TODAY'S BRIEFS Daily News Update - 22 October, 2008

TODAY'S BRIEFS

Citic Pacific shares plunge
Citic Pacific shares plunged more than 55% in Hong Kong Tuesday after the company warned of a huge potential loss from unauthorized currency bets, the South China Morning Post reported. Shares of the Hong Kong arm of China International Trust and Investment Corp, the mainland's biggest state-owned investment company - which had been suspended from trading on Monday - fell to HK$6.52 (US$0.84), shrinking its market capitalization to HK$14.3 billion (US$1.84 billion), less than the amount it says it stands to lose. Brokerage firms cut their ratings on the company and their targets for its share price. Meanwhile, Citic Pacific demoted Frances Yung Ming-fong, director, group finance and daughter of Chairman Larry Yung Chi-kin, and cut her salary for her involvement in the currency bets amid questions about her job title. Citic Pacific earlier announced the resignations of Group Finance Director Leslie Chang Li-hsien and Financial Controller Chau Chi-yin.

Export tax rebates raised
In an effort to help Chinese factories that are being hurt by slowing demand from overseas, Beijing has raised export tax rebates on toys and textiles, AP reported. As of November 1, the export tax rebate on clothing and textiles will be raised to 14% from the current 13%. The tax rebate on toys will be raised to 14%, from the current 11%. These increases are part of China's efforts to help factories during the global economic crisis. Earlier this month, state media reported that more than 50% of China's toy exporters had gone out of business in the first seven months of the year.

China approves Agricultural Bank changes
Agricultural Bank of China (ABC) will undergo a restructuring that reportedly will include a recapitalization of about US$20 billion from China's sovereign wealth fund, the Financial Times reported. China approved the plan for the bank to become a shareholding bank as part of Beijing's long-term plan, started about 10 years ago, to overhaul the country's banking sector. A subsidiary of China Investment Corp, the sovereign wealth fund, will inject the money into the bank, the last of the country's large banks to be restructured in preparation for an eventual stock market listing. ABC is known for loaning money in poor rural areas and has suffered from a higher bad loan ratio than other banks.

ICBC seeks more assets outside China
Industrial & Commercial Bank of China (ICBC) plans to double its assets outside China within three years, Reuters reported. ICBC Vice President Wang Lili said the bank wants to increase its business abroad, which is currently 5% of total asset volume, to 10%. She said: "We have to be more international ... and the opportunities are there." Wang said the bank, which opened a branch in New York last week, did not have plans to acquire US financial assets "in the very near future." This week ICBC opened a branch in Doha, Qatar, and last month it opened one in Sydney, Australia. Wang said ICBC was not planning to expand in the Middle East by way of mergers and acquisitions.

CNPC to help develop oilfield in Uzbekistan
China's largest oil company, China National Petroleum Corporation (CNPC), will jointly develop an oilfield in Uzbekistan with that country's state oil company, state media reported. The field has oil reserves of more than 30 million tons, and is expected to have an annual capacity of 2 million tons, CNPC said. The Chinese company said the agreement will help meet Uzbekistan's demand for oil and boost the development of China's upstream natural gas business. It said the project will also help CNPC improve its oil drilling technology.

US company recalls Chinese-made cribs
A US company has recalled cribs made in China, Taiwan and Indonesia after two babies reportedly died in them, Reuters reported. Delta Enterprises recalled about 1.6 million cribs but did not give details on the deaths. Chinese Foreign Ministry spokesman Qin Gang said he had no information on the cribs, but added that China takes product safety very seriously, especially where children are concerned. Qin said China would act on any complaints. The China National Furniture Association said it was not aware of the recall, but said it is possible that the safety risks were in the design of the cribs, not in their manufacturing. The crib recall comes as China continues to deal with the scandal over contaminated milk, which has killed at least four children.

Taiwan protesters knock down mainland envoy
Pro-independence protesters in Taiwan pushed a mainland official to the ground on Tuesday, AP reported. The attack on Vice Chairman Zhang Mingqing of the Association for Relations Across the Taiwan Strait was shown on Taiwan television news broadcasts. It took place in the southern city of Tainan. About a dozen protesters surrounded Zhang, shouted anti-communist and pro-independence slogans, and knocked him down. Relations between Beijing and Taipei have been improving since Taiwan President Ma Ying-jeou was elected seven months ago. He has promised to improve economic and political relations with Beijing. The president's office issued a statement condemning the attack.