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Asia Business: The Week Ahead - 2002-07-08

Civil servants in Hong Kong take to the streets and a Japanese clothing retailer cultivates an environmentally conscious image. An estimated 35,000 civil servants flooded the streets Sunday to protest wage cuts. The demonstrators are angry over a government decision to push legislation mandating salary reductions of up to four and a half percent. They say the legal move opens the way for future cuts in pensions and benefits.

The government says it needs the legislation to avoid court challenges from employees. Officials add that public sector salaries must drop to combat a sharp economic downturn and a large budget deficit.

For the second time this year, Korea Electric Power, or Kepco, has failed to auction its 90-percent stake in Powercomm, a networking unit. The company says the three bid proposals it received were well below its expectations.

The sale of Powercomm is part of the government's plan to privatize Kepco and restructure the South Korean power industry. The privatization plan has drawn repeated protests from power workers who fear layoffs, but is welcomed by the public because it is expected to cut utility costs.

Kepco says it hopes to complete the sale by the end of the year.

Japan's most popular inexpensive clothing chain, Uniqlo, has launched a recycling program for one of its best-selling items, fleece jackets. It is collecting the old garments from customers and using them to make construction materials.

The company has built its own recycling plant in cooperation with Toray, a Japanese conglomerate. Company spokesman Yasuhiro Hayashi says Uniqlo feels a corporate responsibility to do more and the recycling plan fits with the company's philosophy.

The move could help attract younger Japanese consumers, who tend to be environmentally conscious. The retailer, while highly popular, has suffered from weak sales in the last nine months. In June, Uniqlo recorded a 33 percent fall in sales over the same month in 2001.