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China Raises Lending Rate to Cool Growth

In a surprise move, China raised its key interest rate and the country's largest offshore oil explorer has posted record first quarter financial results.

China's central bank raised its benchmark one-year lending rate by 27 basis points to 5.85 percent.

China's first interest rate increase in 18 months is seen as an attempt to cool a boom in investment and credit growth. China's economy grew by more than 10 percent in the first quarter, raising worries about overheating, which could spark inflation and other problems.

The central bank's benchmark one-year deposit rate remains unchanged at two-and-a-quarter percent.

China's largest offshore oil explorer, CNOOC, says its total revenue for the first quarter to March rose 45 percent from a year earlier, to more than $2 billion.

CNOOC's chief financial officer Yang Hua says the company's earnings benefited from the soaring price of oil. The company achieved an average oil price of more than $58 a barrel, a 39 percent increase from a year earlier.

Yang says earnings were also boosted by stable production growth in the first quarter.

"Our total production in Q-one [first quarter of the year] increased by nine and a half percent year over year, mainly due to strong production growth in Bohai Bay," said Yang. "Offshore China, our oil and gas production increased approximately 11 percent year over year."

Seven Asian mobile phone operators have formed an alliance to enhance their international roaming and corporate mobile services. The group, tentatively called the Asia-Pacific Mobile Alliance, has a combined customer base of about 100 million subscribers in eight countries. It will allow the customers of each member to use the mobile networks of other members when they travel in the region.

The alliance includes Hong Kong's Hutchison Telecom, Singapore's Starhub, Indosat of Indonesia as well as wireless companies from Japan, Taiwan, South Korea and India.

The service is to begin in the second half of this year.

The chairman of South Korea's biggest carmaker, Hyundai, has been arrested on corruption charges. Chung Mong-koo is suspected of embezzling more than $100 million of the company's money to create a slush fund used to bribe politicians.

Prosecutors also plan to indict his son Chung Eui-sun, the president of Hyundai's affiliate Kia Motors, for his involvement in the slush fund scandal.