Hong Kong and Singapore continue to feel the bite of SARS, while a South Korean consortium has won the right to market cell-phone service in Vietnam.

The Hong Kong government reports retail sales in May plunged more than 11 percent, compared with a year ago. That is a drop of about $1.7 billion. The overall volume of retail sales decreased by more than seven percent.

After mainland China, Hong Kong had the world's second worst outbreak of Severe Acute Respiratory Syndrome, or SARS. Fear of the contagious disease caused a massive plunge in tourism and retail sales in April and May.

As the city is trying to recover from SARS, there are concerns about recent massive protests against proposed anti-subversion laws. However, James Thompson, chairman of the American Chamber of Commerce in Hong Kong, says the controversy is not likely to scare international investors.

"Investors in Hong Kong - foreign investors - don't look at issues like this as their main basis for legislation," he says. "They look at the climate, this is a very business-friendly climate, we have low taxes, we have all the freedoms we could possibly ask for." Singapore, which also suffered a SARS outbreak, saw its economy contract by 4.3 percent in the second quarter, compared with a year ago.

Thai Prime Minister Thaksin Shinawatra says interest rates will remain low in his country, because of the high level of liquidity in the domestic financial system. Mr. Thaksin says the Thai banking system holds about $19 billion, due to capital inflows and the fact that many small and medium businesses are financing their operations internally.

South Korea cut its key interest rate this week by a quarter point, to 3.3 percent, to spur growth. The Bank of Korea also trimmed its forecast for this year's GDP growth to 3.1 percent. That is down from an earlier forecast of more than four percent.

South Korean consortium SLD Telecom has won final approval to operate a Code Division Multiple Access, or CDMA, service in Vietnam's mobile phone market. SLD is the first consortium to break a long-standing government monopoly. Mobile phone use in Vietnam is predicted to explode with a rise in personal incomes in coming years. Total subscribers are expected to reach 7 million by 2005.