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Tue, Jun 03, 2008 - Page 10 News List

World Business Quick Take

AGENCIES

■ FOREX

Beijing's reserves top region

China’s foreign exchange reserves rose to US$1.76 trillion at the end of April, the China Business News reported yesterday, reaching a level higher than the rest of Northeast Asia’s combined. China’s reserves, by far the largest in the world, expanded by another US$74.5 billion during April, the paper reported, equivalent to about US$100 million every hour. At US$1.76 trillion, China’s reserves are now larger than those of Japan, Taiwan, South Korea and Hong Kong combined. The growth in reserves came amid rising official concern about a fresh surge in hot money — or speculative inflows — spurred by a strengthening yuan and a widening spread between falling US interest rates and rising Chinese rates. The increase in reserves was roughly three times larger than the trade surplus and the value of incoming foreign direct investment — the two traditional sources of reserve growth. This led analysts to conclude that perhaps as much as US$50 billion entered the economy in the form of hot money. “This [figure] seems to suggest the inflow of hot money is speeding up,” the newspaper quoted Logan Wright, an analyst with Stone and McCarthy Research Associates, as saying.

■ AVIATION

Oil prices savaging earnings

Airlines worldwide may report a collective loss of at least US$2.3 billion this year as spiraling fuel costs and a slowing economy wipe out earnings, the industry’s main trade group said. The new outlook, based on oil at US$107 a barrel and issued yesterday at the International Air Transport Association’s annual meeting in Istanbul, marks the fourth cut in projected earnings in nine months. The group had forecast net income of US$4.5 billion as recently as April 1. “It’s another perfect storm,” IATA chief executive officer Giovanni Bisignani said at the meeting. “The spreading impact of the US credit crunch is slowing traffic growth. Skyrocketing oil prices are changing everything.” Geneva-based IATA’s membership includes about 230 carriers representing more than 93 percent of international airline traffic.

■ AVIATION

Berlin exhibitors happy

The Berlin Air Show (ILA) drew 241,000 visitors over its six days, and contracts worth some 5 billion euros (US$7.8 billion) were agreed to, the organizers said after the show ended on Sunday. The majority of the 1,100 exhibitors from 37 countries were satisfaction with their success at the show. The ILA saw 300 aircraft displayed on the ground or taking to the skies, with the star of the show the Airbus A380. Also on view were the two biggest series-production planes ever made, the Antonov An 124 and C-5 Galaxy. Established in Frankfurt in 1909, the ILA is one of the world’s oldest aviation trade shows.

■ ENERGY

Jakarta pushes coal exports

Indonesia, the world’s biggest exporter of power-station coal, will not cap coal exports because the government wants to take advantage of record prices. “Coal export must be maintained for the country to earn foreign exchange,” Energy Minister Purnomo Yusgiantoro said yesterday in a speech at the Coaltrans Asia conference in Nusa Dua, Bali. “We encourage producers to maintain production level that can meet domestic and export demand.” Prices of coal used in power stations have more than doubled in a year and last week reached a record US$151.70 a tonne at Australia’s Newcastle port, the global COAL NEWC Index said.

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