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Asia Business: The Week That Was


Some analysts voice disappointment over the lack of progress made on trade liberalization during the Asia Pacific Economic Cooperation summit in Bangkok despite leaders' call to restart stalled World Trade Organization talks.

In the fifteenth APEC ministerial meeting joint statement, leaders agreed to reinvigorate the World Trade Organization Doha Development Agenda, or DDA. The statement acknowledges the failure of the recent WTO talks in Cancun Mexico to move the Doha Development Agenda forward.

But APEC members -many of whom are also members of the WTO -- say the WTO's development agenda still offers potential for economic gains for regions and nations in areas of agricultural reform and improved access to goods and services.

However trade analyst, Philip Wickham, with ING investment bank in Hong Kong, says the APEC summit did little to tackle such key trade liberalization issues as aviation.

"Well it was pretty much a non-event there is no new changes or liberalization for the airlines. In Asia it's still an aviation market that's heavily regulated by bilateral agreements between countries," says Mr. Wickham. "What I was looking at was more - are there any steps being taken to create a so-called large Asian aviation market like what we've seen in Europe."

Despite having to focus on other issues than trade, Mr. Wickham says leaders at the summit do create common goals important to future trade talks. "Five years ago trade dominated because that was what most countries cared about," he says. "But now… security issues came up, the North Korean nuclear issue, so at these side meetings they are at least able to address the [trade] issues among themselves and come up with some common platforms."

In Japan, the government has warned that the burden of the country's aging population will weigh heavily on the economy's growth potential in coming years.

The country's annual economic report stated that the economy could even contract as more public pension and medical plans become bankrupt. But the paper does offer a lifeline, saying drastic reform could prevent the country from further recession.

The report comes just weeks before Japan's general election. Its title "No Gains Without Reform III " echoes past arguments for change by Japan's Prime Minister Junichiro Koizumi.

Chinese insurer PICC announced that it hopes to raise about $697 million through its initial public offering on Hong Kong's Hang Seng (market) by the year's end.

The IPO will be the first such Chinese insurer to list in what analysts predict will be one of the world's largest insurance markets. Other analysts warn however large structural flaws mar the industry in China.

The company hopes the IPO will raise enough cash to cover last year's solvency margin deficit of more than $300 million.

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