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Australia's Central Bank Says Economy Likely to Slow


Australia's central bank says the economy is likely to slow, easing inflationary pressures that led to another interest rate increase last week. And, in China, one of the country's largest road and rail contractors has begun Hong Kong's biggest share listing. Claudia Blume in Hong Kong has more on these and other business stories from the region.

Australia's central bank raised its key interest rate to a 12-year high of 7.25 percent, in an effort to fight inflation. Prices rose 4.1 percent in February.

The country's economy is booming, fueled mainly by high demand for Australian commodities - particularly by China.

But Assistant Governor of the Reserve Bank of Australia Malcolm Edey says there are significant forces that could cool growth. They include high interest rates, tighter lending standards, a slowing global economy and the strong Australian dollar. Edey says the RBA expects that, because of these factors, Australia's economy is likely to slow.

"Weighing up these factors, the RBA's recently published assessment was that the growth of the Australian economy would slow to a below trend pace this year and next and that this would lead to some easing in underlying inflation pressures," he said.

The initial public share offering of China Railway Construction Corporation attracted nearly $70 billion in orders from retail investors in Hong Kong. This made it the most popular initial public offer ever for Hong Kong investors. It topped the previous record of $58 dollars in orders for China's Alibaba.com, last November. It also makes the listing the world's largest IPO, so far this year.

China Railway Construction, one of China's largest road and rail contractors, built part of the new train line to Tibet. The company's shares are scheduled to debut on both the Shanghai and Hong Kong stock markets, this week.

In other news from Hong Kong, Cathay Pacific Airways posted a net profit of $900 million for 2007, an increase of 72 percent from a year earlier. The record gain was mainly driven by high passenger volumes. The airline carried almost 18 million passengers last year, up almost six percent from a year earlier.

U.S. entertainment company Walt Disney will team up with several Japanese animation houses to produce animated programs tailored to Asian audiences.

Disney's first project will be a cartoon about a robot, made jointly with Japan's leading animation studio Toei Animation. Disney said it will also work with Japan's Madhouse studio to produce a Japanese version of its popular "Lilo and Stitch" cartoon. All films will be made using local animation creators and Japanese computer graphics technology.

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