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IMF Lifts Forecast for Asia's Economic Growth


China plans to buy into an Australian uranium field, and the International Monetary Fund says Asia's emerging economies will grow faster than previously thought.

The International Monetary Fund says emerging Asian economies will grow eight-point-three percent in 2006. That is half a percentage point more than it previously forecast. The IMF says the strong growth is mainly driven by the roaring economies of China and India. The fund upgraded its growth forecast for India to eight-point-three percent, and for China to 10 percent.

But IMF chief economist Raghuram Rajan says Beijing's insistence on keeping tight control over the economy, instead of letting the markets dictate interest and exchange rates, will not work in the long run.

"Ultimately, in the market economy that China is rapidly becoming, administrative methods to curb investment are only temporary measures - akin to using band aids to staunch a gaping wound," said Rajan. "Moving all prices steadily to market levels may cause pain, but it is ultimately the only way to go, and it's best to do it when growth is strong."

China's metals corporation, Sinosteel, has agreed to buy a controlling stake in an Australian uranium field. Sinosteel will pay more than $22 million for a 60 percent stake in the Crocker-Well uranium field in South Australia.

Australia agreed in April that China could buy uranium, but only under strict controls that ensure it is used only for non-military purposes.

Japan's third-largest automaker, Honda, and a Japanese research institute say they have developed a new technology to make ethanol fuel from the non-edible parts of plants, such as leaves and rice straw. Existing ethanol production faces limits, because it uses the edible parts of such plants as corn and sugar cane.

Surging oil prices and environmental concerns are increasingly pushing automakers to look for alternatives to petroleum-based fuels.

South Korea's leading plant and machinery exporter, Doosan Heavy Industries and Construction, will build a 200-million-dollar heavy industry complex in central Vietnam. The new plant in the Dung Quat special economic zone will produce equipment for power generators, desalinization facilities and container cranes. Production is due to start in 2009.

In other news from Vietnam, the country's Eastern Asia Commercial Bank has signed a cooperation agreement with the U.S. banking company Citigroup. EAB's staff will receive consumer finance and corporate banking training from Citigroup. The deal is part of Citigroup's effort to win greater access to Vietnam's growing market.

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