France cuts tax to keep jobs
French President Jacques Chirac said he will introduce tax incentives to dissuade companies such as Hewlett-Packard Co from cutting jobs in France or moving production to countries with laxer labor laws. "Our system of corporate taxes must favor companies which employ in France," he said in his annual New Year's televised address broadcast on TF1 and other major networks. Hewlett-Packard announced on Sept. 12 that it plans to fire a quarter of its French workforce, or 1,240 positions, embarrassing the government after repeated promises to lessen jobless queues. Since Chirac's re-election in 2002, the jobless rate has hovered around 10 percent, denting his popularity. In November, it fell to 9.6 percent.
US-China limits begin
A deal to limit the export of Chinese textiles and apparel to the US market, hammered out in three months of tough talks between Washington and Beijing, was due to come into effect yesterday. The agreement provides for a progressive increase in the Chinese imports until 2008 but would still cap their growth at far less than seen last year. The deal covers more than US$5 billion worth of Chinese imports and could help shore up a US textiles industry that has lost nearly 400,000 jobs since 2001, in part due to fierce Chinese competition. The three-year deal was signed in November. For apparel categories, it provides for annual growth rates in Chinese exports of 10 percent this year, 12.5 percent next year and 15 percent in 2008. For textile products, the rates are 12.5 percent this year and next, and 16 percent in 2008.
■ Real estate
New tax laws commence
South Korea's new laws to prevent real estate speculation take effect today, including higher taxes on the country's richest homeowners and on multiple house sales. The government on Aug. 31 announced it would implement a series of measures to crack down on speculation that drove apartment prices up as much as 12 percent in the first seven months of last year. The new rules will apply to everyone with two or more homes, unless they are supporting elderly parents, according to a joint government statement. Under the new laws, owners of houses worth 600 million won (US$594,000) or more will pay a higher property tax starting this year. Those who own land worth 300 million won or more for non-business purposes will also pay higher taxes.
Singapore shows growth
Singapore's economy grew 5.7 percent last year, exceeding earlier forecasts, and is expected to grow between 3 percent and 5 percent this year, Prime Minister Lee Hsien Loong said. "We grew 5.7 percent in 2005, better than expected. Growth was broad-based. Manufacturing output rose sharply and the services industries also did well," Lee said on Saturday in his New Year's message. External trade grew 14 percent last year, helped by expanding free trade agreements with major trading partners, Lee said. The government is trying to move away from dependence on the electronics sector, where it faces increased competition from China, toward new areas such as biomedical, chemical and shipbuilding. It also wants to build two casinos and integrated resorts to woo more travelers to the city. "To sustain growth, we must press on with economic restructuring," he said.