Accessibility links

Breaking News

S. Korea Works Out Local-Currency Loan Deals with Japan, China

South Korea, Japan and China have signed agreements to allow their central banks to borrow money denominated in local currency from each other. Economists say the agreements will help the banks cover short-term cash needs during market shocks.

South Korea's deal with the Bank of Japan gives the two central banks access to $3 billion in short-term loans in either Korean won or Japanese yen. Seoul's deal with China creates access for both countries to loans of up to $4 billion in won or Chinese yuan.

Oh Suk-tae, a Citigroup economist, says the agreements are good first steps toward Asian economic integration. Mr. Oh says so-called currency swap agreements are easier to arrange than free trade agreements, which he says are a more important, but more politically difficult step.

Other economists say the agreements will encourage greater regional flows of capital denominated in Asian currencies, possibly reducing dependency on the U.S. dollar.

Chinese researchers are warning their government to slow down investment in the coal-mining industry. The China coal development research center says heavy investment in mines is causing a reduction in safety standards, leading to deadly accidents.

Last week alone, at least 45 workers were killed in a mine accident in Northern China's Hebei province. Researchers say many coal mines are going into business, without proper safety inspections.

Even with the rapid growth of the mining industry, Chinese authorities say the country may soon face a major coal shortage. Beijing's state administration of work and safety predicts coal production will fall at least 300-million tons short of China's estimated 2.2 billion-ton demand by the year 2010, when the state agency says power blackouts are likely to result in many parts of the country.

An Australian construction mogul may be wishing he never heard the word Wembley. John Roberts, executive chairman of Australia's Multiplex group, has resigned from the company he founded in 1962, after forecasting possibly tens-of-millions of dollars in losses on the restoration of London's famous Wembley Stadium.

Contractual disputes and rising costs for labor and materials have proved wrong previous expectations the project would break even. Mr. Roberts says his family is prepared to cover losses up to $38-million. Multiplex says it hopes to appoint a new independent director, who has more property experience in Britain.