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Hong Kong's Jobless Hits 28-Month Low - 2004-07-26

The unemployment rate in Hong Kong has dipped to a 28-month low, while China faces grain shortages.

Hong Kong's unemployment rate fell to just under seven percent for April to June, the lowest in 28 months. It is down from a record of nearly nine percent a year ago, when the economy slumped during the outbreak of Severe Acute Respiratory Syndrome.

For the March to May period, the jobless rate was seven percent.

Eddie Wong, an economist in Hong Kong at the investment bank ABN Amro, says the job situation will improve, but there are still short-term challenges ahead. "There's some short-term uncertainty like the U.S. economy is now peaking, Chinese economy is peaking," he says. "If you take twelve months view I think the rate will still come down." Economists warn that an influx of fresh graduates means the unemployment rate is not likely to fall much over the next few months.

China may face a grain deficit of nearly 40 million tons this year, despite meeting production targets. Last year's production was significantly lower than consumption, prompting a dramatic rise in imports. China's shrinking farmlands, falling water levels and rising population have led some grain experts to conclude that the country will be a major food importer in the coming years.

American movie giant Warner Brothers has struck a deal with the Chinese film company Guangzhou Jinyi Film and Television Investment to open 10 theaters in several Chinese cities. This is Warner Brothers' fourth deal in China in a little over a year, as it cashes in on the country's growing appetite for foreign films.

In South Korea, thousands of employees of its subway system and unionized workers at leading car maker GM Daewoo Auto and Technology went on strike, demanding higher wages. Subways continued running because non-union employees were brought in, and soldiers were on hand to help.

Earlier in the week, workers at South Korea's largest oil refiner LG Caltex also went on strike.

South Korea traditionally experiences a rise of labor unrest in the summer, but recent strikes come at a sensitive time, with the domestic economy sluggish despite booming exports.