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Worried About Inflation, Beijing Freezes Prices

The Chinese government has announced it will freeze all prices it controls to contain the country's inflation surge, and Australian retail group Coles has reported a drop in full-year profits. Claudia Blume at VOA's Asia News Center in Hong Kong has more on these and other business stories from the region.

Beijing says it will freeze all government-controlled prices for the rest of the year. Most prices in China are now outside of government control, but Beijing still sets the price for several important commodities - such as water, electricity, coal and fuel.

The government is worried about mounting public anger over inflation, which reached 6.5 percent in August - the highest in more than a decade. The main reason for the high inflation rate is an increase of the price of pork, China's staple meat. This is due to shortages after a disease killed millions of pigs, and because of the rising cost of feed grains.

Australian retailer Coles Group has posted a 35-percent drop in annual net profit. Profit for the year until July was $646 million, down from more than a $1 billion a year earlier. Coles' chief executive, John Fletcher, says poor performance by the company's supermarkets was mainly responsible for the downturn. But, he says the group's other businesses did well.

"Target, Officeworks, Kmart and Coles Express collectively have generated over 20 percent in earnings growth. Our liquor businesses also performed well, but we recognize that all of this is going to be overshadowed by the under-performance in supermarkets," he said.

Malaysian construction firm WCT Engineering has won a $1.3 billion contract to build a horse-racing track in Dubai. The Malaysian firm will form a joint venture with local construction company Arabtec. Construction of the Nad Al Sheba racecourse is scheduled to be finished in two years, in time for the 2010 Dubai World Cup, the world's richest horse race.

Malaysia's first long-haul budget airline - AirAsia X - says it will start flying to China and Australia in October. The announcement came after the airline received its first Airbus plane in September. The airline ordered 15 more Airbus A-330 planes and plans to offer flights to Europe, Japan and the Middle East in the future.

AirAsia X is a subsidiary of the region's largest budget airline, Malaysia-based Air Asia. Last month, the British Virgin Group bought a 20 percent stake in AirAsia X.

In other aviation news, China's civil aviation regulator says it has approved 27 new international routes to Europe and the United States. The new routes will be opened in the next two years and will be operated by five airlines, including Air China, China Southern and Shanghai Airlines.

Aviation authorities also say more than 200 flights a week will be added to existing routes to Europe and America.