Newswire: South-South Cooperation

[Peru – Brazil] - Eletrobrás sets sights on Peruvian generator – BNAmericas

Brazilian federal power holding company Eletrobrás (NYSE: EBR) is planning to buy a Peruvian generator to participate in an upcoming hydro auction in Peru, company CEO José Antonio Muniz Lopes told journalists. The executive declined to say which generator Eletrobrás was looking to acquire but said the purchase was essential for the Brazilian holding group to operate in Peru.


[Peru – Brazil] – Brazil, Peru Work Out Details of Hydro Plants – Latin American Herald

Energy ministers from Brazil and Peru announced details of plans for several hydroelectric plants to be built in the Andean nation, saying after a meeting that 80 percent of the energy generated by the stations would go to Brazil and the rest to Peru.

Both partners will have the right to sell their respective energy quotas to other South American countries, Brazilian Mines and Energy Minister Edison Lobao said Friday after a meeting in Rio de Janeiro with his Peruvian counterpart, Pedro Sanchez.

The first five power stations – to be built in Peru’s eastern lowlands at a cost of between $12-15 billion – will generate a combined total of 6,000 megawatts annually once they come on stream in 2015.


[Peru – South Korea] - Peru, S Korea examine tomorrow progress of APEC bilateral agreements – Andina

Peru and South Korea examine on Wednesday the progress of the bilateral agreements achieved by Presidents Alan Garcia and Lee Myung-bak during the summit of leaders of the Asia Pacific Economic Cooperation (APEC) held in Lima in November 2008, the Korean Embassy reported. "The agreement achieved last year includes mutual cooperation in oil, mineral and natural gas sectors", the Ambassy reported.


[Peru – Japan] - Peru, JICA to invest US$ 23.3 million in 6 new docks in Peru – Andina

Peru’s Government and the Japan International Cooperation Agency (JICA) will invest 70 million soles (around 23.7 million dollars) in the construction of 6 new docks located along the Peruvian coast, reported today Production Minister Mercedez Araoz.


[Venezuela – Russia] - Russia Promotes “Energy Alliance” with Venezuela – Latin American Herald

Prime Minister Vladimir Putin said Tuesday he was ready to promote an “energy alliance” of global oil giants Russia and Venezuela, and confirmed his willingness to study Caracas’ requests for additional arms purchases.

Putin told Venezuelan Energy Minister Rafael Ramirez that Russia will employ “the most modern equipment and technologies” to carry out plans for cooperation with Venezuela in the oil and gas sector.


[Venezuela – Brazil] - Brazil To Export Coffee Immediately to Venezuela – Latin American Herald

The accord was struck by representatives of the ministry and the state-run firm Cafe Venezuela last Friday and represents $4.1 million in revenue for small producers and family cooperatives in southeastern Brazil.

Weekend Newswire: South-South Cooperation

[Brazil - Argentina] -- Brazil, Argentina Working on $1.5 Billion Credit Line
Brazil and Argentina are nearing agreement on a “precautionary” measure to create a $1.5 billion credit line to help boost liquidity amid the global financial slowdown, ministers from the two countries said.

As many as seven countries, including Argentina and Uruguay, may establish reciprocal credit lines to help boost liquidity in South America, Brazilian Finance Minister Guido Mantega told reporters in Buenos Aires. Argentine Economy Minister Carlos Fernandez said the credit line with Brazil would be for the equivalent of $1.5 billion in local currencies.


[Peru - South Korea] -- Peru, S Korea to hold 2nd round of FTA talks
The Second Round of Negotiations for a Free Trade Agreement (FTA) between Peru and the Republic of Korea will be held in the Peruvian capital Lima on May 11-14, the Ministry of Foreign Trade and Tourism (Mincetur) reported Sunday.

On Monday, the negotiating teams will discuss issues such as dispute settlement, trade remedies, temporary entry, investment, sanitary and phytosanitary measures, cooperation, rules of origin and public purchases.

On Tuesday, they will discuss trade in goods, intellectual property, telecommunications and financial services.

On Wednesday, the meeting will focus on institutional and labor matters, financial services and competition policy.

On Thursday, issues to be discussed include customs and trade facilitation, services and investments, as well as environment.


[China - Zambia] -- Zambia picks China group to run Luanshya copper mine
Zambia on Friday selected Chinese company NFC Africa as the new investor to run the closed Luanshya Copper Mines (LCM), which is due to restart production at the end of May.

"It is now with great pleasure that I announce the sale of the 85% shares to China Nonferrous Metals Mining, commonly known as NFCA," Zambia's President Rupiah Banda told former Luanshya Copper Mines workers at a public meeting.

Weekend Newswire: Asia, Oceania

[China-Kuwait] -- Sinopec, Kuwait to Build $9 Billion Plant in China
China Petroleum & Chemical Corp., Kuwait Petroleum Corp. and an overseas oil producer plan to build a $9 billion refining and petrochemical plant in southern China’s Guangdong province, according to the head of China’s energy authority.


[China-Brazil] -- Vale ships record iron ore to China in Q1
Brazil's Vale, the world's largest iron ore producer, shipped 34.63 million tons of iron ore to China in the first quarter of 2009, which marks a quarterly record, the company announced on May 6.




[China] -- China’s Investment Growth May Quicken as Export Slump Eases
China’s investment growth probably accelerated as a decline in exports moderated, strengthening a fledgling recovery in the world’s third-biggest economy.


[China] -- China launches campaign to counter disasters
China needs stronger steps to promote public preparedness and early warning systems for natural disasters, experts said ahead of the one-year anniversary of the Wenchuan earthquake.


[South Korea] -- Korean lenders hit by 75% drop in profit
South Korean banks are grappling with deteriorating asset quality amid the economic downturn, which according to the country’s financial regulator led to a 75 per cent drop in combined profits in the first quarter.


[South Korea] -- SKorea to set up US$802m resources development fund
SEOUL: South Korea Sunday unveiled plans to establish an 802 million dollar fund for investment in overseas mineral mines, oil fields and gas wells.


[India] -- State Bank of India Profit Exceeds Analyst Estimates
State Bank of India reported fourth- quarter profit rose 46 percent to a record, exceeding analysts’ estimates, as lower lending rates lured borrowers and gains from trading grew more than fivefold.

Net income rose to 27.4 billion rupees ($556 million), from 18.8 billion rupees a year earlier, the nation’s largest bank said in a statement to the Bombay Stock Exchange today. That beat the 21.7 billion rupee median estimate of five analysts surveyed by Bloomberg.


[Australia] -- Australia May Face Debt Crisis From Grants to Young Home Buyers
Australian Prime Minister Kevin Rudd’s bid to ensure his housing market avoids the global property slump may push a generation of buyers into a debt crisis.

Grants of as much as A$21,000 ($16,142) to first-time buyers and the lowest interest rates in 49 years have emboldened more than 40,000 young Australians to take out home loans since October, stoking demand for properties that cost less than A$500,000.


[New Zealand] -- NZ Crown Minerals Boosts Funding for Oil, Gas Exploration
Energy and Resources Minister Gerry Brownlee has announced a renewed seismic survey program to encourage New Zealand oil and gas exploration.

As part of Budget 2009 a total of $20 million over three years will be allocated to the seismic data acquisition program run by Crown Minerals, which is responsible for the administration and promotion of New Zealand's oil and gas.

Building China's position in multilaterial organizations

China announced plans to create a $10 billion fund for investment cooperation between itself and its fellow ASEAN (Association of South East Asian Nations) members.

Additionally China will provide a $15 billion credit line to its South East Asian neighbors, further extending its influence in the region.

China has been making its presence known in multilateral organizations around the globe. Recently pledging increased levels of support for organizations like the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB).

Bloomberg reports in this article:

The investment fund will promote infrastructure development linking China with the 10 members of the Association of Southeast Asian Nations, while the loans will be offered over three to five years, according to a statement on the Foreign Ministry Web site today citing an interview with Foreign Minister Yang Jiechi.

The measures from the world’s third-largest economy, and one of the few forecast to maintain growth this year, may help speed recovery from the global financial crisis and cement China’s leadership in the region. The nation has already signed currency swap agreements with Indonesia, South Korea, Hong Kong and Malaysia this year to help ease foreign-exchange shortages and aid bilateral trade and investment.

“China is going to take the opportunity of this crisis to further establish itself in Asia,” said Huang Jing, a visiting professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy. “All this will have a huge political and diplomatic impact in the region, in addition to the economic impact.”

Check out this link see a post a few weeks back on China & the IMF / IDB.

China and Argentina Agree on Currency Swap --Update from IDB annual meeting in Colombia

March 30 (Bloomberg) -- The central banks of China and Argentina reached an agreement for a three-year, 70 billion yuan ($10 billion) currency swap, Chinese Central Bank Governor Zhou Xiaochuan told reporters in Medellin, Colombia, today.

It’s the first such accord between the world’s third- biggest economy and a Latin American nation. The move follows swap accords between China and Indonesia, South Korea, Hong Kong, Malaysia and Belarus.

The agreement broadens Argentina’s access to foreign- currency reserves and may ease concerns about the country’s ability to control the peso amid uncertainty over a conflict with farmers over export taxes and legislative elections scheduled for June 28. Argentina wasn’t part of a swap facility program created by the U.S. Federal Reserve for emerging markets, including Brazil and Mexico, last year.

Click here to access this full article from Bloomberg

Russia-Japan inaugurate liquefied natural gas plant on Sakhalin Island on Wednesday

Yesterday, only a few days after agreeing to supply oil to China for 20 years in exchange for $25 billion in loan guarantees—Russia, opened it first liquefied natural plant meant to supply fuel to East-Asia.

Russia... the titan of natural gas has profited handsomely over the years from exporting energy to Europe.

However, tensions between the West and Russia have relatively high since last summer when Georgia and Russia entered a state of war (see map), with each side still debating who started the hostilities.

Map of the Caucasus Region

Much of the tension over Russia's influence in the Caucasus (the region Georgia is located) stems from the fact that Georgia is home to the only pipeline that transports energy to Western Europe that is not “Made in Russia.

After the slew of political and regional disputes with Europe, Russia is turning east for new partners. The move makes logical sense. The economies of East-Asia, for example Japan and South Korea, are powerful consumer states that coincidentally have virtually no natural resources.

New York Times journalists, Andrew E. Kramer describes the moves as being “prompted by both the promise of a marriage of Russian resources with Asian manufacturing, and Russia's financial desperation as interest from Western banks and investors dries up.” (Click here to access Kramer's full article from the NY Times website).

The natural gas plant, build on Sakhalin Island north of Japan greatly expands Russia's natural gas empire. Likewise, Asian resource starved countries like China, Japan and South Korea see this as an opportunity to invest cheaply in natural resources their economies will desperately need once the global economy recovers.


Click here AFP News video on this topic.
"Russia launches major gas project on Sakhalin"

China's economic growth slows to 6.8%

According to official data, released from the Chinese statistics bureau in Beijing, gross domestic product grew by 6.8% in the 4th quarter of 2008, a sharp decline from the 9% average gain realized in the first three quarters of 2008.

Goldman Sachs, Thompson Reuters Data Stream PBOC

- China: Total Loans 2008
- China: Industrial Production 2006-08
- China: Real GDP 2000-2009

This is big news for the global economy, especially for commodity markets. Adding to the damages was further news from the region.

Japan saw its exports decline 35% in December, the biggest drop since 1980.

South Korea released official figures, stating its economy has contracted by 5.6% in the 4th quarter of 2008.

Singapore has said it will tap into its reserves from the first time ever, with the president giving his “in-principle approval” to fund a $4.9 billion relief package.

News is not all that good, to say the least. Check out the press from a few major news sources.

China's economy slows sharply, worse yet to come – Reuters
China's economic growth slows – BBC
China's GDP grows by seven-year low of 9% in 2008 - Xinhua
China's GDP growth slowed to 6.8% in fourth quarter (update 2) – Bloomberg
S'pore to tap reserves – The Straight Times
South Korea braces for first recession in 11 years – The Business Times Malaysia
Japan's exports plunge as recession deepens – AP via Yahoo News
Miners to be hit as China's slowdown worsens – The Australian

News reel: Economic Meltdown p2 – China / Asia

Click on article titles to access the full copy from parent websites


Asian stocks tumble – The Straits Times – Jan 15, 2009

HONG KONG - ASIAN stock markets tumbled on Thursday, with Japan's benchmark sliding almost 5 per cent, on gloomy US holiday sales and renewed concerns about the banking industry.

Every market across Asian suffered steep declines, with broad-based selling hitting industries from energy to financials to exporters. A sharp drop in Japanese machinery pointed to a deepening recession in the world's No. 2 economy, while oil prices continued to fall on worries that the global economic slump will further weaken demand for crude.


China may bailout more – The Straits Times – Jan 15, 2009

BEIJING - CHINA is planning more help for its steel, textile, shipbuilding and other key industries, analysts said on Thursday, a day after the government unveiled a stimulus package for its ailing auto sector.


Chinese slowdown, serious risk for the global economy MercoPress – Jan 15, 2009

A severe economic slowdown in China is one of the biggest risks faced by the world this year, the World Economic Forum (WEF) has warned. The WEF report said a hard landing for China's economy could create domestic social tensions and put stress on the global financial system.


Foreign Direct Investment in China Falls 5.7 Percent (Update3) – Bloomberg - Jan 15, 2009

Jan. 15 (Bloomberg) – Foreign Direct Investment in China declined for a third month, adding to the toll that recessions in the U.S. and Europe are taking on the world’s third-biggest economy.

Investment fell 5.7 percent to $5.98 billion in December from a year earlier, the commerce ministry said at a briefing in Beijing today. November’s decline was 36.5 percent.


China Home Prices to Continue Falling Until 2011, DTZ Says – Bloomberg - Jan 15, 2009

Jan. 15 (Bloomberg) -- Home prices and sales in China, which fell last year for the first time in a decade, will continue dropping until they reach a “reasonable” level and will rebound in 2011, property agency DTZ said.


Hong Kong Stocks Fall to Two-Month Low; Yue Yuen, HSBC Decline – Bloomberg - Jan 15, 2009

Jan. 15 (Bloomberg) – Hong Kong's benchmark stock index fell to the lowest in almost two months on concern slowing demand is deepening the global economic slump.


China-U.S. Ties to Get Stronger, Departing American Envoy Says – Bloomberg - Jan 15, 2009 Jan. 15 (Bloomberg) -- The economies of the U.S. and China, together generating 30 percent of the world’s gross domestic product, will become increasingly interdependent in the next 30 years, said America’s longest-serving envoy to China.


China unveils support package to auto, steel industries – Xinhua – Jan 14, 2009

· China's State Council unveiled a support package for the auto and steel sectors Wednesday.
· The gov't will lower purchase tax on cars under 1.6 liters from 10% to 5% from Jan. 20 to Dec. 31.
· The plan also urges improvements in the credit system for car purchase loans.


SKorea to miss growth forecast - The Straits Times – Jan 15, 2009

SEOUL - SOUTH Korea's economic growth this year could fall below the central bank's forecast of 2 per cent as the global recession deepens, the country's second vice finance minister said in a prepared speech on Thursday.


India’s Sensex Falls to One-Month Low; Infosys Leads Declines – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- India’s benchmark stock index fell to the lowest in more than a month. Tata Consultancy Services Ltd. and Infosys Technologies Ltd. led declines after a Canadian customer for their software services collapsed.


Satyam May Take 3 Months to Restate Accounts, Delaying Bailout – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) – Satyam Computer Services Ltd.'s new auditors may take three months to clear up an alleged $1 billion fraud at India's fourth-largest software exporter, delaying access to government funds.

Satyam fell 32 percent today after the government said it has no plans for a bailout until the board seeks aid. Satyam won't know how much it needs until auditors confirm assets and assess how much clients owe, director Deepak Parekh said. ``The government doesn't bail out every sick company,'' he said.


India’s Inflation Rate Falls, Paving Way for Stimulus (Update2) – Bloomberg – Jan 15, 2009

Jan. 15 (Bloomberg) -- India’s inflation slowed to an 11- month low, paving the way for further stimulus measures to bolster an economy expanding at the weakest pace in six years.