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Asia Business: The Week in Review - 2003-12-15

China's rising food prices helped push the country's inflation rate up at the fastest pace in more than six years. And the Asian Development Bank forecasts stronger economic growth for many Asian nations.

China's National Bureau of Statistics says the consumer price index was three percent higher in November compared with the same month last year. The price of food rose eight percent.

Economists around the world have expressed concern that China's economy is overheating, with growth forecast to be over 10 percent this year. China's central government is taking steps to rein in what it termed as "irrational investment" by tightening controls on land development and lending. High inflation is considered a mark of over expansion.

Analysts say investors are eager to profit from China's booming economy by purchasing shares in Chinese companies on the Hong Kong stock market.

Huang Qi Yuan heads the Chinese company Bao Lai, which produces steel products. He says the current enthusiasm for Chinese shares looks similar to the surges in share prices in 1997 and 1999. Both times, the share prices later plunged.

Mr. Huang says that in the first half of the year interest in the stock market was very flat due to the SARS outbreak. But in the third and forth quarters investor confidence rebounded - just as it blindly surged in 1997 and 1999. He says the gains are beyond expectations.

The Asian Development Bank (ADB) says that Asia's developing economies are expected to post better than anticipated economic growth this year. The bank revised its average growth forecast for the region to five point seven percent for this year. Originally, it had forecast average growth of five point three percent.

The ADB raised forecasts for a number of countries. Thailand's economy in 2003 is expected to be six percent, up from the earlier prediction of five percent. The ADB, however, cut its growth forecast for South Korea to three point one percent, from the original forecast of four percent.

The U.S. food chain Pizza Hut has opened a restaurant in Dhaka, the company's first in Bangladesh.

The Bangladesh Pizza Hut franchise is being run by a subsidiary of Transcom Bangladesh, which owns a number of local newspapers and publications.