China warns of worse to come for its economy

BEIJING (AFP) - - China's economy slowed further in November, the nation's top planner said Thursday, as he warned the government was being forced to act to avoid massive unemployment and social unrest.

Zhang Ping, the minister in charge of the National Development and Reform Commission, made the sombre remarks at a briefing explaining recent measures to trigger domestic consumption and lift economic growth.

"In November, a number of economic indicators are showing accelerated decline. The production at some enterprises has encountered difficulties, especially enterprises that focus on exports," he said.

Zhang was speaking a day after China announced a 108-basis-point interest rate cut -- the steepest in 11 years -- and a few weeks after an unprecedented four-trillion-yuan (590-billion-dollar) stimulus package.

With China's economy headed towards what could become its biggest crisis in two decades, observers said Zhang's remark was significant and a warning of bleak economic data for November, to be published in the coming weeks.

"Zhang certainly gets to see November figures earlier than the rest of us," said Ma Qing, a Beijing-based analyst with consultancy CEB Monitor Group.

October figures were already far from stellar, demonstrating just how vulnerable China was to the global financial meltdown.

In one example, China's industrial output grew by just 8.2 percent in October from a year earlier, a steep decline compared with 17.9 percent year-on-year growth in October 2007.

China's economy, the world's fourth-largest, expanded by 9.0 percent in the third quarter, the lowest level in more than five years.

The World Bank this week said it expected the Chinese economy to grow by 9.2 percent in 2008 before hitting a 19-year low of 7.5 percent in 2009.

Amid the slowdown, Zhang warned there would be more job losses and potentially a rise in social unrest across the nation of 1.3 billion people.

"Some companies have stopped all or part of their operations, and this will naturally have an impact on employment. In some areas we're seeing rural workers returning back home to the countryside," said Zhang.

He defended measures taken in the south of China to support struggling enterprises, with reports of local governments earmarking major funds aimed at keeping them in business.

"I think it's necessary. If too many enterprises suspend business or stop production, it will result in large-scale unemployment, and it could trigger social instability," he said.

Warnings have increased recently from senior Chinese policy-makers about the impact the global economic crisis will have on the domestic economy.

Last week, social security minister Yin Weimin said the employment situation was already "critical" and that the full fall-out from the crisis still remained to be seen.

In Chinese cities, there is a need for 24 million new jobs every year, but currently there is only capacity to create half that number, according to official estimates.

In an indication of the kind of unrest that might be in store for China, 500 workers stormed a toy factory in the south this week, smashing windows and computers, in protest over what they called meagre severance packages.

S.Korea to spend another $11 bln to boost economy

* South Korea to spend $11 billion to help economy
* GDP growth may fall to lowest in a decade without stimulus
* Export growth hits 13-month low as demand dries up

By Cheon Jong-woo

SEOUL, Nov 3 - South Korea said on Monday it plans to pump an extra $11 billion into its economy next year to help soften the impact of the global financial storm, which is beginning to hit exports -- the country's economic lifeblood.

The pledge coincided with news of lower-than-expected inflation, which analysts saw as possibly paving the way for another interest rate cut this week after last week's record 75 basis point cut to prop up Asia's fourth largest economy.

"The Bank of Korea will likely cut the rates further, at least by 25 basis points this Friday. If not, it may push the financial market into a tailspin again," said Park Jong-youn, fixed-income analyst at Woori Investment & Securities.

Lessons from 1929 stock crash

Oct. 24 - Analysts say investors had better beware false rallies like the one that occurred after the 1929 stock market crash.

The Dow rallied 24 percent over the next five months following the stock market crash, only to turn south again. Stocks fell 89 percent from their peak. Fred Katayama reports from New York.

SOUNDBITES:
# Philip Roth, chief technical market analyst, Miller Tabak
# Sam Stovall, chief investment strategist, Standard & Poor's

Singapore Exchange and Bahrain Stock Exchange sign MOU to foster closer relationship

Singapore and Manama, Bahrain, 14 October 2008 – Singapore Exchange Limited (SGX) and Bahrain Stock Exchange are pleased to announce that they have signed a Memorandum of Understanding (MOU) today to collaborate for the benefit of the financial services industries in Singapore and Bahrain.

The MOU aims to foster a closer relationship and develop channels of information exchange in the areas of operations, regulatory framework, and the equities products traded on the respective markets.

The MOU was signed by Mr Fouad Rashid, Director of Bahrain Stock Exchange, and Mr Gan Seow Ann, Senior Executive Vice President and Head of Markets at SGX.

Mr Hsieh Fu Hua, Chief Executive Officer of SGX said, "As the Asian Gateway exchange, SGX looks forward to working with our Bahraini counterparts to grow and strengthen our leadership positions in our respective geographies."

Mr Fouad Rashid, Director of Bahrain Stock Exchange commented, "We are delighted to have signed an MOU with Singapore as a key exchange in the Asia Pacific region. We are looking forward to a close working relationship and to exchanging knowledge and expertise, to our mutual benefit. We anticipate that the MOU will lead to increased capital flows between Bahrain and Singapore as leading financial markets in their respective regions."