The top news this week was that developing Asian economies will register solid economic growth in 2007, driven by fast growth in the People’s Republic of China (PRC) and India, the Asian Development Bank (ADB) says in a new major report.

The PRC and India, which together account for 55.3% of the total gross domestic product (GDP) in developing Asia, recorded their fastest growth in 13 years in the first half of 2007 and 18 years in fiscal year 2006, respectively.

The other big news story was the grovelling public apology made on Friday to China by Matel Inc. for damage to the country's reputation stemming from a spate of toy recalls. It was according to the Wall Street Journal Asia an extraordinary attempt to placate Mattel's most important supplier, but it is likely to shift the spotlight to the company's own responsibility in the crisis.

In its apology, the world's largest toy maker said its own "design flaw" was responsible for the biggest recall by far, involving around 18 million playsets studded with potentially dangerous magnets.

"Our reputation has been damaged lately by these recalls," Thomas Debrowski, Mattel's executive vice president of worldwide operations, told China's quality watchdog chief, Li Changjiang.

"Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people and all of our customers who received the toys."

He said he realized the damage that had been done to the reputation of Chinese goods.

"But it's important for everyone to understand that the vast majority of those products that we recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in Chinese manufacturers."

Also on Friday, the US Consumer Product Safety Commission and a US company announced the voluntary recall of about one million cribs/cots due to suffocation dangers.

The cribs are made by Simplicity for Children Inc., a Pennsylvania manufacturer of infant bedding and other products. The cribs were manufactured in China.

The CPSC said it is aware of two deaths in the cribs with older-style hardware, including a 9-month-old child and a 6-month-old child, where the "drop-side" of the crib was installed upside down. A 1-year-old child died in a newer model of the cribs, which has not been recalled but is being investigated by the safety agency, CPSC officials said.

CPSC spokesman Ed Kang would not comment on when or where the children died. Simplicity spokesman Joe Householder said the company will not release further details about the deaths out of respect for the families.

In all three deaths, the consumer had installed the drop-rail side of the crib upside down, the CPSC said. This creates a gap in the crib that children can slide into and suffocate. CPSC also said it was aware of seven infant entrapments and 55 incidents in these cribs. (See the CPSC announcement and photos.)

Multinational-Corporation (MNC) PC brands have overtaken the local Indian PC brands in terms of sales, growth rates and marketing activities, says Gartner Inc. Indian branded vendors like HCL, Zenith, Wipro and PCS account for only 14% of the Indian desk-based PC market and six percent of the Indian mobile-PC market in 1H07. According to Gartner, only HCL has withstood the competition. However, even they are losing out to MNCs in the consumer segment.

The Indian PC landscape is divided among three different groups: MNCs, local brands and white box vendors. In the past few years, although local brands are growing at a steady pace, they are clearly way behind the growth rates of the MNC brands. Indian vendors' shipments grew 18% year over year in 2006 and 35% year over year in 2005, while MNC shipments grew 73% in 2006 and 50% in 2005. This disparity gets even more accentuated considering that in 2004, local and MNC brands were growing at roughly the same rates.

“Unable to withstand the pressure of the marketing blitz and the reach of the MNC brands, the local brands have almost exited the consumer segment and are rethinking their strategy to focus more on government, education, and small and midsize business (SMB) segments”, said Diptarup Chakraborti, principal research analyst for Gartner’s client computing group. “Moreover, the mobile-PC segment in India, which has been growing at 74% year on year, has seen little traction by local brands. MNC brands are dominating this niche yet high margin segment with 94% per cent of the market share.”

Top 5 PC vendors in India - desk-based and mobile PC segments (based on shipments), 1H07

The Financial Times reported that a US government department has been forced to eat humble pie for apparently advising its 67,000 employees to buy Japanese or South Korean cars.

The climbdown by the US Department of Health and Human Services demonstrated the clout still wielded by Detroit’s embattled carmakers in spite of their recent failure to block the passage of tighter fuel economy rules in the Senate.

The advice that staff seeking to cut back on fuel costs would be better off buying a Toyota, Honda or Nissan than a Chevrolet, Ford or Dodge came in a departmental newsletter devoted to “energy efficiency behind the wheel”. Apart from an explanation of the technicalities of hybrid petrol-electric cars, the newsletter included a list of the top 12 “green” cars compiled by the American Council for an Energy Efficient Economy.

All 12 are Japanese and South Korean models. They include the top-selling Toyota Prius hybrid, the small Toyota Yaris, Honda Fit and Hyundai Accent, and hybrid versions of the Honda Civic, Toyota Camry and Nissan Altima.

Detroit complained vehemently not least because General Motors, Ford Motor and Chrysler have been strenuously attempting to prove their green credentials in recent months.

FINFACTS REPORTS THIS WEEK RELATED TO ASIA-PACIFIC

Asian Development Bank upgrades Developing Asia's 2007 growth forecast to 8.3%
Developing Asian economies will register solid economic growth in 2007, driven by fast growth in the People’s Republic of China (PRC) and India, the Asian Development Bank (ADB) says in a new major report.

Chinese government announces freeze on prices which it controls, for rest of year
The Chinese government on Wednesday announced a freeze on prices, which it controls - in such areas as  land, transport, utilities and fuel - for the rest of the year, in the latest signal of its concern about rising prices.

Bank of Japan keeps key interest rate at 0.50% - says Japan's economy is expanding moderately
The Bank of Japan kept its key interest rate unchanged at 0.50% as expected on Wednesday, less than twelve hours after the US Federal Reserve cut its key rate by 0.50% to 4.75%.

Historic Asian Silk Road trade route to be rebuilt
China and seven countries in central Asia have reached a preliminary agreement to build a $19.2bn (€13.7bn) modern equivalent of the “Silk Road” trade route between China and Europe.  

ACCESS TO NEW REPORTS FROM OTHER SOURCES

Friday

Asian Stocks Climb This Week After Federal Reserve Lowers Interest Rates Asian stocks rose this week after the U.S. Federal Reserve cut its benchmark lending rate by half a percentage point to bolster growth in the world's largest economy.

Cribs Recalled on Deaths; Mattel Apologizes to China - - The maker of Graco and Simplicity cribs recalled 1 million Chinese-made cribs with design flaws after three children died, while Mattel Inc., the world's largest toymaker, apologized to China and took the blame for design problems in its toys.

India's Vegetable Oil Imports May Rise, Boosting Palm Oil Price - - India, the world's second-biggest buyer of vegetable oils, may import more of the commodity as some farmers lower acreage for mustard and other oilseeds to grow more wheat. Imports may rise 9 percent to 6 million metric tons in the crop year starting Nov. 1, Dorab Mistry, a director with Godrej International Ltd., said at an industry conference in Goa. Mistry has traded  vegetable oils since 1976.

China Is in Bind to Raise Energy Prices - - China's liberalization of energy prices may be one casualty of the government's struggle to contain inflation.

NEC Is Unable to File Reports - - NEC said it would be unable to file financial reports required by U.S. regulators, raising the likelihood the Japanese electronics maker's Nasdaq-traded American depositary receipts will be de-listed.

Japan's 10-Year Bonds Have Biggest Weekly Slide in More Than Three Months Japanese government bonds completed their biggest weekly slide in more than three months on speculation investors will demand higher yields to compensate for the risk that global inflation will pick up.

Indonesian Rupiah, Peso Lead Gains in Asia as Fed Rate Cuts Boost Appeal The Indonesian rupiah and Philippine peso led gains in Asia this week as a cut in U.S. interest rates eased concern the global economy will slow, boosting demand for riskier assets.

India to Decide Next Month If It Needs to Import More Wheat, Official Says India, the world's third-biggest importer of wheat last year, will decide next month if the South Asian nation needs to buy more grain from overseas, a government official said.

Indian cell phone subscribers pass 200 million mark - - The number of Indian mobile phone subscribers has passed the 200 million mark after the country added another eight million customers last month, industry figures show.

India's foreign exchange reserves rose to a record $232.187 billion  - - on Sept. 14, from $230.377 billion a week earlier, the Reserve Bank of India said in its weekly statistical supplement on Friday.

‘I have zero tolerance for people who are arrogant’ - - Entrepreneurship and innovation is not the way to go for India. It is the only way,” says Saurabh Srivastava. He is talking from experience. ...

Wednesday/Thursday

BOJ leaves key interest rate unchanged - - Decision heavily influenced by Fed's rate cut, global market uncertainties

Sony's Plan to Cut PS3 Costs - - By letting Toshiba make the game console's chip, Sony can focus on core operations—and boosting PlayStation sales

Topix Falls, Led by Aiful, Consumer Lenders, Chipmakers; Steelmakers Gain  - - Japan's Topix index fell, paced by consumer lenders including Aiful Corp., on speculation expanding credit expenses will hurt their earnings.

Dollar Near Record Low Versus Euro Before Fed Chairman Bernanke Testifies  - - The dollar traded within a half- cent of its record low versus the euro before Federal Reserve Chairman Ben S. Bernanke's congressional testimony on the mortgage market and economic growth.

Skymark Rebound Spurs Prospect of 35 Percent Gain From JAL, ANA Passengers  - - Skymark Airlines Inc., Japan's largest discount carrier, came back from two years of losses by doing something the country's biggest airlines have failed to do: win new domestic customers and the prospect of at least a 35 percent gain for shareholders.

Toyota, Honda, Japan Carmakers to Unveil 37 New Models at Tokyo Motor Show  - - Toyota Motor Corp., Honda Motor Co. and other automakers will unveil a total of 37 car models at the Tokyo Motor Show, aiming to stem drop in sales in the world's third-largest auto market.

Manufacturers Are Optimistic, Signaling Tankan Confidence May Not Worsen  - - Japan's manufacturers are confident the economy will recover from last quarter's contraction, a government survey showed.

What Next for Microsoft in China? - - With China honcho Tim Chen's fast break to the NBA, Microsoft is caught off guard. Chen's successor must keep the momentum going on the mainland

Chinese economy full steam ahead - - China has registered a solid growth track since 2003, and its economy has expanded quickly and in a stable manner, the National Bureau of Statistics (NBS) said yesterday.

S&P: Top firms on Chinese mainland may feel pinch - - Negative real interest rates and the risk of a U.S. slowdown are likely to affect the Chinese mainland's top earners in the next 18 months, according to Standard & Poor's Ratings Services.

Bosideng May Raise $838 Million in Hong Kong Public Offering, People Say  - - Bosideng International, which owns China's top-selling down-clothing brand, may raise as much as HK$6.53 billion ($838 million) from a Hong Kong initial public offering, three people with direct knowledge of the sale said.

U.S. Treasury's McCormick Urges China to Improve `Flexibility' of the Yuan  - - U.S. Treasury Secretary Henry Paulson's top international adviser called on China to let the yuan trade more freely, a sign the Bush administration considers a 10 percent appreciation in the past two years insufficient.

China Telecom Loses Subscribers on Increased Competition With China Mobile  - - China Telecom Corp., the nation's biggest fixed-line telephone carrier, reported its first decline in subscribers after users defected to wireless carrier China Mobile Ltd.

Dongxiang, Kappa Sportswear Marketer, Plans $700 Million IPO, E-mail Says  - - China Dongxiang (Group) Co., owner of Chinese rights to the Kappa sportswear brand, will raise as much as HK$5.47 billion ($703 million) in a Hong Kong initial public offering.

PetroChina Vice President Liu Says Oil May Fall by as Much as 25 Percent  - - PetroChina Co., the country's largest oil company, expects the price of oil to drop by as much as 25 percent to ``between $60 and $70 a barrel,'' according to the company's vice president.

Corporate India's M&A average: 2 deals a day - - India Inc continued with its M&A frenzy in August striking an average of two deals per day, a marginal increase over the previous month's deal numbers but over three-fold jump in value terms.

Oracle launches 11g software in India - - Global database software major Oracle launched its latest software '11g' in India which would be implemented by partners including HCL Technologies, Infosys, Satyam, TCS and Wipro Ltd at the customer-end.

Indian Rupee Surges Past 40 Per Dollar as Fed Rate Cut Spurs Stock Rally  - - India's rupee climbed beyond 40 per dollar for the first time in nine years, as lower interest rates in the U.S. prompted global funds to seek higher returns in the world's second-fastest growing major economy.

Posco Receives $350 Million Order to Build India's Biggest Blast Furnace  - - Posco, Asia's third-largest steelmaker, received a $350 million order to build India's biggest blast furnace.

Asian Stocks Rise to Seven-Week High on Metals, Oil Prices; BHP Advances  - - Asian stocks rose to a seven-week high as a jump in metals prices and crude oil trading near a record boosted the value of commodity producers.

Oil Trades Close to Record High as U.S. Supplies Drop, Winter Demand Looms  - - Crude oil traded near a record close in New York on concern storms and declining imports may reduce U.S. supplies before demand peaks in the fourth quarter.

Dollar Near Record Low Versus Euro Before Fed Chairman Bernanke Testifies  - - The dollar traded near a record low against the euro before Federal Reserve Chairman Ben S. Bernanke's congressional testimony on the mortgage market.

Tuesday

Construction Bank's Shanghai Stock Offer Raises $7.7 Billion, People Say  - - China Construction Bank Corp. raised 58 billion yuan ($7.7 billion) in the world's second-biggest share sale this year, three people with direct knowledge of the matter said.

Boeing Raises 20-Year Forecast of China's Orders for New Commercial Planes  - - Boeing Co., the biggest supplier of airplanes to China, raised its 20-year market forecast for the country by 21 percent as Chinese air travel expands at the fastest pace worldwide.

China May Delay Approving Local Government Projects to Cool Economy's Pace  - - China will delay approval of some local government investment projects in its fastest growing regions to cool the economy and reduce the risk of overheating.

Goldman Sachs, Lehman Get Reduced Fees for Taiwan Bank Merger, People Say  - - Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. are getting less than half the minimum fees typically charged for arranging a $3 billion Taiwan banking merger, three people familiar with the terms of the deal said.

China Aoyuan, Developer, May Raise HK$3.64 Billion in IPO, E-Mail Says  - - China Aoyuan Property Group, a southern China developer, is seeking as much as HK$3.64 billion ($467 million) through a Hong Kong initial public share sale, according to an e-mail sent to international institutions today.

Selling Cisco to China's Tech Talent Pool - - With more and more multinationals opening offices and luring local talent, Jan Gronski's task at the company's Shanghai R&D center is getting tougher

Lenovo: Packard Bell Not the End-All - - The Chinese PC maker still wants to acquire the Netherlands company, but the hoped-for deal "is not a single-point strategy," says a Lenovo exec

China's Brilliance: Back from Disaster? - - BMW's Chinese partner, aiming to compete in Europe and the U.S., could rebound from devastating safety tests faster than anyone expects

China steel mills may face ore freight slug - - AUSTRALIA'S iron ore giants are considering charging Chinese steel makers a premium to take account of differences in shipping costs, on top of huge expected price increases, as the annual contractual "mating dance" begins.

Asia's Tech Concerns Aim to Stay Nimble - - As the global business environment presents new challenges, Chinese and Indian tech companies are reassessing their goals and strategies

Intel's Barrett Has a Vision for India - - The chipmaker chairman is teaming up with the U.N. and the Indian government to bring WiMAX connectivity to rural hospitals and schools

Vogue Hits Indian Newsstands - - The beauty bible is late to India's fashion party, where global magazines Cosmopolitan and Elle and local player Verve arrived a decade ago

DLF's Chairman K.P. Singh Seeks Cut in Interest Rates as Home Demand Drops  - - Billionaire Kushal Pal Singh, chairman of India's biggest property developer by market value DLF Ltd., said the central bank should reduce interest rates from a five-year high because of falling demand for homes.

India's Oilseeds Output May Exceed Target, Reducing Cooking Oil Imports  - - India's oilseed harvest may exceed government target this year, likely reducing imports of cooking oils that helped palm oil surge to a record.

India May Be Major Exporter of Raw Sugar Next Year, Adding to Oversupply  - - India, set to surpass Brazil as the world's biggest sugar producer, plans to increase exports next year and may ship as much as half of the sweetener in its raw form, the president of the Indian Sugar Mills Association said.

Pakistan Prepares to Invite Bids for Supplying 1 Million Tons of Wheat  - - Trading Corp. of Pakistan, the nation's biggest state-owned buyer of commodities, is preparing to invite bids for 1 million tons of wheat to increase the South Asian nation's stockpiles.

Stocks in India Rise Most in More Than Week; ICICI, Bharti Airtel Advance  - - Indian stocks rose the most in more than a week after Deutsche Bank AG predicted shares in domestic- driven economies will be in demand in the coming year.

India expects 8.5-9.0% growth in 07/08 - - India's economy is likely to grow by between 8.5-9.0 percent in the fiscal year ending March 2008, and while there would be some moderation in growth from a year earlier there would be no slowdown, a top government official said on Tuesday.

Growing pains dim India's outsourcing edge - - Indian outsourcing companies are shifting some of their operations to China, the Philippines, Vietnam and Kenya in a bid to stay competitive as higher wages, expensive property prices and a rising rupee eat into profits.

U.S. Dollar Declines Against Euro Before Fed's Decision on Interest Rates  - - The dollar fell to within a half- cent of a record low against the euro as investors expect the Federal Reserve to cut interest rates today for the first time in four years.

Demand for Services Dropped in July on Typhoon Weather, Slump in Wages  - - Demand for services in Japan fell in July as typhoons and declining wages kept shoppers away from stores and amusement parks.

Shares Slide on Credit Concern, Led by Banks; Topix Falls Most in a Month  - - Japanese stocks dropped, with the Nikkei 225 Stock Average falling the most in more than two weeks, after withdrawals from U.K. bank Northern Rock Plc reignited fears that a credit crisis will slow the global economy.

Sony Reduces Size of Financial Unit's Initial Share Sale to $2.8 Billion  - - Sony Corp. scaled back the proposed size of its insurance unit's initial public offering, the biggest in Japan this year, after U.S. subprime mortgage defaults roiled global financial stocks.

Wal-Mart's Japanese Unit Seiyu Widens Loss Forecast, Plans to Cut 450 Jobs  - - Seiyu Ltd., the Japan unit of Wal- Mart Stores Inc., widened its forecast loss for the full year on costs to cut jobs, its second downgrade in five weeks.

Monday

Toshiba may buy Sony chip plant - - Sony Corp. is in talks with Toshiba Corp. to sell it a chip-production facility for game consoles as early as next spring for nearly ¥100 billion, informed sources said Saturday.

ADB raises Asia growth forecast to 8.3% - - Asia's developing economies, the fastest-growing countries in the world, will expand much more than expected this year, but credit problems in the West may take a toll in 2008, the Asian Development Bank (ADB) said on Monday.

China to add 27 new air routes to Europe, America - - China's civil aviation authority said it has approved 27 new international routes to Europe and America.

China's cellphone users exceeds 600 million - - China has more than 600 million mobile phones users by June this year, which means every one in five mobile phone users is Chinese, an senior official said on Sunday.

Soho China May Raise $1.65 Billion in Revived Initial Offering, People Say  - - Soho China Ltd., the largest developer in Beijing's central business district, plans to raise as much as HK$12.9 billion ($1.65 billion) in an initial share sale, two people with direct knowledge of the deal said.

China Sells 32 Billion Yuan of Bonds to Public to Set Up Reserves Company  - - China's government sold 32 billion yuan ($4.3 billion) in 15-year bonds to help fund a new reserves management agency, raising money from the public for the plan for the first time.

Sino, Nan Fung Development, Lead Group Buying $584 Million Hong Kong Site  - - Sino Land Co. and Nan Fung Development Ltd. led a group of builders that made the better- than-expected winning bid of HK$4.55 billion ($584 million) for a residential site in Hong Kong's Tai Po district.

China Rejects U.S., Canada Pork Shipment After Finding Additives, FT Says  - - China rejected consignments of pork from the U.S. and Canada because they contained a banned additive, even as a domestic shortage of the meat pushed the inflation rate to a 10-year high in August, the Financial Times said.

China's Hidili Raises $526 Million in Hong Kong Initial Public Offering  - - Hidili Industry International Development Ltd. raised HK$4.1 billion ($526 million) in the largest initial public offering by a Chinese coal company this year, two people with direct knowledge of the matter said.

Blackstone, GE, Wilbur Ross Among 10 Groups That May Bid for India's IFCI  - - Blackstone Group LP, manager of the world's biggest buyout fund, General Electric Capital Corp. and a group led by billionaire Wilbur Ross are among investors that may bid for 26 percent of India's oldest project financier IFCI Ltd.

ADB Raises Asia Growth Forecasts; Region to Withstand Credit Market Rout  - - Asia's developing economies will expand faster than earlier estimated in 2007 and 2008, and are well placed to weather any U.S. slowdown and turmoil in global credit markets, the Asian Development Bank said.

Bombay Stock Exchange Benchmark Index Drops, Led by Infosys Technologies  - - The Bombay Stock Exchange's key Sensitive Index fell, led by Infosys Technologies Ltd.

Rupee Declines Most in Almost 2 Weeks; Speculation Overseas Investors Sold  - - India's rupee fell as the biggest loss in local stocks in four weeks stoked concern overseas funds may take money out of the country.

Government Bonds May Advance as Reserve Bank Refrains From Draining Cash  - - India's government bonds may gain after the central bank refrained from selling longer-maturity debt to drain surplus cash from the banking system.

Dollar Trades Near Record Low Versus Euro Before Fed Interest-Rate Meeting  - - The dollar traded within a cent of its record low against the euro and reached its lowest in more than 30 years versus Canada's currency on speculation the Federal Reserve will lower its benchmark interest rate tomorrow.

Asian Stocks Fall for First Time in Five Days; Samsung, BHP Billiton Drop  - - Asian stocks dropped for the first time in five days after the U.S. Justice Department began investigating makers of flash-memory chips and falling crude prices drove down oil producers.

Japanese Bonds Complete Weekly Gain on Concern Economic Growth Will Slow  - - Japan's 10-year bonds completed the biggest weekly gain in a month as speculation global economic growth will slow boosted demand for the relative safety of government debt.

Japan Corporate Bailouts Will Fall as Foreign Ownership Rises, Fitch Says  - - Japanese companies will become less likely to be rescued by their dominant corporate shareholders, banks or the government as foreign ownership increases, according to Fitch Ratings.

Samsung Electronics Shares Fall After U.S. Antitrust Flash Memory Probe  - - Samsung Electronics Co., the world's second-largest maker of semiconductors, fell on Seoul's stock exchange after the U.S. Justice Department began investigating makers of flash memory chips over possible antitrust violations.