Search

Some executives in the airline industry believe that rules that forbid carriers from acquiring foreign airlines should be relaxed. There are 523 airlines in the world, and not all of them can remain profitable. Consolidation would be one practical way for the industry to cope with market downturns.

New York City Council speaker, Peter Vallone, is calling for legislation to curb the persecution of Christians in countries such as China, Vietnam, Pakistan, and Indonesia. His bill is a sign that local governments are now taking the lead with regard to human rights, and this has led to concern from corporate executives, who believe that state and local sanctions will not only impact trade, but also wider foreign policy.

The name of George Soros has been mentioned in the media in connection with the Thai baht devaluation. Soros, of Soros Fund Management Company, is the man charged with forcing the UK to leave the European exchange rate mechanism through his currency interventions. Soros no longer involves himself in the daily control of his hedge funds, but he continues to set the broad strategy, along with his other work of opening up oppressed societies. Representatives of Soros Fund Management admit that Soros was consulted on actions concerning the Thai baht, but say that media reports are exaggerated.

The United States and other World Trade Organization members are demanding profound changes from China as a condition of membership. China is already making commitments to market opening and both US trade officials and European governments are working hard to accelerate discussions. However, there are doubts as to whether Beijing could stop subsidizing is state sector. Beijing has agreed to withdraw restrictions on the trading activities of Chinese and foreign companies and has begun providing more information on quotas and licensing requirements to its partners.

North and South Korean senior officials have met in New York for peace talks based on proposals made initially by Presidents Bill Clinton and Kim Young Sam of South Korea to look at ways of replacing the armistice with a peace treaty. Pyongyang is to further consider the proposal before deciding on four power talks. The US could pursue peace by pushing North and South Korea into serious reconciliation talks, whilst using food aid inducement and the normalization of economic and diplomatic relations to encourage North Korea.

Allegations that the Chinese embassy in Washington attempted to direct funds to the Democratic party before the 1996 presidential campaign have served to bolster the argument of those who feel that China should be 'contained.' This is particularly the case given that there have already been claims in the media that the US government may have permitted Asian political donors to determine foreign policy. If the Chinese government was involved in US fund-raising, then doubts will be raised about the commerce-first policy adopted towards China in 1994 by the Clinton administration.

Nissan, the second-largest car manufacturer in Japan, suffers from a lack of name recognition in the US. In mid-1996, only 69% of Americans recognized the Nissan name whereas Toyota had an 81% name recognition rate. To build name recognition, Nissan's new $200 million TV advertising campaign focuses on raising its overall profile rather than on promoting particular car models. One of its advertisements contains a model of a car which it no longer makes, while another contains no cars at all in the belief that it needs to build name recognition, not public awareness about its cars. Nissan's US sales dropped by 3.4% in 1994, and its US market share it expected to erode further in 1997.

There have been a range of reactions to claims by Lt.-Gen. Patrick Hughes, director of the US Defence Intelligence Agency, that China could become a large-scale regional threat to US interests. Some feel that his remarks represent a shift in US policy, while others disagree. Analysts generally feel that US government policy towards China has not really changed significantly since early 1996, with the focus remaining on taking a 'multifaceted' approach towards Beijing.

The United States of America is considering its position on a number of international relations issues with China after Hong Kong's handover. Its decision to reject requests from Hong Kong to extradite an allegedly corrupt businessman indicates its lack of committment to the British-run Hong Kong government and a recently agreed extradition treaty. The US is uncertain about how China's rule will affect Hong Kong's criminal justice system.

Index funds are pooled investments tracking market index movements through the purchase of some or all of the stocks making up the index. The annual management fee for index funds is less than for other types of equity funds and many institutional investors are increasingly placing their money into emerging-market index funds. The Vanguard Group of the US offers index funds and Gartmore Investment Management's five index funds track major indexes in the US, Britain, Japan, the Pacific rim and continental Europe.

US government officials hope to improve relations with the Chinese military when China's defence minister General Chi Haotian visits the US in Dec 1996. Chi is regarded as an important visitor because he is a vice-president of the Central Military Commission and a candidate for the Chinese Communist Party politburo. He and twenty others will stay in the US for 14 days. He is expected to receive a personal welcome by President Bill Clinton.

The Republican party is hoping to gain political advantage by raising doubts about some of the more than $1 million which the Democratic party has received since 1992 from Indonesia's Riady family and its Lippo Group associates. Some Republicans are even claiming that the donations prompted Pres Bill Clinton to take a less firm line towards Indonesia. Indonesians claim that US views of the Riady family and its businesses are misguided.

Nomura Securities joined the Bermuda Stock Exchange (BSX) in Aug 1996. BSX aims to be the first wholly electronic offshore securities market and could attract offshore deposits through this move. Issuers with a Bermuda listing can attract funds from the US with no need to list in the US under regulation by the Securities and Exchange Commission. BSX also aims to capture trading business from London, England, in Singapore and Hong Kong stocks at times when Asian markets have shut. BSX can charge lower fees than the London Stock Exchange.

Unocal faces legal action from the exiled government of Burma over a project to build a pipeline to Thailand and the development of a gas field. The plaintiff alleges that Unocal is involved in the project with the military junta as its partner, and the junta is involved in repression, money laundering and abuse of human rights. The issue of whether forced labor is involved in the project is likely to be dealt with if the case is tried.

Anti-dumping laws have become a bone of contention between the U.S. and China. Chinese government officials assert that anti-dumping laws discriminate against China. Chinese lawyers argue that China should not be classified as a nonmarket economy in which prices are set by government fiat. In such cases, the Commerce Department calculates the actual costs of production using a surrogate economy, usually India. The Chinese, however, say this does not take into account nonstate producers and other factors such as Hong Kong distributors.

The US Department of Defense has decided to terminate the US-China Joint Defense Conversion Commission (JDCC) after just 21 months because of limited activity and soured relations with China. The JDCC was formed to help Chinese military plants convert to nonmilitary production, but the technology transferred from the US to China has worried many members of the US Congress. There have been claims that some technologies may simply allow China to modernize its military.