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Hong Kong Shows Mixed Signs of Economic Recovery - 2004-04-26


There are mixed signs of economic recovery in Hong Kong, and a huge pension fund in the United States says it will keep banking on the Philippines.

The property market in Hong Kong may have stopped a long downward slide. Analysts say the real estate market has strengthened for seven straight months, with prices rising 45 percent since August.

The number of home sales has risen to 11,000 transactions a month - double the number at this time last year. Property prices still are down about 50 percent from their levels in 1997.

The upbeat property news is widely seen as a sign of economic recovery. It coincides, however, with an unemployment rate that remains stagnant at 7.3 percent.

Financial Secretary Henry Tang says the fact the unemployment rate is stabilizing is good news for Hong Kong. "Because of the improving economic situation, it has attracted more people to join the labor force - and thereby exerting pressure on a faster pace of reduction on the unemployment rate," says Mr. Tang.

Hong Kong's tourism industry will get a shot in the arm from mainland China beginning July 1. An additional 43 million Chinese tourists will be allowed to travel individually to Hong Kong from nine more cities, including Nanjing, Suzhou, and Xiamen.

China began allowing individual mainland tourists to visit Hong Kong last year to help boost the territory's economy, which was badly damaged by SARS. The Individual Visit Scheme, as it is known, has already pumped more than $1 billion into Hong Kong. Most Chinese citizens, however, still must join approved tour groups to visit Hong Kong.

South Korean authorities say the country has overtaken Japan to become the world's leader in shipbuilding. The Commerce, Industry and Energy Ministry in Seoul says South Korean shipbuilders won nearly 44 percent of all international orders last year. Japan trails with about 28 percent of the world market.

South Korean ship exporters expect to reach a target of $12 billion in sales of cargo vessels this year. South Korea is still involved in a trade dispute with the European Union, which accuses Seoul of unfairly subsidizing the shipbuilding industry.

The United States' largest pension fund says it will retain its investment in the Philippines - despite an earlier warning it would pull out.

The California Public Employees Retirement System Board, known as Calpers, had warned the political and financial climate in the Philippines had become too unstable to retain the $67 million investment. The president of the fund says the Philippines government has since provided additional information to reassure investors.

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