AP
China Sees 2007 Inflation at 4.5 Percent
Friday November 23, 8:23 am ET
Report: Chinese Statistics Official Says 2007 Inflation Projected at 4.5 to 4.6 Pct


BEIJING (AP) -- China's consumer inflation rate for 2007 should be about 4.5 to 4.6 percent, the country's chief statistics official said, according to a government news agency report Friday.

Xie Fuzhan, director of the National Bureau of Statistics, made the comment in an appearance Thursday at Beijing's Tsinghua University, the Xinhua News Agency said. The forecast was in line with those of other officials and private economists.

Last year, China's consumer inflation rate was 2 percent.

Inflation spiked to a monthly rate of 6.5 percent in October, blamed mostly on a rise in food prices due to shortages of some items. But those shortages are expected to end soon as a new crop is harvested, and price rises for other items such as fuel have stayed low.

TOKYO (AP) -- Asian stocks soared Wednesday in the wake of Wall Street's overnight surge spurred by the U.S. Federal Reserve's larger-than-expected interest rate cut.

Japan's benchmark Nikkei 225 stock index jumped 500.22 points, or 3.17 percent, to 16,302.02 points in afternoon trading. In Hong Kong, the blue chip Hang Seng Index was up 928.45 points, or 3.78 percent, to 25,505.3.

Stock markets in South Korea, India, Australia, Singapore, Taiwan and the Philippines also advanced. Chinese shares, however, fell.

Investors were cheered by a rally in U.S. stocks Tuesday after the Fed cut its benchmark interest rate by a half percentage point to 4.75 percent. The Dow Jones industrial average surged 335.97 points, or 2.51 percent, to 13,739.39 -- its biggest one-day point jump in nearly five years.

The move came after weeks of global market turmoil amid concerns over tightening credit conditions sparked by rising default rates among U.S. mortgage holders with poor credit. The U.S. rate cut signals that the Fed wants to prevent a slump in the U.S. housing market and turbulence in financial markets from starting a recession.

Asian investors have been worried that the credit crisis might drag on growth in the U.S. economy, a

BEIJING (AP) -- China raised interest rates Friday for the fifth time this year amid signs that repeated attempts to cool the sizzling economy so far have had little effect.

The interest rate on a one-year loan will rise by 0.27 percent, to 7.29 percent, as of Saturday, the Central Bank said. Rates paid on bank deposits also will rise by a similar margin, to 3.87 percent.

A rate hike was widely expected after the government said this week that inflation rose to an 11-year high of 6.5 percent in August, driven by a surge in politically sensitive food prices.

"China is ratcheting up the pace of its monetary tightening," Jing Ulrich, chairwoman of China equities for JP Morgan, said in a report to clients.

"We expect at least one more rate increase in the next six months," Ulrich said. "Inflation risks are on the rise in China, sparked by structural changes in the demand-supply situation for foodstuffs, as well as excess liquidity on the back of the widening trade surplus."

Chinese leaders want to maintain high growth to reduce poverty but worry that the current boom, fueled by exports and investment, could push inflation to dangerous levels or ignite a financial crisis.

The economy has powered ahead despite repeated rate hikes, investment curbs and measures to shrink credit, as well as global worries about the U.S. economy.

It is said that the Great Wall of China, built more than 2,000 years ago, can be seen from the moon. More recently, the country's super-sized stocks have become highly visible too.

Following an 18-month rally, the total universe of mainland Chinese stocks, including those listed in Hong Kong, now stands at some $5,000bn, eclipsing the Japanese market. Chinese companies have taken the number one slot in large parts of the global economy. Measured by market capitalisation, the world's largest bank is Industrial & Commercial Bank of China (at $280bn), while the biggest telecommunications group is China Mobile ($260bn), and China Life and Air China take the top slots in insurance and aviation respectively.

Being big has, well, big advantages. Fund managers are unlikely to trawl through Thai fish processors when they can just buy a Chinese Godzilla and match their peers' performance. Even Chinese companies are playing fund manager, by buying shares in other companies on the basis that this will bloat earnings faster than plant expansion (even if it means the market collapse, when it comes, will deliver a double-whammy).

But are China's corporate giants quite as mighty as they look? Dual listings in Hong Kong and China muddy the waters. If all of ICBC's shares were at the same

BEIJING (AP) -- Grocery shopping has become a painful experience for Zhang Xueyi. Meat prices have risen 50 percent in the past year, and eggs and other products are not far behind, forcing the 31-year-old railway technician's family to spend a third of its $400 monthly income on food.

"If prices go up more, we have to pay. We'll cut back somewhere else," said Zhang as he hefted bags of eggs, vegetables and rice from the market down a narrow Beijing lane.

After a run that has seen sizzling growth top 10 percent for four years, analysts say China's supercharged economy is facing strains that could break out into an upsurge of inflation.

So far the worst damage has been confined to food prices, which jumped 15.4 percent in July over the same month a year ago and drove overall inflation to a decade-high 5.6 percent. But wages are rising too, as are the costs of oil and electric power. Record-setting exports and a stock market boom are sending cash flooding through the economy, stoking demand for goods.

The Chinese economy "might have entered a region where we should be on guard," said a central bank official, Zhang Tao, quoted last week by the state

TOKYO (AP) -- Asian stocks fell sharply Friday morning on persistent concerns stemming from the U.S. housing loan crisis and its impact on the world economy.

The benchmark Nikkei 225 index declined 376.10 points, or 2.33 percent, to end morning trading at 15,772.39 points on the Tokyo Stock Exchange. The index has lost some 8 percent since the beginning of this month.

The broader Topix index, which includes all shares on the exchange's first section, lost 16.32 points, or 1.04 percent, to 1,551.14 points.

In South Korea, the Korea Composite Stock Price Index declined as much as 2.1 percent in early trading before rebounding into positive territory briefly. The Kospi was down 14.62 points, or 0.9 percent, to 1,677.36, about midway through the session.

New Zealand's benchmark NZX-50 index was down 0.5 percent to 3,937.1.

Japanese stocks fell despite Wall Street pulling off a dramatic late-session turnaround to close mixed Thursday after

HONG KONG/SINGAPORE (Reuters) - Central banks from Tokyo to Sydney injected extra cash into banking systems or pledged to do so on Friday, as Asia joined a global campaign by monetary authorities to calm panicky credit markets.

"What the central banks are doing is a concerted effort to inject liquidity. And the worrying thing is that they do that when the system is not functioning the way it should," said Jimmy Koh, a currency strategist at United Overseas Bank.

The moves came after the European Central Bank injected record amounts of cash to prevent a financial system seizure after European banks essentially stopped providing short-term funds to one another on Thursday. The U.S. Federal Reserve also injected cash on a smaller scale.

The trigger was news that France's biggest listed bank, BNP Paribas (Paris:BNPP.PA - News), had frozen $2.2 billion worth of funds hit by U.S. subprime mortgage woes, further increasing fears the subprime problems would squeeze credit

TOKYO (AP) -- Asian stocks fell sharply in early trading Friday following steep declines in U.S. stocks over fears of spreading turmoil from subprime mortgages.

The Nikkei 225 index fell 448.64 points, or 2.61 percent, to 16,721.96 during the morning session on the Tokyo Stock Exchange. The broader Topix index of all shares on the exchange's first section sank 48.94 points, or 2.91 percent, to 1,634.87.

The Korea Composite Stock Price Index fell as much as 70.33 points, or 3.7 percent, to 1,838.35 before rebounding slightly.

The plunge came after the Dow Jones industrial average fell 387.18, or 2.83 percent, to 13,270.68 in New York on Thursday after a French bank announced it was freezing funds that invested in U.S. subprime mortgages, deepening fears

Will India be the next China? The economic numbers make India look as if it is on track to be the next mover and shaker in global markets. The Indian economy -- which the government tracks by fiscal years ending March 31 instead of by calendar years -- posted an impressive 9.4% expansion in 2006-2007 and is on course for 8.2% growth this fiscal year.

China's top-dog status in emerging markets isn't really in danger, though. India's long-term average rate of economic growth is likely to be 7% to 8%, while China's will be on the order of 9% to 10%. That means China is going to retain its substantial lead over India in terms of the size of its economy in the near future. China's gross domestic product is close to topping $3 trillion, overtaking Germany as the third-largest national economy in the world. India's economy, by contrast, will be worth about $1 trillion this year.

India still has major growth bottlenecks to clear. The service sector is going gangbusters, but India's manufacturing sector is far from matching China's role as factory for the world. "Infrastructure has really been the Achilles' heel of trying to develop a more robust manufacturing sector in India," says Rick Rossow, director of operations for the US-India

I recently returned from a trip to Russia, where I met with managers from several of the telecom firms I cover as a stock analyst at Morningstar. Many of these firms' stocks have surged in the past decade, coinciding with the country's positive transformation. While we don't currently see any compelling values in Russian telecom, we thought we'd take the opportunity to share some of our thoughts on Russia's transformation and discuss why a combination of strong growth prospects and an historically volatile market could create investing opportunities in this sector in the future.

Russia's Troubled Past
Historically, because of abundance of land, buildings in Russia have not been built tall. It's a different story today, and tall skyscrapers are actively