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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (925)	8/22/2002 2:01:02 AM
From: Don Green	Respond to of 49986

Investors flock from Taiwan to China AUG 22, 2002 Taiwan sees investments plummeting and factory closures rising sharply, as 'China magnet' demonstrates its appeal By Lawrence Chung STRAITS TIMES TAIWAN BUREAU TAIPEI - Taiwan has seen a dramatic rise in the number of factory closures and a drastic plunge in incoming investments, as both Taiwanese manufacturers and overseas investors continue to flock to the lucrative Chinese market. The figures are telling - factory closures rocketed by 67 per cent last month from a year earlier, to 296. Foreign investments plummeted 49.7 per cent to US$352 million (S$617.4 million) in the same month, with total investments for the first seven months of this year shedding 47.44 per cent. These statistics point to the faltering attractiveness of Taiwan's investment environment as well as the tremendous appeal of China to which most of the capital flowed, said analysts here. 'Mainland China has become an economic magnet that is proving too strong to resist,' said economist Liang Chin-yuan. 'The great potential of the vast mainland market has attracted both local and foreign investors, resulting in the drop in investments.' According to the Economics Ministry, Taiwanese pumped US$1.94 billion into businesses in China in the first seven months of the year, up 19.59 per cent over the same period last year. In fact, the fever has seized most of Asia, with 57 per cent of foreign investments that could have flowed to South-east Asia going to China, said economist Liu Tai-ying. Mr Liu, chairman of China Development Holding and former financial caretaker of opposition party the Kuomintang, said Taiwanese investors had been relocating rapidly to the mainland. 'They have been fleeing to mainland China in quick succession,' he said. Taipei businessmen who would have invested in the southern port city of Kaohsiung have also shifted to China, he added. Official statistics in China showed more than 50,000 Taiwanese businessmen have poured between US$70 billion and US$100 billion into the vast Chinese market. But Taiwanese officials tried to play down the attraction of China, pointing instead to Taiwan's brisk second-quarter exports, that have resulted in a trade surplus of US$5.98 billion. Taiwan also enjoyed a record international balance of payments surplus at US$16.19 billion in the same period, with net capital inflow of US$10.66 billion, they said. Taiwan has been counting on a rebound in exports to fuel a recovery from its worst recession on record. Economists, however, said Taiwan still had a long way to go. Trade and payments surpluses and net capital inflow demonstrate signs of an improving economy, but imports were still low and domestic demand weak, they said. 'This is mainly because of the reduction in both local and foreign investments,' a central bank official told The Straits Times. Copyright @ 2002 Singapore Press Holdings straitstimes.asia1.com.sg.

To: Les H who wrote (925)	8/22/2002 4:05:45 PM
From: Les H	Read Replies (1) \| Respond to of 49986

Is it goodbye, Saudi Arabia? janes.com Students of the vast, barren expanses of Saudi Arabia and the secretive ruling Al-Saud family assumed in the last couple of months that King Fahd bin Abdul Aziz, who had languished in a clinic in Geneva for quite some time, was about to die. They were wrong. Last week, King Fahd rose from his hospital bed and decamped to his palace in the south of Spain. So the question of the succession is off the agenda? No. Foreign Report can reveal that the House of Saud is now threatened by the results of years of mismanagement and the aftershocks of the terrorist attacks on New York and Washington. How long will the Al-Saud last? We make a prediction. Since its establishment and especially since the country's emergence as the world's chief oil supplier, the Saudi monarchy has played a peculiar role. Officially, it was the closest strategic ally of the United States in the Arab world; privately, it encouraged a hardline puritanical and violently anti-Western brand of Islam (Wahabism). It financed religious schools, the Madrassas, in much of Asia, Africa and even parts of Europe. The schools taught little more than primitive Islam, and bred the squads of terrorists that infested Afghanistan and Pakistan. The tactic appeared to make sense for the 6,000-odd princelings of the House of Saud, for it allowed them to appear as both essential to the West and as enemies of the West at the same time. The snag is that some of the fanatics created in the process chose to take the latter role last September. Much has been said and written about the rising anger in the US against a government that had helped to create this terrorist movement. The anger erupted into the open when a report compiled by the Rand Corporation - a think-tank close to the American government - was recently leaked to the media. It identified Saudi Arabia as a major problem for the Bush administration in the Middle East. The two sides sought to minimise the significance of this episode. Yet the reality remains that, behind the scenes, the Americans are now taking concrete steps to eliminate their dependence on Saudi Arabia as soon as possible. Even more important is the effort that the Bush administration is making to remove its troops from Saudi territory. The Pentagon has long grown tired of these bases. They cannot be used for any serious operations: the Saudis refused to give official permission for their exploitation during the Afghanistan war, and have recently imposed a ban on their use during the forthcoming Iraq war. Maintaining strategically useless bases and being criticised for doing so is too much for the Pentagon to stomach. A swift withdrawal would be regarded as a slap in the face for the Saudis. So the Bush administration now has another strategy: it is building new bases in the smaller principalities surrounding Saudi Arabia, places like Qatar, Kuwait and Bahrain.