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Asia Business: The Week in Review - 2004-03-08


A British bank named after two Chinese cities is crediting North America for a profit jump, and a Korean airline is spending serious money on an upgrade.

Global giant Hong Kong Shanghai Banking Corporation, or HSBC, celebrated a 33 percent increase in pretax profits, to $12.8 billion, for the year 2003.

The bank's executives in Hong Kong credit North American acquisitions for its profit surge, especially HSBC's takeover of U.S. consumer lender Household, and Mexico's Grupo Financial Bital.

In geographic terms, Hong Kong was knocked from second to third place as a source of the company's profits, according to chief executive Stephen Green. But he says he expects a better economic environment in Hong Kong in 2004. "Our business is well positioned to grow with the economy, having achieved remarkably consistent results over the last four years during a period of sustained deflation for Hong Kong's economy," he says.

Vietnam's economy is beginning to feel the negative effects of the recent bird flu outbreak. International arrivals to Vietnam in February plunged more than six percent from a year ago. Bird flu has killed at least 15 people in Vietnam.

The drop in arrivals coincides with Vietnam's new status as a destination for the world's seventh largest air carrier. Continental Airlines has also opened a sales office ahead of an expected code share agreement with Vietnam Airlines.

The U.S. airline says it wants to tap the market of ethnic Vietnamese traveling to and from the United States. The United States and Vietnam signed an agreement in August allowing the first direct flights between the two countries since the end of the Vietnam war in 1975.

Korean Air says it will invest $9 billion to buy new planes and improve in-flight service.

Korean Air executives say their goal is to make the company the world's largest airliner in terms of cargo transport by 2007 and one of the world's ten top passenger carriers by 2010.