China: Latest developments

by: Ezra Marbach

Here is the latest on the Chinese economy, currency, and news on public companies:

Hong Kong-based Hutchison
(ticker: HTX), an international provider of mobile and fixed-line telecommunications services announced Q4 and 2004 results today.

(ticker: MXO), a disk-drive maker, said that it plans to cut 5,500 jobs in Singapore as it shuts down one of its two plants there amid a shift to even lower-cost operations in China.

The Mozilla Foundation has established Mozilla China, an affiliate and non-profit organization that will help develop and promote open-source Mozilla software in China. Mozilla China is backed by the Chinese Academy of Sciences Institute of Software, and Sun Microsystems (ticker: SUNW). Mozilla China will be responsible for development of the Chinese version of the Mozilla Web site and discussion forums and will lead the development of Mozilla source code in China. Sun aims to play a major role in the development of Mozilla source code in China and has established a Mozilla browser development team in Beijing.

According to the WSJ (subscription required), China is targeting a sharp pullback in its investment growth this year, a trend that could hit a broad swath of the economy from tax collection to loan growth to personal incomes and imports. The government is targeting fixed-asset growth of 16%, still double the targeted growth rate for the overall economy but sharply lower than last year's fixed-asset growth of 26%. The sharply reduced target for investment shows how concerned the government remains that the rapidly growing economy could spin out of control and how serious Beijing is about preventing that from happening.

Chinese premier Wen didn't unveil any new policies on the yuan in his report on Saturday. But a small upward revaluation of the Chinese currency could help in Beijing's efforts to cool the economy, by making exports more expensive and reducing an influx of speculative investment that has surged into China. Some Chinese economists say now is the time to revalue the currency.