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China Hikes Fuel Price to Support Refineries


China has increased fuel prices for the second time this year to support domestic refineries and Beijing has given the nod to establish a new bank in the country. Claudia Blume at VOA's Asia News Center in Hong Kong has more on these and other stories in our weekly look at business news from the region.

China Increases Fuel Prices

The Chinese government hiked fuel prices by more than 10 percent last week. It was the second increase this year as Beijing tries to narrow the gap between domestic and global fuel prices. Chinese oil product prices remain more than 20 percent below international levels.

The move is intended to stem losses of China's two massive oil refiners, Sinopec and PetroChina.

But analysts say the hikes are not enough to make the companies profitable again.

Gideon Lo, power and oil analyst at DBS Bank in Hong Kong, predicts Beijing is not likely to raise fuel prices again this year because the burden on local industries and consumers would be too high.

"I still believe the Chinese government may be very prudent to adjust domestic fuel price upwards unless there is a tremendous increase in the crude oil cost in the second half," Lo said. "Both for the customers and the end users of fuel energy in China, their affordability for the high fuel price seems to be relatively limited."

Postal Savings System Transformed Into Bank

In other news from China, Beijing has approved a plan to transform the existing postal savings system into a bank. The China Postal Savings Bank will be the country's fifth biggest lender.

China started saving services in post offices around the country in 1986. By the end of 2005, the savings service had a deposit balance of about $160 billion (US).

Las Vegas Sands to Open Casino in Singapore

U.S. casino operator Las Vegas Sands has successfully bid for Singapore's first casino license to develop the Marina Bay resort - a gambling, entertainment and convention complex near the city's financial district.

Last year, Singapore reversed its decades-old ban on casino gambling and announced it would build two casino complexes to boost tourism. The winner of the bid for the second project on Sentosa Island will be announced at the end of this year. Both resorts are due to open in 2009.

Wall-Mart Sells South Korea Stores to Local Rival

The U.S. retail giant Wal-Mart will sell its 16 stores in South Korea to local rival Shinsegae for $882 million. South Korea's leading discount chain has 79 stores throughout the country.

Wal-Mart is the second large foreign retailer to pull out of the country after French-based Carrefour sold its Korean operations a month ago.