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Asia Business: The Week Ahead - 2003-09-08


Australia's property boom may be fueling a retail sales bubble. And Hong Kong is printing new money it hopes will be counterfeit-proof.

Official government data indicates Australia's economy grew two percent in the year to June - the lowest rate of growth since 2001. The economy grew just .01 percent in the three months ending in June.

Despite the slowdown, Australian retail sales numbers remain robust - increasing by .08 percent from June to July. Analysts say the spending spree is fueled by a rise in home prices: people are getting cash to spend by tapping into the increased value of their homes through new mortgage arrangements.

TD Securities analyst Stephen Koukoulas tells the Australian Broadcasting Corporation that trend puts a lot of homeowners in a vulnerable position. "If house prices were to have a period where they were even flat, let alone if they started falling, the implication for the economy is pretty dire, given how leveraged the household sector is to house prices continually going up," he says. China's official state media says the country plans to ease controls over foreign exchange purchases by its citizens. Starting next month, Chinese residents will be able to buy up to $3,000 worth of international currency for trips to other countries. That is an increase from the previous limit of two thousand dollars.

If they plan to spend six months or more abroad, they can take up to $5,000. The new regulations aim to boost hard currency outflows and ease pressure on China's currency, the yuan.

Hong Kong monetary authorities say they plan to circulate new bank notes this December, with enhanced security features. The new notes are to include a bar code readable only under fluorescent light, a hologram, and an iridescent image of Hong Kong's bauhinia flower.

Hong Kong officials say existing banknotes have been in circulation for 10 years, and need to be upgraded for security against possible counterfeiters. Current notes will be gradually removed from circulation as they become worn out.

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