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Chinese Auto Maker to Assemble, Sell Cars in Malaysia

A Chinese automaker will assemble cars in Malaysia, while the restructuring of Malaysia's aviation sector is ending the monopoly of the nation's flag carrier.

China's Geely Automobile says it will assemble cars in Malaysia, in partnership with Malaysia's Information Gateway Corporation. The production of two Geely-branded auto types, built with Chinese-made components, will start in July.

Geely will export 80 percent of the cars, while the rest will be sold in Malaysia.

Grace Mak, an analyst with Merrill Lynch in Hong Kong, says the company is mainly targeting Southeast Asian countries. The region is a new export market for Chinese automakers, who are increasingly looking to sell their cars abroad.

"Some are exporting to Russia now, to the Middle East, to South Africa - so there are different markets. But to Chinese companies, I think the Asian countries are still quite new to them as an export region," said Mak.

In other news from Malaysia, the country's flag carrier, Malaysia Airlines, announced it will lay off almost a third of its workforce, reduce its aircraft fleet by half, and hand over most of its domestic routes to rival AirAsia, Southeast Asia's biggest budget airline.

The measures are part of the radical turnaround plan Malaysia Airlines presented last month. It aims at making the airline profitable again by 2007.

Under the plan, the national airline will also lose its government subsidies. The restructuring ends almost six decades of near-monopoly by Malaysia Airlines.

And Hong Kong's PCCW - the territory's largest fixed-line telephone operator - reported its net profit rose a weaker-than-expected 2.5 percent, to $204 million, last year.

While the group's core fixed-line business continued to grow in 2005, other units posted a decline in both turnover and operating profit. The biggest losers were PCCW's property and information technology units.

Australia's Transpacific Group will take over Waste Management New Zealand Corporation for more than $530 million. The merger will create the largest waste management company in Australia and New Zealand.