11 - 17, 2000
China pushes WTO bid
Chinese negotiators and members of the World Trade
Organization met Tuesday in a new effort to overcome final obstacles to China's
"I think the momentum is there," China's lead
negotiator Long Yongtu told reporters as he entered the meeting. China was
"not far" from completing the deal, he added.
The body's working party dealing with the Chinese membership
bid meets from Tuesday to Thursday, with a formal meeting set for Friday. China
has been trying for more than 14 years to join the body that sets global rules
for international trade.
Members arev hopeful that progress will be made on some of
the issues that still divide China and the WTO's 140 members, WTO spokesman
Keith Rockwell said. But, "It would be a surprise if this is the
breakthrough meeting that brings China into the WTO," he added.
The issues include China's use of agricultural and industrial
subsidies, the right of foreign services companies to trade in China, and how to
determine whether Chinese goods are being sold below market price.
Talks last month brought substantial progress on some issues
that had been holding up membership, including a transitional mechanism to
monitor Chinese compliance with its WTO obligations, measures to increase
transparency, and a system to simplify and standardize administration of import
China still must complete a trade deal with Mexico, but that
country has said it will not oppose Chinese membership even if their deal isn't
completed. It now is impossible for China to join the WTO this year.
The WTO general council, which is holding the year's last
meeting this week, needs to approve the final deal before Beijing ratifies it.
China would become a member 30 days after reporting the ratification to the WTO.
Speaking in Brussels Monday, EU Trade Commissioner Pascal
Lamy said he was hopeful this week's talks will make progress.
Strong growth: World Bank
The global economy appears poised for solid growth in the
coming years as technological advances and globalization have helped boost
growth prospects, the World Bank said in a report Tuesday.
In its annual Global Economic Prospects report, the bank said
that while many developing countries could see the fastest growth in a decade,
some of the world's poorest countries are hampered by industrial nations' trade
barriers, further widening the gap between rich and poor.
The report forecasts world economic growth of 3.4 per cent in
2001, up from a March forecast of 3.1 per cent, and predicts growth of 3.2 per
cent in 2002, up from an earlier 3.1 per cent prediction.
It also projects U.S. economic growth of 3.2 per cent in
2001, down from a rapid 5.1 per cent in 2000, before slowing further to 2.9 per
cent in 2002. In March, the bank forecast U.S. growth of 2.7 per cent and 2.8
per cent for 2001 and 2002, respectively.
Growth is expected to be strongest in developing countries,
where the bank sees economic expansions of 5.0 per cent in 2001, up from an
earlier 4.8 per cent estimate, and 4.8 per cent in 2002.
The report also contained the following regional growth
forecasts: East Asia and Pacific of 6.4 per cent in 2001 and 6.0 per cent in
2002. Europe and Central Asia of 4.3 per cent and 3.9 per cent in 2001 and 2002.
Latin America and the Caribbean of 4.1 per cent and 4.3 per cent in 2001 and
2002. Middle East and North Africa of 3.8 per cent and 3.6 per cent in 2001 and
2002. South Asia of 5.5 per cent in both 2001 and 2002. Sub-Saharan Africa of
3.4 per cent and 3.7 per cent in 2001 and 2002.
The bank credited the positive prospects for developing
countries to many nations' adoption of reforms to cut inflation, increase global
integration and improve the health and education of their citizens. But, despite
those improvements, further inroads into poverty reduction face significant
risks, the report warned.
IMF hands Turkey $10b
Turkish Prime Minister Bulent Ecevit said Wednesday that
agreement had been reached with the International Monetary Fund on more than $10
billion in aid to help the country weather a crisis in its banking sector and
IMF and Turkish officials said $7.5 billion would come from a
new supplemental reserve facility (SRF) and another $2.9 billion from Turkey's
year-old $4 billion standby accord with the fund.
An SRF is a short-term facility charged at interest rates
designed to encourage quick repayment.
Turkey needs the fresh money to replenish central bank
reserves drained by a massive liquidity crisis sparked by fears of banking
Turkey also expects the World Bank to discuss and approve $1
billion in financial sector reform loans before the end of this year, following
legislation aimed at paving the way for the privatization of four large state
IMF moves swiftly to avoid past mistakes
While the swiftness of the IMF's response to liquidity
crunches in Turkey and Argentina underlined lessons learned from the global
financial crisis of 1997-99, a slowing US economy and unresolved reforms could
yet make for a rocky year in emerging markets, analysts say.
Early on Wednesday, after just a few days of intense talks,
the International Monetary Fund came to Turkey's aid with a package worth about
$10 billion to help the country deal with the effects of a sudden banking
And weeks of talks with Argentina are near conclusion for a
preemptive rescue package to help South America's No. 2 economy meet $21.5
billion in financing needs next that have unsettled financial markets worried
over Argentina's ability to come up with the necessary cash.
In both cases, swift action by the Washington-based lender
helped calm global markets, analysts said. But it has not always been that way.
Senate passes bankruptcy bill despite
The lame-duck Senate on Thursday sent President Clinton a
bankruptcy overhaul bill he has promised to veto because he believes it would
hurt working families that fall on hard times.
Senators, by a 70-28 veto-proof vote for the bipartisan
legislation, approved the most sweeping bankruptcy law changes in 20 years,
making it harder for people to erase credit card and other debts in court.
Supporters have pushed for the changes over the past three years.
The House and Senate passed competing versions of the
legislation, both by veto-proof margins. The current compromise measure cleared
the House by voice vote on Oct. 12.
For much of the year, lawmakers have sought to reach a deal
on the legislation, which has divided Democrats. Supporters in both parties have
received millions of dollars in political contributions from banks and credit
card companies this election year.
In the final hours of Senate debate on Thursday, one longtime
opponent, Sen. Paul Wellstone, said the bill was "harsh" and he
accused the banking and credit card industries of "blatant hypocrisy"
for aggressively soliciting new business.
Europe caught in tech drift
Europe's main markets closed lower Thursday as falling
computer software and telecom stocks submerged indexes across the region.
London's FTSE 100 closed down 41.9 points, or 0.7 per cent,
at 6,231.4 with fiber-optic component company Bookham Technology (BHM) falling
9.2 per cent after rocketing more than 20 per cent a day earlier.
In Paris, the blue-chip CAC 40 index closed virtually
unchanged, off 0.55 of a point at 5,984.69, bouncing back from a earlier loss of
as much as 1.4 per cent as TotalFina (PFP) rose 3.2 per cent.
Frankfurt's Xetra Dax was down 16.29 points, or 0.25 per
cent, to 6,605.96. In Amsterdam, the AEX index fell 0.4 per cent, the SMI in
Zurich shed 1 per cent, and Milan's MIB 30 slid 0.7 per cent. But Helsinki's HEX
The pan-European FTSE Eurotop 300, a broader index of the
region's largest stocks, fell 0.2 per cent.
Nasdaq falls again
A fresh rash of corporate earnings worries hit the troubled
technology sector Thursday, sending the Nasdaq composite index lower for the
third time in four sessions and bringing its annual loss to 32 per cent.
The Nasdaq fell 43.85 points, 1.8 per cent, to 2,752.65
Thursday. The Dow Jones industrial average slipped 47.02 to 10,617.36, while the
S&P 500 lost 7.91 to 1,343.55.
Market breadth was mixed. Advancing issues on the New York
Stock Exchange beat declining ones 1,443 to 1,390 on trading volume of 1.1
billion shares. Nasdaq losers beat winners 2,361 to 1,554 as more than 1.7
billion shares changed hands.
In other markets, the dollar rose against the euro and yen.
Treasury securities were little changed following a two-day rally.
Lackluster trade in Asia
Pressure from U.S. indices in conjunction with sell-offs in
some key tech and property issues dulled or depressed a number of Asian markets
by midday Friday.
In Tokyo, the Nikkei 225 was down 0.44 per cent to 14,655.64.
In Hong Kong, the Hang Seng Index was up 0.47 per cent at 15,082.15.
The benchmark Nikkei 225 average fell 64.72 points to
14,655.64 by midday and the broader TOPIX index eased 4.85 points or 0.35 per
cent to 1,363.32.
Hong Kong stocks were flat in early trade on Friday as the
benchmark index tested support at 15,000.
The Hang Seng Index was up 70.63 points, at 15,082.15, after
dipping to 14,968.64.
The Hang Seng properties sub-index was up 0.77 per cent, or
131.72 points, at 17,278.73.
In Singapore, the Straits Times Index was down 0.42 per cent,
or 8.25 points, at 1,950.48.
Australian shares were mixed in early trade on Friday. The
S&P/ASX 200 index dipped 3.3 points to 3,305.7, in early trading.
ADB to lend $140m
The Asian Development Bank (ADB) has approved US $140 million
assistance to finance a US $300 million power plant in Bangladesh to produce 450
MW electricity. This is the first private sector power plant project in the
country being supported by the ADB.
Bank of England keeps rates at 6%
The Bank of England announced on Thursday it had left its key
Base Rate unchanged at 6.00 per cent for the tenth month in a row, in line with
October figures showed underlying inflation at 2.0 per cent
on the year, down from 2.2 per cent in September and well below the 2.5 per cent
target the government has set the BoE.
China sees $240 billion export this year
China has predicted its final trade value for this year will
reach a record US $455 billion, up 26 per cent from 1999.
The Ministry of Foreign Trade and Economic Cooperation (MOFTEC),
in a report released on Thursday, said the export value is likely to reach $240
billion, a rise of 23 per cent, while import value should surge 30 per cent to
The official Xinhua news agency, quoting the report, said the
customs statistics for the first 10 months of the year showed a rise in trade of
35.1 per cent to $387 billion, more than the total for the whole of 1999.
The huge growth is fuelled by healthy international markets
and rising prices, as well as improvements to the domestic economy, including
government policies to encourage trade, it said.
Mergers & Acquisitions
Philip Morris—Nabisco: The U.S. Federal Trade
Commission cleared Philip Morris Cos.'s $14.9 billion acquisition of Nabisco
Holdings Corp. Thursday, but required the tobacco and food company to divest
several minor food operations to avoid antitrust concerns.
Emulex inks—Giganet: Electronics components maker
Emulex Corp. struck an agreement Thursday to acquire closely held Giganet Inc.
for $621.2 million in stock, extending the company's network solutions
production capabilities into the Internet protocol category.
Best Buy—Musicland: U.S. electronics retailer Best Buy
Co. agreed Thursday to purchase Musicland Stores Corp., the No. 1 U.S. specialty
home entertainment products and music seller, for approximately $425 million in
Shaw—Moffat Communications: Shaw Communications Ltd.,
Canada's second-largest cable company, extended its reach in Western Canada on
Thursday by acquiring smaller rival Moffat Communications in a C$1.2 billion
(US$785 million) deal.
C&N—Thomas Cook: Germany's second-largest travel
firm C&N Touristic AG said Thursday it was buying tour company Thomas Cook
Holdings Ltd. for £550 million ($795 million), securing a place in the British
Apache—Zama: Independent U.S. energy firm Apache Corp.
said on Wednesday it would buy Phillips Petroleum Co.'s marquee Alberta oil and
gas property for $490 million, marking its third major Canadian acquisition in
the past 12 months.
Wanadoo—Freeserve: French Internet service provider
Wanadoo agreed to buy Britain's Freeserve for £1.65 billion ($2.4 billion) in
stock, giving it access to Europe's second-biggest Internet economy, the two
companies announced Wednesday.
Safeway—Genuardi: Supermarket chain Safeway Inc. is
buying Genuardi's Family Markets Inc., a 36-store chain in Pennsylvania,
Delaware and New Jersey, for an undisclosed cash sum, the companies said
Ciena: Telecommunications equipment maker Ciena Corp.,
based in Linthicum, Md., said pro forma net earnings rose to $41.3 million, or
14 cents a diluted share, in the fourth quarter ended Oct. 31, from net income
of $4.7 million, or 2 cents a diluted share, in the year-ago period.
BG: BG Group PLC said operating profit from continuing
operations rose to £168 million in the three months ended Sept. 30 from £65
million a year earlier, as revenue increased 36 per cent to £585 million.
Sage: British business software maker Sage Group PLC said
its pretax profit for the year ended Sept. 30 rose to £108.7 million ($155.4
million), up from £74.3 million in the previous year.
Jobless claims fall
The number of Americans filing new claims for unemployment
benefits for the week ended Dec. 2 was 352,000, down from a revised 361,000 for
the week before, the U.S. Labor Department reported Thursday.
Natural gas prices rise
Natural gas wholesale prices in the United States spiked
almost 20 per cent early Wednesday into record territory, as freezing
temperatures over much of the nation again sent buyers scrambling for supplies.
Arctic air blanketing much of the nation this week drove January wholesale
prices on the New York Mercantile Exchange (NYMEX) to an all-time record high
Wednesday of $8.80 per million British thermal units (mmBtu).
U.S. factory orders fall
Orders placed with U.S. manufacturers declined at a
faster-than-expected pace in October, a government report released Tuesday
showed, offering more statistical evidence that the U.S. economy is slowing
The Commerce Department said factory orders fell 3.3 per cent
in October, a sharper decline that the 2.5 per cent drop expected by economists
polled by Briefing.com and well below September's revised 1.1 per cent gain.
September's orders initially were reported as a 1.6 per cent increase.
Euro hits two-month high
The euro rose sharply Monday to reach a two-month high
against the dollar, amid expectations the pace of U.S. economic growth will slow
over the coming months.
Europe's beleaguered single currency jumped to 89.05 U.S.
cents from 87.92 cents in late New York trade on Friday. The dollar fell to its
lowest level since the Group of Seven industrial nations intervened in support
of the euro on Sept. 22.
Mortgage rates dip again
U.S. Mortgage rates dipped for the second week, reaching
their lowest level in 17 months. The benchmark 30-year fixed-rate mortgage (FRM)
averaged 7.54 per cent for the week ending Dec. 8, its lowest level in 17
months. The average this week for a 15-year fixed-rate mortgage was 7.19 per
cent, its lowest in 17 months. One-year adjustable-rate mortgages (ARMs) this
week averaged 7.21 per cent.
Long-term Treasurys rise
Longer-dated U.S. Treasurys rose Thursday, holding their
ground after a potent two-day rally fired by optimism a slowing economy may
prompt the Federal Reserve to cut interest rates early next year. Benchmark
10-year Treasury notes rose 3/32 to 103-9/32, while their yield, which moves in
the opposite direction to prices, fell to 5.31 per cent. Thirty-year bonds rose
7/32 to 110-23/32, yielding 5.51 per cent. Two-year notes shed 1/32 to
100-10/32, yielding 5.44 per cent, while five-year notes were unchanged at
102-3/32, yielding 5.26 per cent.