22 - 28, 2001
Bush and Jiang united on terrorism
It was the first time the two men had met President George W
Bush has said the US and China have a "common understanding" of the
threat posed by international terrorists.
Mr Bush was speaking after meeting his Chinese counterpart,
Jiang Zemin, in advance of Asia Pacific Economic Co-operation summit in
It is the first time President Bush has travelled overseas
since the 11 September terrorist attacks and the first time he has met the
Mr Bush said he was satisfied with the level of Chinese
co-operation in the battle against Osama Bin Laden, chief suspect of the 11
September terrorist attacks, and his al-Qaeda network.
"There was no hesitation, there was no doubt they'd
stand with our people during this terrible time," Mr Bush said.
Mr Jiang said China was willing to work to develop a
"constructive relationship" with the United States.
"We have a common understanding of the magnitude of the
threat posed by international terrorism," President Jiang said.
"We hope that anti-terrorism efforts can have clearly
defined targets and also should hit accurately and also avoid innocent
The common fight against terrorism looks set to improve
relations between the two countries, damaged by the Nato bombing of the Chinese
embassy in Belgrade two years ago, and by a row over a US spy plane earlier this
China is worried about Islamic separatists in its far western
Speaking before the meeting, President Bush emphasised
He said it would be a chance for President Jiang to look him
in the eye and take the measure of the American president.
French economic stimulus unveiled
In an effort to stave off a recession, the French government
will pump 1.2bn euros into Europe's second largest economy during 2002.
The cash injection will come despite calls for strict
controls on government spending from the European Union.
The parliament was told about new income support measures by
Finance Minister Laurent Fabius who is eager to prevent a dip in growth ahead of
France's national elections early next year.
While Mr Fabius spoke, strikers marched the streets of French
cities, calling for higher wages, better job security and the right to retire at
55 instead of at 60.
Transport was disrupted across the country after four of
France's five main union federations called the strikes.
The official growth prediction for 2001 has been scaled back
to 2% due to the global economic downturn and the crisis caused by the 11
Greenspan upbeat on economy
Mr Greenspan is dubious about stimulus measures prospects for
the future of the US economy have been "scarcely diminished" by the 11
September attacks, Federal Reserve chairman Alan Greenspan has said.
In a speech aimed at summing up the effect of the attacks on
the economy over the past few weeks, Mr Greenspan said that growth in
productivity would undergo "a one-time downward adjustment".
"But once the adjustment is completed, productivity
growth should resume at rates in excess of those that prevailed in the
quarter-century preceding 1995," he told a Congress committee.
Later in the day, the gloss was taken off Mr Greenspan's
remarks when chief White House economic aide Lawrence Lindsey said it was likely
that the US would see two quarters of negative growth — pushing it into a
Mr Lindsey's comment, coupled with fears over the rapid
spread of anthrax scares, helped push the US financial markets into another poor
The Dow Jones industrial average fell 151.26 points, or 1.6%,
to close at 9,232.97, while the more tech-heavy Nasdaq Composite Index slumped
by 4.4% to 1,646.36, its biggest drop in percentage terms since 17 September.
Mr Greenspan was responding to fears that the current slump
in spending and investment something that has particularly hit the technology
sector — could put a check on growth for years to come.
Investment in technology is seen as the motor of the US
economy, since it can help power efficiency gains, and therefore increase output
In a broadly upbeat speech, Mr Greenspan made no reference to
the measures necessary to kick-start the economy.
The Fed has cut interest rates nine times this year — twice
since the attacks — and the government is currently mulling a stimulus package
to boost demand.
Apec backs world trade round
Apec countries control much of the world's trade Trade and
foreign ministers from the Asia-Pacific region meeting in China have backed a
new trade round to tackle the world economic slowdown.
President George W Bush has arrived in Shanghai to attend the
meeting, which will be the first gathering of world leaders since the terrorist
attacks on 11 September.
On Friday he will hold private meetings with Russian
President Vladimir Putin, Japan's Prime Minister Junichiro Koizumi, and Chinese
leader Jiang Zemin.
Restarting world trade talks, scheduled to begin in Doha in
the Gulf Arab state of Qatar in November, has become a top priority of the US
"Ministers have expressed explicit and firm support for
the launch of a new WTO round at Doha next month," Chinese Foreign Minister
Tang Jiaxuan said.
German finance minister warns on growth
German growth is expected to fall below 1.0% this year Growth
in the German economy, Europe's largest, is set to fall well below official
forecasts, the country's finance minister has said.
Hans Eichel warned that the economy would expand by about
0.75% this year, compared with a government target of about 2.0%.
"We have at the moment this year growth of under 1%. We
have to draw up new estimates but I think we will reach 0.75%" he told
German television station ZDF.
Meanwhile, Germany's leading trade unions have called for a
multi-billion euro economic stimulus package to boost the German economy.
Government officials have warned for months that growth will
fall below target.
But few have forecast an outlook as gloomy as that predicted
by Mr Eichel.
"Next year we will clearly come in below the 2-2.25% we
had assumed," he added.
"It will be somewhere between 1% and 1.5%.
Mr Eichel also said the implementation of tobacco tax
increases, planned for 1 January next year, was likely to be delayed by
"one, two or three months".
Germany's export-based firms have been hit by the global
slowdown, and domestic demand has been subdued despite income tax cuts at the
start of the year.
Although oil prices are well off their highs, domestic demand
is expected to continue to remain subdued following the huge layoffs in the
hi-tech and financial sectors.
Dieter Hundt, the head of Germany's employers' federation
told SWR radio he was "deeply worried" about the economy.
German unemployment is expected to rise to more than 3.9
million in 2002, far above a government target of 3.5 million, which it has
pledged to reach by the next general election in September 2002.
Asia's economies face aftershocks
Asia's economies are bracing themselves for further economic
damage stemming from the attacks on the US.
But there is still substantial disagreement on how economies
will be effected.
Most international financial institutions, such as the World
Bank and Asia Development Bank, are simply saying the US military action is
going to delay the region's recovery by at least six months.
"We think the current economic slowdown in East Asia
will be prolonged by one or two quarters more than it would have been without
the attacks," said Pradumna Rana, head of the regional monitoring team at
the ADB in Manila.
"And when it does pick up in the later part of next
year, the recovery will be weaker."
Microsoft: The company said sales rose 5% in the three
months to September but there was a 42% drop in profits, largely because of
investment losses. Net profit was $1.29bn, on sales of $6.13bn, compared to
profits of $2.2bn for the same period last year.
Hynix Semiconductor: South Korea's Hynix Semiconductor,
the world's third-largest chip maker, has reported a bigger than expected 1.62
trillion won ($1.25bn) net loss for the third quarter.
Merrill Lynch: Over the July-to-September period, Merrill
Lynch earned $422m (£292m), a decline of 53% on the $885m (£613m) reported for
the same period a year ago.
Coca-Cola: Coca-Cola reported profits of $1.07bn, or 43
cents a share, unchanged from the same period of 2000, beating analysts'
McDonalds : Global fast-food restaurant chain McDonalds
fared less well. Profits fell $3m to $545.5m, although the company still
Colgate-Palmolive: Colgate-Palmolive, which makes
toothpaste, soap and pet food, said net profits rose to $296.2m, from $275.3m in
the same period last year.
RJ Reynolds: Third quarter profits rose 13% to $128m, or
$1.31 a share, ahead of consensus estimates for $1.29.
eBay: For the third quarter, net profits rose to $18.8m
from $15.2m a year-ago while revenues shot up to $194.4m from $113.4m.
WH Smith: The news, magazine and book retailer WH Smith
has suffered an 8% fall in pre-tax profits to £130m.
JP Morgan Chase: For the quarter, the JP Morgan Chase
earned $449m (£309.6m), or 22 cents a share, compared with $1.4bn (£965m), or
69 cents a share for the year-ago period.
Citigroup: The nation's largest bank, Citigroup, said it
earned $3.26bn (£2.25bn), or 63 cents a share, in the third quarter, compared
with $3.53bn (£2.43bn), or 68 cents a share, a year ago.
Mortgage lending falls
UK Mortgage lending by banks and building societies fell to
£14.3bn last month, from a record £16.5bn in August, the Council of Mortgage
But the council said that the fall reflected a typical autumn
lending drop, rather than a post-attack slide in consumer confidence.
Anthrax fears depress stock prices
Asian markets fell on US consumer confidence fears European
shares have extended sharp opening losses, after fears over the impact of the
anthrax bacterium on consumer confidence sent US and Asian stock markets
London's FTSE 100 index of leading shares closed down 87
points at 5116.
French shares also closed lower, while German stocks stood
down in late trade, if well above earlier lows.
Shares in US blue chips stood marginally weaker in midday
trade, although the tech-heavy Nasdaq index had clawed its way back into
positive territory, after falling 4.4% on Wednesday.
In Japan, shares in Tokyo Electron, a maker of
semiconductor-manufacturing equipment, lost 9.12%.
The fall contributed to the Nikkei's 2.61% slump to 10,474.8
points at the close.
In Hong Kong, the Hang Seng ended 3.81% lower at 9,869.94.
The slides followed Wednesday's Nasdaq's fall, which was
accompanied by a 1.61% fall in the broad-ranging Dow Jones industrial average.
UK unemployment fall
The number of people claiming unemployment benefit has defied
predictions by continuing to fall, official figures have revealed.
The number of UK dole claimants fell by 4,900 last month, the
Office for National Statistics said.
Singapore's exports dive
Electronics goods sales to the US halved Singapore's exports
suffered their sharpest fall ever in September, as the city state grappled with
its worst recession since the 1960s.
Singapore's economy, which depends heavily on hi-tech
manufacturing, was feeling the impact of the US economic slowdown even before
the 11 September terrorist attacks.
Hi-tech electronic goods make up half of Singapore's
manufacturing output and account for about 12% of the total economy. Exports to
the US fell by almost half in September, compared with the same month a year
earlier. Singapore's overall exports slumped for the seventh month in a row.
Europe says no to airline aid
European carriers remain unhappy with existing aid European
countries will not be allowed to pump money into troubled airlines, except to
cover losses immediately following the attacks on the US on 11 September.
The ruling is in line with previous advice, and ignores the
pleas of governments across Europe that the European aviation industry should
get as generous a handout as its US rivals.
In one small loosening of policy, European Union Transport
Commissioner Loyola de Palacio told EU transport ministers that aid would be
considered on a case by case basis.
The EU previously said only damage done between 11 and 14
September could be considered eligible for state aid.
Bank mulls UK rate cut
Sir Edward cannot rule out a further economic slowdown The
Bank of England would cut interest rates again to prevent a UK recession if
economic statistics suggested the threat was rising, central bank governor Sir
Edward George has confirmed.
"We cannot rule out a further slowdown in the UK,"
he said, insisting that the bank's Monetary PolicyCommittee (MPC) would step in
and cut if that was required.
"If it suggests that the overall economy is weakening
unnecessarily... then we will not hesitate to ease monetary policy further to
try to reduce that effect," he told business leaders in Swansea.
Sir Edward remained confident that a recession can be
"I am still persuaded on the evidence that we will avoid
the overall recession that is widely spoken of in the media, though it may be a
bumpy ride for a time," he said.
Global growth rates would recover by 2004, Sir Edward
predicted, urging his audience to be cautious and not exaggerate when
considering the attacks' effect on the economy.
US industry slump
US industry is running at its lowest capacity for 18 years US
industry is undergoing its longest slump since World War II, official figures
Output at US factories, utilities and mines slid 1% last
month, data from the country's central bank, the Federal Reserve, showed.
The fall represented the 12th successive monthly decline, the
longest since a series of decreases extending from November 1944 to October
The report also revealed that US industry was running at
75.5% capacity, the lowest level for 18 years.
Sharp fall in UK inflation
The headline rate of UK inflation, which includes mortgage
interest payments, fell last month by 0.4 of a percentage point to 1.7%.
The underlying rate fell by 0.3 of a percentage point to
2.3%, just below the government's target level of 2.5%, the Office for National
The fall, which follows a surprisingly sharp rise in
inflation in August, will add to pressure for further cuts in interest rates.
Statisticians credited last month's inflation fall largely to
a drop in petrol prices and reduced mortgage payment, following the Bank of
England's decision to cut interest rates on 2 August.
Last month's cut in interest rates, from 5% to 4.75%, has yet
to show up in the ONS figures.
Japan sets extra budget
Japan's finance minister says reform is safe The Japanese
government has settled on a supplementary budget to kickstart its limping
The decision to spend an additional 2,000bn yen ($16.6bn) in
the current financial year casts doubt on whether austerity measures to tackle
deep-seated economic problems will be implemented, analysts say.
Announcing the extra money, Japanese finance minister
Masajuro Shiokawa pledged that a ceiling on government borrowing would not be
breached despite a shortfall in tax revenues caused by the economic slowdown.
The government will cut its growth forecast for the current
year to March 2002 when it completes drafting the extra budget later this month,
said economics minister Heizo Takenaka.
How the government will find its way out of this conundrum
White House mulls insurance aid
The White House is planning to ask Congress to back a plan
which would relieve US insurers of some of the financial burden they would face
in any future terrorist attack.
But the package on offer — a three-year programme — stops
short of the full-scale government-backed terrorism insurance pool the industry
had hoped for.
In effect, US insurers wanted the government to become an
"insurer of last resort", backing up a multi-billion dollar private
sector fund to be raised by insurers themselves.
N Korea in UK trade move
A senior North Korean official has said his government wants
to begin discussions on re-adjusting old debt owed to British companies.
It is part of efforts to improve bilateral ties and economic
The Deputy Director-General at the Ministry of Foreign Trade,
Ri Hyok, said the government was working on creating a legal framework,
including ways of preventing double taxation to encourage greater investment
from British companies.
EU steps up war on terror funding
Banks will be asked to provide suspects' details The European
Union has announced a major crackdown on money-laundering, as ministers meet to
discuss anti-terrorism measures in the wake of the 11 September attacks.
The new measures will mean that a whole range of
professionals — including accountants, estate agents and lawyers — will be
required to report any "suspicious transactions" they come across.
Tens of thousands of people held peaceful protests across
Germany on Saturday against the US air strikes on Afghanistan. Police estimated
around 25,000 people were involved, but organizers insisted the total was nearer
In London, too, thousands of Muslims and Christians attended
a rally in protest against the attacks. The main events in Germany took place in
the capital, Berlin, and in the southeastern city of Stuttgart, with other
smaller protests in Bonn and in Wuppertal, western Germany.
Anthrax forces US House shutdown
The US House of Representatives shut down till Tuesday as an
extraordinary precautionary measure after 34 members of Senate Majority Leader
Tom Daschle's staff tested positive for exposure to anthrax.