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eBay Plans to Take a Stake  of Chinese EachNet - 2002-03-18

A well-known U.S. website plans will take a stake in a Chinese counterpart while McDonald's loses ground in one of its largest Asian markets.

Online auctioneer eBay will buy a stake in China's leading Internet auction site called EachNet.

eBay, which is based in the U.S. state of California, says it will pay $30 million to acquire one third of the Shanghai firm, with an option to acquire the rest.

Some Shanghai analysts say the deal will provide eBay with a chance to build a business in one of Asia's most rapidly expanding Internet markets. However, they warn there will be challenges operating in an immature market.

Also in China, Prime Minister Zhu Rhongji has confirmed his government's seven-percent economic growth target for this year. He told reporters that the target figure was within reach. Mr. Zhu also defended the government's deficit spending policy, saying it will help lift the overall economy.

In South Korea, the government says it is moving ahead with a plan to privatize Korea Tobacco and Ginseng Corporation. Seoul, which owns one-third of the company, says it will put its stake on the auction block after April.

Analysts warn the plan could run into trouble. They say investors may avoid buying stock in the South Korean tobacco monopoly because of a nationwide campaign to discourage smoking which began earlier this year.

Japan's recession has taken a large bite out of business for fast-food company McDonald's. The company says it will close a record 130 stores in Japan this year. It will also slash the number of new outlets it had expected to open. The fast-food chain believes that the discovery of mad-cow disease in Japan last year has also hurt business.