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Cathay Pacific Takes Over Rival Dragonair


Australia's economy has picked up in the first quarter and Hong Kong airline Cathay Pacific has taken over the smaller Dragonair.

The Australian economy grew by almost one percent in the first three months of the year compared with the previous quarter. Rising consumer spending, private business investment and government expenditure were the main drivers behind the stronger-than-expected growth.

Treasurer Peter Costello says the economy picked up despite a drop in investments in the housing market.

"Growth is being led by a very strong business investment. Household consumption continues, but at moderate levels, and dwelling investment is actually subtracting from growth," he said.

Hong Kong's Cathay Pacific will buy smaller local airline Dragonair for more than one billion dollars and cement ties with Air China, a leading carrier in mainland China. The deals will give Cathay greater access to China's booming aviation market.

Cathay Pacific and Air China will restructure their existing shareholding structures and enter into an operating agreement. The agreement includes the extension of code sharing on flights between Hong Kong and mainland China and the implementation of joint venture routes, operated on a profit-sharing agreement.

The deal is expected to make the airlines more competitive and boost Hong Kong and Beijing as major aviation hubs in Asia.

A Chinese court upheld the patent of U.S. drug giant Pfizer for the anti-impotence pill Viagra, overturning a previous decision.

In 2004, China's patent review board sided with a group of Chinese generic-drug makers who challenged Pfizer's patent on the main ingredient (sildenafil citrate) in its blockbuster drug.

Pfizer introduced the pill in China six years ago, but a few months later state media reported that most Viagra pills on the market were counterfeit. Illegal copying of products such as drugs, software and luxury apparel is a significant problem in China and its trading allies, including the United States and the European Union, have pushed Beijing to strengthen its enforcement of copyright protections.

The Bank of Korea unexpectedly raised its benchmark interest rate by a quarter percentage point to a three-year high of four and a quarter percent.

The fourth rise in the key rate since October reflected the state bank's confidence that South Korea's economic growth will not be hampered by steep oil prices and a strong won, the country's currency.

The Bank of Korea forecast the economy will grow five percent this year, compared with a slower four percent in 2005.