■ Economies
Seoul raises interest rates
South Korea's central bank unexpectedly cut its key interest rate by a quarter percentage point to a record to spur the economy. Bank of Korea Governor Park Seung and his six fellow policy makers lowered the overnight call rate to 3.5 percent at a monthly policy meeting in Seoul. The decision reflects a slump in consumer demand caused by rising fuel costs and a crackdown on credit-card debt. "The real economy has exhibited a slowdown in its pace of recovery as there has been a delay in any marked improvement of private consumption," the Bank of Korea said in a statement. "The pace of economic growth may be even slower, largely due to the likelihood of the more stubborn than expected persistence of high oil prices and of a worldwide cooling of the information and technology sector."
■ Telecoms
Motorola has IRS woes
Motorola Inc said on Wednesday that the US Internal Revenue Service (IRS) is seeking US$500 million or more in back taxes in a dispute over the way the company calculated earnings. In a federal filing, Motorola said the IRS has concluded that the company should have reported an additional US$1.4 billion in income during the period of 1996 to 2000. Motorola said it is "vigorously" contesting that decision, which would require it pay an additional US$500 million in back taxes. The IRS could also dispute Motorola's reported results since 2000, resulting in additional tax payments. The dispute centers on so-called transfer pricing, which occurs when one unit of a diversified company "sells" goods to another part. The company said it does not expect the matter to affect its overall financial health, even if it loses the dispute, but said it could take a temporary hit to financial results in the quarter in which the dispute is finally resolved.
■ Economies
China's CPI rose 5.3%
China's inflation rate last month rose 5.3 percent year-on-year, its fastest growth rate in seven years, as food prices continued to surge, data showed yesterday. The sharply rising prices have put more pressure on the central bank to raise inter-est rates. The year-on-year rise in consumer prices last month was the highest since February 1997, but came within government fore-casts after prices rose 5 percent in June. Analysts said last month's data sig-nalled a further rise in the inflation rate with prices seen moving a little higher in the third quarter. The latest increase puts inflation level with the central bank's benchmark one-year lending rate, which analysts have warned could force China to raise interest rates, making it more expensive to borrow money. The consu-mer price index in the first seven months rose 3.8 percent year-on-year, com-pared with a rise of 3.6 percent in the first six months and 0.6 percent growth in the same period last year, the National Bureau of Statistics said.
■ Transportation
KLM hikes fares
KLM Royal Dutch Airlines said on Wednesday it will raise airfares by 1 percent
to 3 percent this month in response to rising demand for air travel. The higher rates will apply to all tickets worldwide, it said in a state-ment. KLM has been suf-fering from a slump in international travel blamed on terrorism fears, the war in Iraq, SARS and an eco-nomic recession. The fare hike will apply to tickets purchased from Aug. 17.
A subsidiary of a Hong Kong-based company that has lost control of two critical ports on the Panama Canal said it is seeking US$2 billion of compensation in damages from Panama over its “illegal” takeover of the ports. Panama Ports Co, a unit of Hong Kong’s CK Hutchison Holdings (長江和記實業), on Friday said in a statement that it is demanding the sum under international arbitration proceedings that it had already started. The Panamanian government last week seized control of the Balboa and Cristobal ports on each end of the Panama Canal, after the country’s Supreme Court declared earlier that a concession allowing
DETERRENCE: With 1,000 indigenous Hsiung Feng II and III missiles and 400 Harpoon missiles, the nation would boast the highest anti-ship missile density in the world With Taiwan wrapping up mass production of Hsiung Feng II and III missiles by December and an influx of Harpoon missiles from the US, Taiwan would have the highest density of anti-ship missiles in the world, a source said yesterday. Taiwan is to wrap up mass production of the indigenous anti-ship missiles by the end of year, as the Chungshan Institute of Science and Technology has been meeting production targets ahead of schedule, a defense official with knowledge of the matter said. Combined with the 400 Harpoon anti-ship missiles Taiwan expects to receive from the US by 2028, the nation would have
POSSIBILITIES EMERGE: With Taiwan’s victory and Japan’s narrow win over Australia, Taiwan now have a chance to advance if South Korea also beat the Aussies Taiwan has high hopes that the national baseball team would advance to the World Baseball Classic (WBC) quarter-finals after clinching a crucial 5-4 victory over South Korea in a nail-biting extra-inning game at the Tokyo Dome yesterday. Boosted by three home runs — two solo shots by Yu Chang (張育成) and Cheng Tsung-che (鄭宗哲) and a two-run homer by Stuart Fairchild — the triumph gave Taiwan a much-needed second victory in the five-team Pool C, where only the top two finishers would advance to the knockout stage in Miami, Florida. Entering extra innings with the game tied at four apiece, Taiwan scored
MISSION OF PEACE: The foreign minister urged Beijing to respect Taiwan’s existence as an independent nation, and work together to ensure peace and stability in the region Minister of Foreign Affairs Lin Chia-lung (林佳龍) yesterday rejected Chinese Minister of Foreign Affairs Wang Yi’s (王毅) comments about Taiwan, criticizing China as a “troublemaker” in the international community and a disruptor of cross-strait peace. Speaking at a news conference on the sidelines of the Chinese National People’s Congress, Wang said that Taiwan has always been a territory of China and that it would be impossible for it to become its own country. The “return” of Taiwan to China was the natural outcome of the Chinese people’s resistance against Japan in World War II, and that any pursuit of independence was “doomed
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