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To: DONNA DRANE who wrote (3181)	3/2/1999 12:02:00 PM
From: jmhollen	Read Replies (2) \| Respond to of 7209

More news re: Asia/China: ************************ U.S. firms bet Asia's stock will rise GE, GM, SBC and others are developing plants, making acquisitions and adding stores in the Pacific Rim By Greg Miles CNBC Feb. 26 — American companies used to call Asia the great growth market of the 21st century. But currency problems, roiling stock markets and reduced exports bedeviled the economies of Japan, Thailand, South Korea and Hong Kong on and off over the last 20 months. As these countries slowly lift themselves out of a recession, U.S. firms are moving in to enjoy the upturn. The American businesses are sharply boosting their spending on new stores, plants and acquisitions in the region. CNBC's Greg Miles reports on U.S. firms' renewed interest in investing in Asia. COMPANIES LIKE telecommunications giant SBC Communications, General Motors and General Electric are among the more prominent firms re-energizing their commitment to the region. U.S. retailers are also going after Japan's consumers. Chains like Toys “R” Us, Gap Inc. and Tower Records have added more stores across the island nation — which is also Asia's richest market. “Even though Korea's and Japan's economies are kind of flat at the moment, there are exploitable markets within these countries where there's nothing to gain but big market share,” said Arthur Alexander, president, Japan Economic Institute. U.S. companies are sharply boosting their acquisitions in the region. American deals in Asia rose from $4.1 billion in 1997 to $11.6 billion in 1998, according to Securities Data. In the next few years, that deal-making number is expected to get even higher. Why the surge? Many Asian assets are selling at cheap prices and many Asian companies welcome the foreign capital. Asian nations are also slowly deregulating their markets which means it may be easier for U.S. firms to cut through government bureaucracy over the next few years. General Electric is one of those companies spending money in the Pacific Rim. In its annual report to shareholders, GE said it expects to see its earnings from businesses in Japan more than double within three years from the $300 million recorded in 1998. (GE is a parent company of MSNBC.) GE said it expects to see its earnings from businesses in Japan more than double within three years from the $300 million recorded in 1998. GE has already made a number of investments in the region. It acquired the business infrastructure and sales force of Japan's Toho Mutual Life in 1998, renaming it GE Edison. The American company also purchased the consumer loan business of Japan's Lake Corp, combining it with GE's existing consumer finance business in 1998. GE continued on the acquisition path in early 1999 with the purchase of nearly $7 billion in leasing assets from Japan Leasing Corp. GE said that in three years it intends to establish a $500 million earnings stream from Japan's $4 trillion economy, which is the second largest in the world. But it's not all easy going for U.S. firms in the region. Experts say some companies are finding progress to be slower in Asia than they hoped. One company facing tough times was Merrill Lynch, which bought branches of Japan's Yama-ichi, a broker, after the Asian company went bankrupt. “Merrill Lynch has expanded very quickly, but not as fast as they had planned it. It's more difficult to get the average Japanese investor and saver to move into American-style products like mutual funds,” said Alexander. Despite difficulties like that, experts say U.S. investment in the region is still expected to soar. ************************************ John :-)