China's global trade surplus in 2006 was the highest ever, and Chinese banks will be allowed to issue yuan-denominated bonds in Hong Kong for the first time. Claudia Blume in Hong Kong has more on these or other stories in our weekly look at business news around Asia.
China's trade surplus surged to a record $177 billion last year. This was an increase of 74 percent over 2005.
Sun Mingchun is chief economist with Lehman Brothers investment bank in Hong Kong. He says Beijing will be forced to appreciate the local currency, the yuan, faster this year in an attempt to narrow the surplus. China's major trading partners, particularly the United States, have accused Beijing of undervaluing its currency, giving Chinese exporters an unfair advantage.
Beijing raised the yuan's value against the dollar by about two percent in mid-2005, and has let it gradually climb about 3.8 percent overall in tightly controlled trading.
Sun says there will be another big trade surplus this year, but predicts that the trend will start to slow.
"We think that it will still be very big this year, 2007. We expect it to be very similar to last year but [it] may not exceed last year. So for 2006, the actual number is about $177 billion, for next year we forecast $173 billion"
In other news from China, the country's cabinet has allowed local banks to sell yuan-denominated bonds in Hong Kong. This is the first time bonds in the Chinese currency can be sold outside the mainland, a key step for the yuan towards full convertibility. The move also expands Hong Kong's yuan business, which was first launched in 2004.
The former British colony returned to Chinese rule in 1997, but maintains separate political and economic systems, and a separate currency.
India's second-largest software exporter, Infosys, reported a net profit of $210 million for the three months until December. Profits rose more than 51 percent compared to the fiscal third quarter a year earlier, and resulted from new outsourcing contracts.
The Bangalore-based software company earns 90 percent of its revenue from overseas clients. Last December, Infosys became the first Indian company to be included on the Nasdaq-100, a U.S. stock market index of the largest non-financial U.S. and international companies.
Japan's Nintendo Company raised its net profit forecast for the fiscal year ending in March to $1 billion, up from an earlier projection of $830 million.
The increased outlook for the video-game producer is based on the strong global sales of its portable game player, Nintendo DS.
