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■ FINANCE

Inflation fears affect Asia

Fears that rising inflation will thwart Asia’s growth have triggered a flight of foreign funds out of regional markets, a Citigroup report said yesterday. China has taken the biggest hit, with the funds offloading US$2.78 billion in shares between January and mid-June, excluding Hong Kong. Foreign fund managers have sold about US$4.6 billion in Asian equities, nearly double the US$2.48 billion they invested during the corresponding period last year, the report said. The data was not all grim. Taiwan emerged with US$2.1 billion from foreign funds this year, Thailand US$109.1 million, India US$34 million and Indonesia US$11 million.



■ SOFTWARE

Kaohsiung park set to open

A 3.8-hectare section of the Kaohsiung Software Park is set to open for new investors and hopes to attract high-potential companies in advanced fields such as biotechnology and information and communication, the Ministry of Economic Affairs said on Friday. “This new investment promotion is part of the government’s plan to balance the regional development between northern and southern Taiwan,” Jerry Ou (歐嘉瑞), the director-general of the Export Processing Zone Administration, told a news conference. Introducing the investment plan, Ou said the software park would target companies in industries such as information and communication technology, biotechnology and traditional industries that are upgrading and transforming their businesses.



■ AVIATION

Delta to cut China flights

Delta Air Lines Inc will cut the number of flights it offers between the US and China later this year — a route it fought to get for years. The carrier projects that demand for its flights between Atlanta and Shanghai, which it began offering on March 31, won’t be as strong this winter as it is now. It plans to return to its current schedule on the route next spring. Asked on Friday if the soaring cost of fuel played a role in the decision, Delta spokesman Kent Landers said: “Fuel has an impact on the entire network and we watch that very closely. But this is a situation where we’re matching the right profile to the market and especially what we’re expecting in the winter.”



■ TRADE

Japan, ASEAN ink deal

Japan ratified a free trade accord with ASEAN yesterday as the country’s divided parliament ended its session. Under the deal, about 90 percent of trade between Asia’s largest economy and the 10-nation bloc, which has a combined population of 550 million, will be tariff-free within 10 years. The government plans to exchange diplomatic documents on the pact with ASEAN member states that have already ratified it, officials said. It will be the first multinational free trade agreement for Japan.



■ UNITED STATES

Economy stagnant: IMF

The economy will be virtually stagnant through much of this year, the IMF predicted on Friday, but avoided talk of a recession and significantly raised its growth forecast of only three months ago. The IMF said the country’s growth this year would be a little above 1 percent, up from an April forecast of 0.5 percent. For next year, the international crisis lender said it expects growth of 0.8 percent, compared with 0.6 percent in April. The improved growth outlook, combined with a surge in energy and commodity prices, suggests monetary policy should be “on hold” for the time being, the IMF said.
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