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China Announces Big Increase in Industrial Output - 2003-08-18

China is flexing its industrial muscles, and Indonesia is seeking a more investor-friendly legal structure. China is celebrating some robust economic data this week. The government has announced that industrial output for the first seven months of the year rose more than 16 percent over the same period last year.

The National Bureau of Statistics says expansion in the computer and automotive sector fueled much of the growth. Computer production in the seven months to July leaped nearly 77 percent over last year, while auto production rose more than 42 percent.

China's international trade reached a monthly record in July of almost $75 billion. Economists say that kind of performance could increase international criticism that China is keeping the value of its currency, the yuan, too low.

In China's special administrative region of Hong Kong, however, the position of homeowners is continuing to deteriorate. According to the Hong Kong Monetary Authority, the number of homeowners who now owe the bank more than their property is worth rose by 28 percent in the April to June quarter.

The problem is that Hong Kong property values continue to fall. The number of mortgage-holders faced with such "negative equity" now stands at 106,000.

The territory's new financial secretary, Henry Tang, said he is taking a proactive approach to the problem.

Mr. Tang said he is making a personal request to Hong Kong's largest banks to ease the negative equity crisis by restructuring mortgage loans to provide residents with more favorable repayment terms.

Indonesia's Finance Ministry wants to make the country's legal system more investor-friendly. The Ministry is seeking to abolish more than 200 laws passed by regional authorities.

Many of these laws deal with taxes passed by local legislatures as part of a two-year-old nationwide decentralization program. Indonesia's Home Affairs Ministry will have the final say in deciding which laws to abolish.

The Singapore government says the city-state's economy during the second quarter of the year was a disaster.

Overall, the economy shrank 4.2 percent during the three-month period, the biggest one-quarter drop on record. The gross domestic product during the quarter dropped at an annualized rate of 11.5 percent. Singapore officials say the economy was strongly affected by the outbreak of Severe Acute Respiratory Syndrome, or SARS, and by the war in Iraq. They say both events weakened domestic demand and external trade.