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General Motors to Move Asian Headquarters to China - 2004-06-28


General Motors is moving its Asian headquarters from Singapore to Shanghai, while China's interest rates may be going up.

General Motors says it is moving its Asia-Pacific headquarters from Singapore to strengthen its presence in China, the world's fastest-growing automobile market. GM will also put $250 million into a testing center, part of $3 billion it plans to invest in China with its joint venture partners.

The move reflects the growing importance of the China market, where GM's sales grew nearly 70 percent in the first quarter of this year.

China said consumer prices will likely rise five percent in June from a year ago, reaching the crucial level at which the central bank has strongly suggested it may have to hike interest rates. It would be the first such move in nearly a decade.

Tao Yushu, spokesman for the National Development and Reform Commission, says the government is doing what it can to minimize inflation's effect on industry. Mr. Tao says the government is working to reduce inflation from a macro-economic stance. He says the government will work cautiously to minimize the impact across industries.

The Asian Development Bank has become a key investor in ADM Capital's ADM Maculus Fund, helps financially distressed but potentially viable companies in Asia.

ADM Capital is a Hong Kong-based investment manager specializing in resolving non-performing loans. Alfredo Pascual, Director of the Asian Development Bank, explains how a partnership with ADM Capital helps the bank reach its objectives.

"For a country to achieve sustained economic growth it needs a robust and efficient financial sector," he says. "A financial sector with heavy non-performing loans will have difficulties. So there has to be an effort to resolve non-performing loans."

Thailand's Prime Minister Thaksin Shinawatra has presented the country's first balanced budget since the Asian financial crisis began in 1997, a $29.3 billion package for the 2005 fiscal year. Mr. Thaksin said the improvement came sooner than expected, due to strong exports, domestic consumption and private investment.

And New Zealand's tourism industry has edged out dairy farming as the top generator of foreign capital, boosted by visits from fans of the "Lord of the Rings" film trilogy and the country's remoteness from the world's trouble spots.

New Zealand, where the trilogy was filmed, made $4.6 billion from international tourism in the year to March 31, 2003, while dairy products, a traditional mainstay of the economy, brought in $3.7 billion.

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