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Chinese Airlines Report Disappointing First-Half Results

A number of Chinese companies have reported disappointing earnings for the first half of this year. They include airlines, the country's largest insurance company and China's largest oil refiner. Claudia Blume in Hong Kong has more on these and other stories in our weekly summary of business news from the Asia Pacific region.

China's largest international airline, Air China, reported a 21 percent drop in profits for the first-half of the year. Air China's earnings fell to about $180 million, down from more than $229 million during the same period last year.

Its rival, China Eastern Airlines, had a loss of more than $30 million for the first half of the year. Both airlines have suffered from high fuel costs and a slowdown in passenger traffic after the May earthquake in China's Sichuan province.

Results were also disappointing for other Chinese companies. Profits for the country's biggest insurer, China Life Insurance, fell 32 percent during the first six months of this year, to $2.3 billion. Analysts say the decline was caused by a steep drop in China's stock market that diminished the company's investment returns.

Meanwhile, China Petroleum and Chemical Corporation, Asia's biggest oil refiner, saw its first-half net profit drop by 77 percent from a year ago. A gap between surging global crude oil prices and government-controlled domestic prices means that Chinese refiners cannot pass on price hikes to consumers, resulting in falling profits.

Australia's second-largest media group, Fairfax Media, says it will eliminate more than 500 jobs across Australia and New Zealand. About one third of the cuts will be editorial positions, the rest will be business, printing and management jobs.

"The program will deliver $50 million in cost savings," said Fairfax Chief Executive Officer, David Kirk. "Around $25 million of the savings will flow into the 2009 financial year."

Toyota had planned to become the world's first automaker by sell more than 10 million cars a year. But it revised its 2009 global-sales target to 9.7 million cars.

The automobile industry has been hurt in recent months by a slower demand in the United States, driven by higher fuel prices and a slowdown of the U.S. economy. At the same time, prices for steel and other materials needed to make cars have gone up.