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Asia Business: The Week Ahead - 2002-09-02

Hong Kong's two airlines are looking to fly new routes in Asia and major Japanese car manufacturer Toyota announced a deal with First Auto Works in Mainland China.

Following in the footsteps of its European and American rivals, Japanese car manufacture Toyota looks set to start a full fledged business in China - the fastest growing car market in the world. Toyota announced its agreement with First Auto Works, a leading Chinese Car Manufacturer on Thursday. Under the tie up Toyota will construct a new plant in Tianjin to produce 50-thousand units annually of a luxury sedan beginning in 2005. Another nearby plant will manufacture about 100-thousand subcompact cars and up to 20-thousand sport utility vehicles as soon as next summer.

Speaking in Beijing, Toyota President Fujio Cho says local auto production in China is one of the company's priorities right now. He says his aim is to get a 10 percent share in the Chinese market. That goal, he says, will likely be accomplished around 2010.

Honda is seeking to boost its manufacturing capacity in China and Nissan is in the midst of negotiating a deal with Chinese automaker Dongfeng Automobile.

In Hong Kong, just days after Cathay Pacific, the territory's largest air carrier, announced it intends to apply to fly three of the most lucrative routes into Mainland China, Hong Kong's second largest airline, Dragon Air, says it hopes to extend its reach to the rest of Asia. Although partly owned by top carrier Cathay Pacific, Dragon Air recently won rights to fly the Hong Kong to Taipei route putting it in direct competition with Cathay.

The move marks the end of Hong Kong's policy that only allowed one local airline to fly on any one route. Local media reported that Dragon Air wants to fly twice daily between Hong Kong and Manila, Bangkok and Seoul and is also considering Tokyo and Sydney.

In the media market, Hong Kong-based Phoenix Satellite Television hopes to start broadcasting in Taiwan early next year after Taipei reversed its decision not to grant the station a permanent license.

The change of heart comes only a week after Taiwan decided to lift its decades-old ban on advertisements for Mainland Chinese products, services and property.

Last year Phoenix had its preparatory license revoked by Taiwan's Information Office after rival stations complained that Phoenix's news programs were pro-Beijing. Phoenix eventually filed an appeal and Taiwan's Information Office determined it was not fair to punish the channel during its trial period.

Taiwan based satellite television networks like Asia Plus and Eastern Television are still waiting to broadcast on Mainland Chinese cable systems pending permission from Beijing.