China has signed a landmark free trade deal with New Zealand, and Cambodia will launch a national airline in cooperation with an Indonesian conglomerate. Claudia Blume in Hong Kong has more on these and other stories in our weekly summary of business news from the region.
China's free-trade pact with New Zealand is the first Beijing has signed with a developed country. New Zealand agreed to eliminate all tariffs on Chinese goods by 2016. About one third of New Zealand's exports to China will become duty-free later this year. New Zealand's trade minister Phil Goff says that by 2019, almost all of the country's exports to China will be tariff free.
"What that represents to New Zealand exporters is a saving, when fully implemented, each year of round about $115 million," he said. "But most importantly, with the removal of both tariffs and other barriers it is estimated that New Zealand trade will increase by about $225 to $350 million a year, each year and every year for the next 20 years."
China is New Zealand's third-largest trading partner. Trade between the two countries is currently about $6 billion a year.
Cambodia's government has set up a joint venture with Indonesia's Rajawali group to develop a new national airline serving the country's growing tourism industry. The Cambodian government will own 51 percent of the new company.
Tourism is an important source of foreign exchange for the impoverished country. According to the Ministry of Tourism, two million tourists visited Cambodia in 2007, an increase of 18 percent from a year earlier. More than 60 percent of them arrived by plane.
Malaysia's palm oil board expects that strong global demand for the commodity will push export earnings in 2008 to almost $16 billion. Last year, the export revenue of Malaysia's palm oil industry went up 42 percent compared with a year earlier, to $14 billion.
The average price of raw palm oil increased almost 70 percent in 2007. China is the biggest importer of Malaysian palm oil products, accounting for almost a third of all exports.
And South Korea's POSCO, the world's fourth largest steelmaker, has raised steel prices by more than 20 percent. The increase follows record-high costs for iron ore and other raw materials which have eroded the company's earnings. In February, POSCO agreed to pay 65 percent more for iron ore from its Brazilian supplier.