissioner of taxes, to scrap tax exemption granted to any business citing some reasons by virtue of the discretionary powers delegated to them.
   Besides, the tax officials are authorized to compute the assessees’ incomes in a way which they deem right, often resulting in disputes.
   Taxmen currently enjoy the authority to order fresh assessment of any tax file, exposing taxpayers to underhand settlement, businessmen alleged.
   In the case of deducting tax at source, approving tax credit and estimation of profit on sale of fixed assets, tax officials are vested with huge discretionary powers, which force the taxpayers to pay bribes to get the things done, it is widely alleged.
   On the issue of increasing tax income, the finance adviser said the next budget will have some specific measures to widen the tax net and give the survey activities an institutional shape.
   ‘Tax-GDP ratio of the country is the lowest in South Asia, which must be increased,’ Aziz said.
   He said that development programme and revenue expenditure target should be realistic.
   ‘It is unwise to fix an ambitious annual development programme and set an unrealistic target of revenue income.’
   ‘Realistic projections for both income and expenditure are among the principles to be reflected in the next fiscal budget,’ he said.
   Prioritising his expenditure plans, the finance adviser categorically said power generation and distribution will be on the top of development agenda while humane resources development and agriculture would get increased attention.
   ‘The planned poverty reduction strategy would be materialized if these principles and priorities are followed,’ Aziz said.
   The ongoing fight against corruption and financial crimes would also get necessary policy concentrations as well, he informed.

Bangladesh Export Processing Zones Authority has signed deals with 37 firms during the last eight months of the current fiscal 2006-07 which will bring 402 million US dollar in investment in different EPZs.
   This amount is 306 per cent higher than that of the corresponding period of the previous fiscal when the investment volume was 99 million dollar.
   The stocktaking of the investment scenario in the country’s export-processing zones took place at the 25th meeting of the BEPZA Board at its office on Thursday with chief adviser Fakhruddin Ahmed in the chair.
   BEPZA executive chairman Brig Gen Ashraf Abdullah Yusuf informed the meeting that the workers and staff salary and other allowances of different firms in the EPZs have annually increased by Tk 225 crore due to full-fledged compliance with the BEPZA instructions.
   Besides, the BEPZA has started a training programme for the workers with a theme and spirit that ‘EPZs of Bangladesh are the sources of skilled manpower’.
   He said that initially this programme was launched in Dhaka and Chittagong EPZs.
   The BEPZA chief also said that in the last eight months, 252 operating enterprises have increased investment by US$ 104 million, 46 per cent higher compared with the last year. The amount was 71 million dollar in the eight-month period in the fiscal 2005-2006.
   The meeting was attended, among others, by finance advisor AB Mirza Azizul Islam, communications advisor Maj Gen (retd) MA Matin and power advisor Tapan Chowdhury.

Market capitalisation at Dhaka Stock Exchange increased by Tk 1,118 crore in last week due to debut of the shares of Shahjalal Islami Bank and ICB AMCL First Non-resident Bangladeshis Mutual Fund.
   The DSE market capitalisation stood at Tk 39,423 crore at the weekend on Thursday while the figure was Tk 38,305 crore on the closing day of the previous week.
   Stock market analysts
   said the two new issues spurred the market capitalisation at the bourse on their simultaneous opening of trading at the secondary market on last Wednesday.
   Earlier, Shahjalal Islami Bank raised Tk 93.58 crore and ICB AMCL First NRB Mutual Fund Tk 10 crore issuing initial public offers.
   Dhaka stocks, however,
   finished last week bearish amidst dull trading during the week.
   The general index of the Dhaka Stock Exchange lost 14.78 points or 0.83 per cent during the period to close at 1760.88 on Thursday, while the blue chips index, DSE20, shed 19.45 points or 1.38 per cent to close at 1393.99.
   Analysts said the profit taking sell-off dominated the week after a steady rise in the previous week.
   Of the total 272 listed issues traded on the DSE floor, 150 declined, 62 advanced and 14 remained unchanged. Forty-six issues recorded no transaction during the period.
   DSE daily average turnover, however, increased by 12.52 per cent from the previous week’s figure on the back of the huge transactions on the shares of Shahjalal Islami Bank and ICB AMCL First Non-resident Bangladeshis Mutual Fund debut in the week.
   The turnover averaged Tk 71.20 crore in the last week while the figure was Tk 63.28 crore in the previous week.
   Shahjalal Islami Bank topped the turnover leaders with total sales of Tk 40.55 crore which was 14.24 per cent of the total turnover of the bourse in last week.
   Total turnover in the last week which had four trading day was Tk 284.78 crore.
   Other turnover leaders of the week were Dhaka Electric Supply Company, Power Grid Company Bangladesh, Standard Bank, ICB AMCL First NRB Mutual Fund, Southeast Bank, UCBL, Grameen Mutual Fund One, BRAC Bank and Rupali Bank.
   Phoenix Leather topped the gainers’ list with 13.65 per cent rise in its share price during the week while Uttara Bank was the worst loser witnessing 38.30 per cent fall in its share price due to its price adjustment on its ex-dividend trade.

The social welfare ministry could spend 44 per cent of the development budget in eight months of the fiscal year, giving a little proof that partial budget-making autonomy helped it improve project implementation capacity.
   Out of a total development outlay of Tk 140 crore for the ministry, an amount of Tk 75 crore or more than 50 per cent has been kept as block allocation for implementing 18 new projects — nine of which are lined up in the 2006-07 annual development programme as unapproved projects.
   Like some other ministries that entered the medium-term budgetary framework, the social welfare ministry is yet to overcome its weakness in streamlining the expenditure outlay at the beginning of the fiscal, the finance ministry said. ‘Block allocation at each ministry exposes its weakness and inefficiency in budget-making and spending,’ added an official there.
   According to a progress report on the social welfare ministry projects, the rate of implementation in terms of spending of money on seven ongoing projects under the revenue budget during the eight-month period was even worse: only 37 per cent or Tk 12.75 crore out of an allocation of Tk 34.33 crore.
   In all, the ministry has a total of 33 projects for the current fiscal year with an involvement of Tk 140 crore. The government earmarked Tk 30.39 crore for meeting the cost of six current projects under the annual development programme.
   The ministry, in the progress report, however, claimed that its performance in project implementation this fiscal year marked an improvement by 4.4 per cent compared to that of the previous year.
   The social welfare ministry is one of the 10 ministries which were brought under the medium-term budgetary framework and given certain autonomy in formulating their own budgets.
   In one case, the report showed, the chief accountant of the ministry had not come up with a necessary proposal for revising the allocation for a particular project causing delay in implementation.

China is likely to see a fifth consecutive year of double-digit growth in 2007, the central bank said in remarks published Friday, just weeks after the government called for a slowdown in the economy.
   The world’s fourth-largest economy will probably expand by 10 per cent this year, compared with 10.7 per cent in 2006, the central bank’s research department said in a report carried by the China Securities Journal.
   ‘The trade surplus is likely to maintain relatively fast growth in the first half but the rising trend should ease in the second half,’ the report said.
   In a speech to lawmakers earlier this month, Premier Wen Jiabao targeted eight per cent growth in 2007.
   Analysts almost immediately characterised the target as unrealistic, saying it was mainly meant as a signal to lower-level officials to refrain from going for growth at any cost.
   The central bank research report suggested no clear trend in economic growth throughout 2007, with slightly faster expansion both early and late in the year.
   The economy is expected to expand 10.2 per cent in the first quarter, 9.85 per cent in the second, 9.8 per cent in the third and 10.05 per cent in the fourth, it said.
   The report forecast consumer price inflation to be around 2.3 per cent in 2007, higher than the 1.5 per cent for full-year 2006 but below the three-per cent upper limit set by the central government.
   Fixed-asset investment growth, an important driver for the economy, is forecast to slow to about 22 per cent this year from 24 per cent in 2006, according to the report.
   The research bureau said retail sales, a main gauge of consumer spending and sentiment, is expected to remain brisk in 2007, with the growth rate higher than the 13.7 per cent expansion in 2006.

Asia’s second-largest motor show opened in Bangkok on Friday amid plummeting domestic sales, dragged down by consumer worries over Thailand’s uncertain post-coup politics.
   The Bangkok International Motor Show, the biggest in Asia after Japan, will display 440 vehicles, with 1.6 million people expected to attend the 10-day event, said the show’s organisers, Grand Prix International Co.
   ‘Some 13,000 units were sold during last year’s motor show. We expect this year’s sales to be no fewer than that,’ Jaturont Komolmis, senior vice president of Grand Prix, told AFP.
   Toyota’s Lexus RX 400H, the world’s first luxury hybrid vehicle, and Mercedes-Benz’s 150-million-baht (4.28-million-dollar) racing car CLK-GTR were among the highlights of the show.
   While the Lexus hybrid is sold here at 6.25 million baht (178,500 dollars), the CLK-GTR, the priciest vehicle at the show, is purely for display, the organisers said.
   Automakers hope the event will spur domestic sales, with year-on-year sales figures falling sharply for five straight months after the military overthrew the elected government of Thaksin Shinawatra in a coup in September 2006.
   In the first two months of the year, sales were down 20 per cent compared with the same period last year.
   With Thailand’s consumer confidence at a five-year low and new political uncertainties arising due to swelling anti-coup sentiment, the auto industry is anything but upbeat about car demand.
   ‘Political uncertainty is a major concern for auto sales. If March sales are at the same level of last year, we should be quite satisfied,’ Morikazu Chokki, president of Tri Petch Isuzu Sales Co. told AFP.
   ‘We want political uncertainty to be short-term and hope that auto demand will recover in the later half of the year,’ said Chokki from the Japanese truck maker.
   Even Toyota, the biggest automaker in the Thai market, was modest in its estimates about the motor show, saying its targeted sales would be the same as last year at 4,900 units. Thailand has no domestic automakers but is a major production and export base for Japan’s auto giants such as Toyota, Nissan and Honda, as well as US makers General Motors and Ford Motor Co.

Forecasting a gloomy future for the global newspaper industry, eminent journalist and Prasar Bharati chairman MV Kamat on Thursday said newspapers might lose their relevance in the next one decade and even become extinct due to the explosion of information technology.
   Already the circulation of newspapers, including the popular New York Times and The Washington Post, had gone down deeply while the London Times in the UK had now become a tabloid, he said at the inauguration of the three-day ‘Print Congress-2007’, an International Conference on ‘Print and Media Technology’, in Manipal.
   He cautioned that even books would also become irrelevant as the number of book lovers was drastically coming down and a day would come where everything would be heard and nothing would be seen. ‘The IT may chanage your lifestyle in future so that you may not require paper, just information and not knowledge,’ he added.
   The conference is being organised by the Department of Printing and Media Engineering of Manipal Institute of Technology.
   Gunther Keppler, the general manager of Heidelberg India, who inaugurated the congress while contradicting the views of Kamat, said the argument that IT would lead to be paperless offices had been found to be false. ‘We could find today more paper in the offices than before.’
   He said that the application of know how of printing education would be decisive in the printing production investment projects. Training and education was most important in print media segment, he added.

TV Sundram Iyengar and Sons Ltd, India’s largest automotive dealership and distribution company, and Rian Motors Ltd, a Rangs Group company of Bangladesh, at a function in the city on Friday announced formation of a joint venture company ‘TVS Auto Bangladesh Ltd’ to assemble and market TVS range of motorcycles in Bangladesh.
   An agreement of the joint venture in which both TVS and Sons, and Rian Motors having equal percentage of shares was signed by R Dinesh, executive director of TVS and Sons Ltd, and Akthar Hussain, vice chairman of Rian Motors Ltd, said a release.
   TVS has plans to expand its operations in Bangladesh through distribution of spare parts, cars, commercial vehicles, equipments, etc.
   In addition to Victor range of motor cycles, TVS Auto Bangladesh will distribute StaR range of 100CC motorcycles, electric start version of GLX and few other new products including Scooty, a two wheeler exclusively for the women.
   R Dinesh said, ‘Increasing TVS and Sons footprint internationally is in continuation to the tremendous success achieved in Sri Lanka, UK and Europe through strategic business alliances like the one we have formed today. We believe that this joint venture will make meaningful impact in the rapidly growing competitive automotive market of Bangladesh.’
   Akthar Hussain, also the chairman of Rangs Electronics, said ‘The collaboration with TVS and Sons will offer us an opportunity to expand our business in Bangladesh. The values and deliverable standards practiced by TVS and Sons will create a new level of experience to our customer during the process of sales and service.’

Fear and confusion reigned in Russia’s markets ahead of a government ban against tens of thousands of foreign stallholders that comes into force on Sunday.
    ‘I don’t know what to do!’ said Lida, a tearful Ukrainian spice vendor at the Vyatsky market in central Moscow. Traders from Azerbaijan, Moldova, Tajikistan and other ex-Soviet republics across Moscow echoed her despair.
   President Vladimir Putin last year called for measures to aid Russian producers. The government promptly decreed that all foreigners be banned from working in markets from April 2007 and that Russian nationals take their place.
   In Moscow alone, city authorities estimate there are currently between 18,000 and 20,000 foreign nationals working in city markets. All will be banished from working in the markets starting from Sunday.
   ‘From April 1, there won’t be a single foreign stallholder in any market in Moscow,’ said Larisa Korzhneva, deputy head of a city administration department dealing with retail markets.
   In January, officials began reducing the proportion of foreigners working in markets to a 40 per cent share. The raids wreaked havoc, shutting down markets in Siberia and far eastern Russia, and emptying stalls across the country.
   Foreigners, many from former Soviet republics who do not need visas to enter Russia, have long formed the bulk of the workforce in Russian markets, flocking to large cities like Moscow and Saint Petersburg.
   Millions of foreign migrants come to Russia every year looking for work.
   While the colour of their skin may not always be tolerated in a country where racist sentiment is widespread, there is a grudging acceptance of foreign vendors working here.
   Many locals say that Russians simply would not work in the markets for the salaries and conditions that foreigners, often coming from countries that are far poorer than Russia, agree to.
   ‘No Muscovite would work 13 hours a day, every day without any holiday for 500 rubles (19 dollars, 14 euros) per day,’ said Lyudmila, a Ukrainian who has been selling meat at Butyrsky market for the past four years.
   At the stall next to hers, Irina, another Ukrainian, points to a sign a few metres away reading ‘We Are Looking For A Vendor With A Russian Passport’ in big letters. ‘That sign’s been there for three years!’ Irina said.
   Some traders are hoping that an increase in checks on Sunday will not be followed up by a full ban after the authorities see the fallout that closure of local markets could bring.
   ‘I think there will be a grand raid in all the markets on Sunday but then afterwards I think they’ll let us work. We haven’t done anyone any harm,’ said Nasiba, a literature graduate from Tajikistan selling fish at Vyatsky market.
   But migration officials are vowing they will make no allowances.
   ‘The measure will be applied fully. We have already started raids at the markets. All the foreign vendors, and especially the market directors, have been warned,’ said a spokeswoman for Russia’s migration service.
   ‘This is to defend Russian traders, who have long been chased out of markets or relegated to second class level by the foreigners,’ said the spokeswoman, who declined to give her name.
   Anti-racism campaigners in Russia are accusing the government of taking the xenophobic policies advocated by far-right groups into mainstream politics in order to boost ratings in an election year.
   ‘These new rules are populist,’ said Galina Kozhevnikova, an analyst from the Sova think tank in Moscow.
   ‘They’re presented as a defence of Russian traders against illegal competition but actually they’re dividing ethnic Russian citizens from the others.’
   Elena Burtina from Civil Assistance, a non-governmental group that assists immigrants, said: ‘This measure is tragic. Markets are the only sector where people without status can work and earn money.’
   Another fear is that the ban will simply boost rampant corruption in the Russian bureaucracy as foreign market vendors desperately seek to dodge the new rules by acquiring Russian nationality.
   ‘Before, illegal vendors paid bribes to police officers in the markets, now the problem is just going to move straight to the passport offices,’ Kozhevnikova said.
   Lida worked as an accountant in Ukraine for 20 years. Then she sold up and set up a spice stall in Moscow in 1999. The money she earns paid for the studies of her daughter, an economist, and her son, a computer science student.
   ‘In a year, when he’ll have his diploma, I’ll stop working. Do you think police officers are going to stop me working on Sunday? Look, I have the right to work here,’ she said, showing her Russian work permit.

Three firms were awarded a share Thursday in a massive contract to revamp US government’s telecom networks worth at least 20 billion dollars over the next 10 years.
   ATT Corp., Verizon and Qwest were named contractors to upgrade the US government’s worldwide voice, data, wireless and satellite communications for 135 federal agencies across 191 countries, the General Services Administration said.
   The contract called Networx Universal ‘will transform the current federal telecommunications system to a secure, worldwide’ Internet-based network, the GSA, the procurement and property management agency for the government, said in a statement.
   Analysts said that over time, the contract has a potential value of up to 48 billion dollars, as the companies vie for specific deals with individual government agencies.
   ‘This big deal is actually many smaller deals over 10 years worth between 20 billion and 48 billion dollars, which the carriers will be competing among each other for,’ said telecom analyst Jeff Kagan.
   ‘This deal probably means the most for Qwest, looking at the size and scope of the providers. However, it is a big win for all three. This is the kind of deal carriers lose sleep over trying to win. It is big and it is profitable.’
   Verizon said the new system ‘will help the federal government usher in a new era of advanced communications services—providing cutting-edge voice, data, wireless and Internet services to government agencies around the world.’
   Qwest chairman and chief executive Richard Notebaert said the contract was ‘a big win for Qwest that complements our progress over the last five years and is a testament to Qwest’s status as a leading, national, tier-one communications provider.’

Southeast Asia’s biggest lender, DBS Group Holdings, wants to be a major player in the 300-billion US dollar Islamic financial market and has engaged four specialists to help the bank achieve the goal, the Singapore-based company said Friday.
   Chief executive Jackson Tai described the four Islamic scholars as among the world’s ‘most prominent’ and said they would help the bank better understand Sharia Law.
   Islamic finance fuses principles of sharia or Islamic law and modern banking. Funds are banned from investing in companies associated with tobacco, alcohol or gambling considered taboo by Muslims.
   The system also bans the earning of interest.
   ‘With the guidance of the four scholars, DBS hopes to be a leading player in the 300 billion US (dollar) Islamic financial market,’ Tai said at an Islamic banking dialogue organised by the bank.
   ‘Today, we announced the association with four prominent scholars who understand the intricacies, the importance of sharia-compliant financing.
   ‘We’ll look to them for advice on how we should approach a stronger participation in the Islamic financing world for DBS.’
   The four scholars include Sheikh Nizam Mohammad Saleh Yaqouby who is a member of the Sharia Supervisory Board for a number of Islamic banks and institutions.
   DBS began its serious foray into Islamic finance last year when the bank was granted a licence to operate at the Dubai International Financial Centre. It has opened a flagship branch there offering wholesale banking products and services.
   The Dubai operations have performed strongly and the bank is open to expanding its presence in the Gulf region, Tai said.
   ‘It’s only one year but we are doing very well. We are very pleased so far in our success and progress in Dubai,’ the DBS chief said.
   ‘We will look to see if it makes sense to do other locations over time,’ he said.
   DBS has a significant presence in Asia with a subsidiary in Hong Kong as well as operations in China, India, Indonesia, Malaysia, Thailand and the Philippines.
   The bank, however, cannot ignore the growing potential of the Islamic financial market if it aspires to be a leading Asian financial services provider, said Tai.
   ‘In today’s day and age, if you are going to be a leader in the Asia capital markets, if we are going to be an Asian bank specialist, we have to have a presence in the GCC, the Gulf Cooperation Council,’ he said.
   ‘All that means we need to understand sharia financing principles so that we increase the funding opportunities as well as the range of products and services for our customers whether they be investors or issuers,’ he said.
   The GCC comprises Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates. The Monetary Authority of Singapore, the city-state’s de facto central bank, said last year the Islamic finance market of about 300 billion dollars worldwide was growing at around 15 per cent a year.
   Islamic financial services range from basic bank deposits to investment accounts, equity funds, bonds and Islamic hedge funds and swap equivalents.
   Singapore has in recent years stepped up efforts to grow its Islamic financial services with the expansion of banking products compliant with sharia law.
   The city-state’s neighbours Malaysia and Brunei are also chasing Islamic funds, and Malaysia this week hosted the Global Islamic Finance Forum which attracted hundreds of industry players from around the Islamic world.

The German economy, the biggest in the 13-country eurozone, is hoping to cut its public deficit to 1.2 per cent of gross domestic product this year, the finance ministry said Friday.
   The figure had already been leaked in the press earlier this week, but the ministry announced that it would officially inform the European Commission of this year’s deficit target later on Friday.
   Under the terms of the European Stability and Growth Pact, eurozone countries are not allowed to run up public deficits in excess of 3.0 per cent of GDP.
   Germany, the pact’s main architect, had been in breach of that rule every year since 2002.
   But a booming economy and bountiful tax revenues enabled Berlin to report a deficit ratio of 1.7 per cent last year.
   Overall public debt was also expected to fall again this year to 66.7 per cent of GDP from 67.9 per cent in 2006, the ministry said.
   The stability pact stipulates that eurozone members’ debt ratio must not exceed 60 per cent.
   A country’s public deficit is the difference between state revenues and public spending. The public debt is the cumulation of past annual spending deficits.

HSBC, the British-based banking giant, will set up a retail operation in Japan early next year and aims to open as many as 50 branches within four years, a newspaper reported on Friday.
   HSBC will seek to steal wealthy customers away from the Japanese banks and vie with US financial giant Citigroup which is expanding its Citibank network in the world’s second-largest economy, the London-based Financial Times said.
   The investment will cost ‘hundreds of millions’ of dollars, with stores focused mainly in the Tokyo area initially, the FT reported, citing unnamed people familiar with the situation.
   HSBC spokeswoman Vinh Tran in Hong Kong said that HSBC was considering entering the Japanese retail market but that no decision had been made yet.
   ‘There are discussions underway but no details have yet been firmed up. We will focus on the mass-affluent sector and we do have plans to expand the distribution network,’ she told AFP.
   HSBC already has a presence in Japan but it mainly focuses on wholesale banking and securities operations.

The Bush administration, facing heavy pressure to deal with soaring trade deficits, is considering imposing economic sanctions on China in a dispute over government subsidies.
   If the administration decides to take action, it would open up a new area in which American companies being battered by a flood of Chinese imports could seek protection and would reverse 20 years of US trade precedent.
   Commerce Secretary Carlos Gutierrez was to announce the government’s decision on Friday in a case brought by NewPage Corp., which contends that imports of high-gloss paper from China represent unfair competition to US-made paper.
   The government could impose penalty tariffs on Chinese paper imports on a preliminary basis subject to a final determination by Commerce later this year.
   The government of China suffered an initial defeat on Thursday when a US court ruled against its effort to stop Gutierrez from going forward with the case.
   For two decades, the US government has held that American companies did not have a right to challenge government subsidies granted to their foreign competitors if those companies were in ‘nonmarket economies’ such as China.
   However, last year, the administration let it be known that it was ready to consider reversing that policy.
   President Bush is facing heavy political pressure from Congress, now in the hands of Democrats, to deal with soaring US trade deficits, including a record $232.5 billion imbalance with China.
   China asked the US Court of International Trade, a federal court which handles trade matters, to rule that the administration did not have the right to reverse established trade policy without legislation or a full regulatory hearing.
   The court ruled Thursday that the government does have the authority to consider penalty tariffs against China in disputes involving government subsidies.
   Judge Gregory W. Carman, who heard the case for the trade court, rejected China’s request to grant a temporary injunction to stop the US government from proceeding.
   This trade dispute is being followed closely by a number of other American industries — from steel to furniture — that have been battered in recent years by a flood of imports from China.
   US companies have always had the right to file dumping cases against China, which can result in penalty duties if Chinese companies are found to be selling products in the United States below cost.
   But the ability to file subsidy cases could significantly expand the level of penalties that Chinese imports could face, giving American producers more protection.
   The fact that the Bush administration made it known last year that it was now willing to consider cases against China involving government subsidies was seen as part of a new get-tough approach in the face of soaring US trade deficits.
   Treasury Secretary Henry Paulson is leading an effort to pressure China to allow its currency to rise in value against the dollar. American manufacturers contend that China is devaluing its currency by as much as 40 per cent to give the country unfair trade advantages.
   China would have the right to appeal the decision of the trade court, which is based in New York, to the US Court of Appeals in Washington. The Chinese Embassy and attorneys representing China did not immediately respond to telephone calls seeking comment.
   In his decision, Carman said the court did not have jurisdiction in the case because China could seek redress from the courts once a Commerce decision had become final.
   Gilbert Kaplan, an attorney with the Washington law firm of King & Spalding, which is representing New Page, called the ruling a ‘significant win’ because it allows Commerce to go forward with the subsidies case.

German engineering giant Siemens, currently engulfed by a swamp of corruption allegations, said Thursday that two current and former managers had been arrested as part of a massive investigation into suspected slush funds at its telecoms unit.
   Prosecutors in Munich said the two men had been detained at the beginning of the week but had since been released.
   A Siemens spokesman said that one of the suspects was still employed by the company and had therefore been suspended. The other had left the group last year, the spokesman said.
   Siemens again insisted it would cooperate with prosecutors and would make available all necessary documentation.
   Allegations of widespread corruption and embezzlement at Siemens have been snowballing for months.
   This week, a member of the group’s management board, Johannes Feldmayer, was arrested for his alleged involvement in a possible scheme to build up a small trade union as a counterweight to the mighty IG Metall union.
   In that matter, investigators had also turned their attention to Siemens’ former finance chief and a former member of its supervisory board, Karl-Hermann Baumann. Baumann, Feldmayer and a number of other top managers are suspected of being involved in alleged payments to the head of the AUB labour organisation, Wilhelm Schelsky.
   Schelsky, who was arrested last month, allegedly received 15-20 million euros (20-26 million dollars) in bogus consultancy fees.
   The IG Metall union has said it is now considering suing Siemens in the matter.
   But the arrests on Thursday were part of a high-profile slush-fund scandal, where prosecutors allege that company managers siphoned off hundreds of millions of euros in company money to obtain foreign contracts.
   In November, German prosecutors launched a massive probe, raiding the offices and homes of a number of Siemens employees amid suspicions of embezzlement, bribery and tax evasion.

Dell Inc., the world’s second-largest personal computer maker, said on Thursday an internal financial audit found evidence of misconduct, accounting errors and deficiencies in its financial controls.
   Dell, already facing federal and regulatory probes of its accounts and reeling from several disappointing quarters, said its audit committee was working with management and independent auditors to determine whether to restate past results.
   Dell shares fell more than 2 per cent in after-hours trade. The accounting review meant Dell would not file its annual report with securities regulators by the April 3 due date, or by an extension date of April 18, the company added.
   ‘We still don’t know the extent of the misconduct,’ said Sunil Reddy, senior portfolio manager at Fifth Third Asset Management, which oversees about $21 billion in assets, including Dell shares.
   ‘This news creates uncertainty, but more important are the operational metrics, which need to change in the right direction,’ Reddy said. ‘That’s going to take some time.’ A spokesman said the company would not comment beyond the statement. Dell will see whether the control deficiencies ‘constitute a material weakness’ in its control over financial reporting.
   Thomas Luce III, chairman of the Dell audit committee, said in the statement Dell would take ‘appropriate remedial measures’ after a ‘thorough and comprehensive review.’
   Dell disclosed its accounting review a year after it was begun in August 2005. Later in 2006, the company said the US Securities and Exchange Commission and federal prosecutors were investigating its past accounting, and it canceled its annual meeting with analysts in September because of the probes.
   Dell still has not filed financial statements for the second and third quarters of fiscal 2007, pending the completion of the accounting reviews.
   Founder Michael Dell in January retook the helm from Kevin Rollins, who left after the investigations were disclosed and a series of lower-than-forecast results. Also in 2006, Dell lost the No. 1 PC market share spot to Hewlett-Packard Co.

US oil giant Exxon Mobil, Saudi Aramco and Sinopec announced here Friday two joint ventures worth about five billion dollars to operate 750 service stations and a petrochemical refinery in China.
   The announcement of the project, Exxon Mobil’s largest single investment in China, marked the culmination of 12 years of preparations, according to the American company.
   ‘It’s our biggest project so far in China,’ Sarah Du, a Beijing-based Exxon Mobil spokeswoman, told AFP.
   ‘Developing this type of joint venture is a very complicated process and Fujian is the most complex so far in China due to the nature of its integrated business,’ she said.
   In a joint statement, the companies called the two joint ventures ‘the first fully integrated refining, petrochemicals and fuels marketing project with foreign participation in China.’
   The refining joint venture, which will start operations in early 2009, will expand one that already existed in the southeastern province of Fujian between Sinopec and the Fujian government.
   It will lead to a tripling of the production of refined Saudi Arabian crude to 240,000 barrels per day, the statement said.
   A joint venture co-owned by Sinopec, China’s top refiner, has a 50 per cent stake in the venture, while Exxon Mobil and Saudi Aramco each have 25 per cent.
   The second joint venture will operate some 750 service stations and a network of terminals across Fujian province, according to the statement.

A growing number of Chinese firms are now among the leading global corporations, said a Forbes magazine report Thursday that places US banking giant Citigroup in the top spot.
   Citigroup heads the Forbes list of 2,000 global public companies, ranked on a formula of sales, profits, assets and stock-market value.
   The list now has 80 companies based in Hong Kong or China, including 16 additions from last year, while the United States has 34 fewer companies compared with last year’s rankings.
   US-based Bank of America was number-two in the global rankings, following by British banking group HSBC, US-based conglomerate General Electric, US banking firm JP Morgan Chase and insurance giant American International Group.
   ExxonMobil, the US oil giant, was ranked seventh, followed by Royal Dutch Shell, Swiss-based UBS and Dutch-based bank ING.
   The rankings differ from other lists based on stock market value, sales or profits.
   US retailer Wal-Mart Stores had the highest sales — 348 billion dollars—but was ranked 17th on the Forbes list. Seventh-ranked ExxonMobil had the biggest profit at 39.5 billion dollars and the highest stock market value at 410 billion.
   Even with fewer US names on this year’s list, the remaining US companies had a combined market capitalization of 13.9 trillion dollars, Forbes said.
   Forbes said the total revenues of the companies headquartered in Switzerland exceeded the country’s gross domestic product.

US economic momentum is likely to decline this year to a pace slower than the 2.9 per cent forecast in September by the International Monetary Fund, the head of the IMF said Thursday.
   ‘We’ll probably see that number of September ... reduced, but not in a significant way,’ Rodrigo Rato said here, where he met with Dutch government officials.
   He said problems plaguing the US residential housing market, along with concerns about mortgage foreclosures, could have an impact on US consumer spending.
   But he added that the negative effect would be offset by strong household earnings and a healthy labor market.
   The US economy, he predicted, should therefore experience a ‘soft landing’ this year and ‘a certain recovery’ in 2008.
   In Washington Thursday the Commerce Department said the economy expanded at a 2.5 per cent annualized pace in the fourth quarter of 2006, a bit faster than earlier estimates.
   The revision for gross domestic product was up from a 2.2 per cent estimate released a month earlier.
   The latest data meant growth for the full year 2006 was 3.3 per cent, unchanged the estimate last month.

The so-called Financial Stability Forum, a top-level body set up to monitor issues of global market stability, warned this week that recent turbulence on financial markets could be the harbinger of a much deeper shift in investors’ appetite for risk in future.
   Following a closed-door meeting in Frankfurt on Thursday, chaired by European Central Bank governing council member Mario Draghi, the body said that the turbulence in equity and credit markets in late February and early March could augur much deeper and prolonged turmoil in future as investors reduce their willingness to take risk.
   The recent turbulence ‘involved an adjustment in risk positions amidst some increase in macroeconomic uncertainty and concern about the scope of problems in the US subprime mortgage sector,’ FSF said in a statement.
   ‘Market participants need to ensure that risk management scenarios take appropriate account of the risks and potential consequences that would arise from a more pronounced and prolonged reduction of risk-taking,’ the body cautioned.
   The FSF was set up in 1999 by G7 (Group of Seven) finance ministers and central bank governors to promote international financial stability and brings together senior representatives from international financial institutions, regulatory groups and the national financial authorities of the world’s major economies.
   The body said that market participants should also pay attention to risks related to the rapid growth of hedge funds, highly speculative and aggressive investment instruments that are estimated to manage 1.4 trillion dollars (1.1 trillion euros) in assets worldwide.
   ‘Hedge funds have significantly expanded their involvement in credit markets, where complex products can pose substantial risk management and valuation challenges,’ FSF said.
   Germany has long campaigned for increased transparency and even regulation of the largely uncontrolled sector and has placed the issue at the top of the agenda during its year-long presidency of the G8 (Group of Eight) this year.
   FSF said that at the meeting its members ‘emphasised the importance of enhancing the effectiveness of market discipline and continuing attention to strengthening counterparty risk management practices.’
   The FSF is in the process of preparing an update of its 2000 report on Highly Leveraged Institutions which it is due to present to G7 finance ministers in May.

India has delayed the approval of British telecom giant Vodafone’s multi-billion-dollar deal to buy Hutchison Essar while it decides whether the Indian cellular company’s shareholding structure meets foreign investment rules.
   The announcement came after a meeting of the Foreign Investment Promotion Board which was examining if the shareholding structure breached regulations allowing foreign ownership of up to 74 per cent in a domestic telecom firm.
   ‘I have sought more comments from the companies. They have agreed to give us more details. The decision has been deferred,’ Finance Secretary Ashok Jha told reporters late on Thursday.
   He gave no time frame for a decision.
   Last month, Vodafone agreed to buy Hong Kong-based Hutchison Telecommunications International Ltd’s (HTIL) controlling interest in India’s fourth-largest cellular player Hutchison Essar for 11.1 billion dollars.
   Vodafone Group Plc, the world’s largest mobile phone company by sales, has insisted the deal conforms with Indian rules and that it expects the purchase to close in the second quarter.
   HTIL holds 52 per cent of Hutchison Essar directly and has an ‘economic interest’ in another 15 per cent held by Asim Ghosh, Hutchison Essar managing director, and Analjit Singh, chairman of healthcare group Max India, officials say.
   The balance — 33 per cent—is held by Indian steel-to-shipping conglomerate Essar but two-thirds of its stake is controlled through an offshore company for tax reasons, making it foreign.
   Hutchison Telecom stood guarantor for the loans for minority stakeholders Ghosh and Singh, the Press Trust of India reported. If India decides this arrangement makes the minority stakes foreign owned, the FDI cap of 74 per cent in Hutchison Essar may be breached.
   Both Singh and Ghosh say they are the real owners of the stake and not a front for HTIL.
   The shareholding arrangement was approved by the Foreign Investment Promotion Board—the decision making body for foreign investment in the country—last year.
   The board was believed on Thursday to have sought details of the loans taken by Ghosh and Singh for acquiring their stake in Hutchison Essar, the Press Trust of India reported.
   Vodafone’s director for external Relations Mathew Kirk said the company was ‘happy to be offering’ the government any information they want.

Oil prices kept soaring Friday as a standoff between Britain and Iran was taken to the United Nations and a jittery market worried that oil exports could be affected by the crisis.
   After settling at a six-month high a day earlier, light, sweet crude futures rose another 45 cents to $66.48 a barrel in Asian electronic trading on the New York Mercantile Exchange.
   Trading settled Thursday at $66.03 a barrel on the New York Mercantile Exchange — the highest settlement price since Sept. 8, 2006, when crude finished at $66.25.
   Brent crude for May gained 64 cents Friday to $68.52 a barrel on London’s ICE Futures exchange.
   ‘The market is very much factoring in a worst-case scenario,’ said Mark Pervan, a commodities analyst at Daiwa Securities in Melbourne. ‘Other fundamentals have been pushed to the side.’
   Iran detained 15 British navy personnel last week, and a top official said the captives may be put on trial. The incident comes several months into a standoff between Iran, the fourth-largest oil producer, and the United Nations over the country’s nuclear program.
   On Thursday, the U.N. Security Council expressed ‘grave concern’ over Iran’s seizure of 15 British sailors and marines and called for an early resolution of the escalating dispute.
   Worries related to Iran — which is also located along a key waterway in the oil trade — have led traders to put an extra premium on oil prices that are already high due to seven straight weeks of declines in US gasoline inventories.
   Traders are not saying they believe war with Iran is likely, but in an environment of high demand and falling domestic supplies, they maintain that the effects of a large-scale conflict on the energy markets could be huge.

France reduced its budget overspending to 2.5 per cent of gross domestic product last year and brought its public debt down to 63.9 per cent of GDP, official figures showed on Friday.
   The data from the statistics institute INSEE were below the figures predicted by the government, which had forecast a public deficit of 2.6 per cent and public debt of 64.6 per cent.
   A country’s public deficit is the difference between state revenues and public spending. The public debt is the cumulation of past annual spending deficits.
   France’s EU partners launched an action against Paris in 2003 after the French public deficit breached an EU limit of 3.0 per cent of GDP the previous year.
   But the action was dropped in January this year after France brought its deficit below the three-per cent limit in 2005 and was seen to be reducing it even further in 2006.

The dollar lost some ground in Asian trade Friday as market participants remained vigilant amid growing tensions between Iran and Britain and uncertain prospects for the US economy, dealers said.
   They said that the market was largely unaffected by a series of indicators on the Japanese economy, including the first fall in consumer prices for 10 months, while an upgrade to US economic growth had a muted impact.
   The dollar dipped to 117.87 yen in Tokyo afternoon trade from 118.02 yen in New York late Thursday.
   The euro gained to
   1.3346 dollars after 1.3331 but eased to 157.30 yen from 157.43 yen.
   ‘Players remain cautious as there are many factors we have to watch closely such as the Iran issue and the US economic situation,’ said Masaki Fukui, senior market economist at Mizuho Corporate Bank’s forex division.

Lamborghini to launch Gellardo in India
Italian sports car maker Lamborghini on Thursday said it will soon launch its latest model Gellardo Superleggera in the Indian market, with a price tag of at least Rs 20.2 million. The new car would be delivered on order through its select dealer base in the coutry.‘We are excited to bring this international driving experience to the discerning Indian motor-sporting fans. These great machines will be retailed from our exclusive outlet,’ Automobili Lamborghini SpA president and CEO Stephan Winkelmann said in a statement. The Gellardo Superleggera is being sold for 1,26,800 euros (Rs 76,08,000) in the European markets, but would be costlier in India as the country imposes massive customs duty on foreign cars.
— PTI

Italian inflation eases to 1.7pc
Consumer prices in Italy rose by 0.2 per cent in March on a monthly basis and by 1.7 per cent over 12 months, according to preliminary data released by the statistics office ISTAT. In February prices had risen by 0.3 per cent, putting inflation by 1.8 per cent over 12 months. Preliminary consumer prices according to Italy’s EU harmonised index were up 1.1 per cent in March from February and were up 2.0 per cent from a year earlier.
— AFP

France revises 2006 economic growth upwards to 2.1 per cent
The French economy grew by 2.1 per cent in 2006, with the help of a rise of 0.7 per cent in activity in the final quarter of the year, revised official data showed on Friday. A previous set of figures from the statistics institute INSEE in February had put growth at 2.0 per cent. The latest growth data however still put France in the bottom half of economies in the 13-nation eurozone, which averaged growth of 2.6 per cent in 2006.
— AFP