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Thu, Jul 15, 2004 - Page 12 News List

World Business Quick Take


■ Economies

S Korean slip forecasted

A South Korean state think tank yesterday revised downward its forecast for this year's economic growth, citing a prolonged slump in domestic demand which is undercutting recovery. The Korea Development Institute said it now expects GDP to growth 5.2 percent, down from the April estimate of 5.5 percent. The institute attributed the stalled recovery mainly to the sharp rise in oil prices and credit tightening measures in the US and China. It projected GDP growth of 5.7 percent for the second quarter, down from its previous forecast of 6.1 percent. Its full-year private consumption growth fore-cast was sharply cut to 0.7 percent from 3.3 percent. At the same time, the institute raised its current account surplus projection for this year to US$24.7 billion from US$16.6 billion.

■ Insurance

China wants more coverage

China, losing nearly US$18 million a day to natural disasters, hopes to set up a system to insure against earthquakes and other catastrophes within three years, the China Daily said yesterday. "China has yet to forge a sophisticated and complete catastrophe insurance system," the paper quoted Liu Jingsheng, an official with the China Insurance Regulatory Commission, as saying. The commission also hoped to tap foreign underwriters for their expertise in reinsur-ance, earthquake model management and agricul-tural insurance, it said. Natural disasters had caused 28.5 billion yuan (US$3.44 billion) in losses so far this year, or an average of about 150 million yuan per day, it said, citing Civil Affairs Ministry figures. Damage to houses and infrastructure has usually been covered by the government or by dona-tions, but demand for an insurance system to cover all kinds of property was growing, it said.

■ Retail

Tesco gains China foothold

Britain's leading super-market chain Tesco won its first foothold in China yesterday, announcing it had signed a joint venture with retail chain Ting Hsin (頂新). Tesco said it had signed a 50-percent joint-venture agreement with Ting Hsin for its wholly-owned Ting Cao subsidiary, owner of the Hymall chain of stores. Tesco said it would acquire 50 percent of Ting Cao's equity in Hymall for ?140 million (US$260 million) cash, valuing the whole business at ?280 million pounds. The trans-action was expected to completed within four months, Tesco said in a statement to the London Stock Exchange. Hymall operates a chain of 25 hypermarkets in China and plans to open up to 10 more stores in the coming year.

■ Automobiles

Parts venture announced

Volkswagen plans to invest 1.42 billion yuan (US$171.9 million) in a new auto parts joint venture with its partner China FAW Group Corp, the German auto-maker said yesterday. Volkswagen has announced plans to invest up to 5.3 billion euros (US$6.56 billion) in China by 2008. The new company, called Volkswagen FAW Platform Co, will mainly produce axles for passenger cars at a factory in northeastern China, Volkswagen said in a statement. Production will begin late next year, the company said. Volkswagen will take a 60 percent stake and FAW the remainder, it said. The companies also plan to sign an agreement on a joint-venture engine plant in Dalian.

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