The Wall Street Journal Asia - Dec 12 2012, Literatura, Gazety, Magazyny
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IN DEPTH
Pages 14-15
OPINION:
India’s Big
Wal-Mart
Breakthrough
Page 11
IN DEPTH
Pages 14-15
ASIA EDITION
VOL. XXXVII NO. 73
WEDNESDAY, DECEMBER 12, 2012
HSBC to Pay
$1.9 Billion
U.S. Penalty
Boehner
Fa c e s Te s t
Unifying
His Ranks
Egypt Unrest Prompts Request for Delay of Loan
B
Y
P
ATRICK
O
’
C
ONNOR
WASHINGTON—Republi-
can House Speaker John
Boehner once again is locked
in contentious budget talks,
which in the past have ended
badly. This time, he is leading
negotiations after months
spent quietly winning the
backing of his own party.
The unruly freshman class
of 2010 has thwarted Mr.
Boehner numerous times dur-
ing his two years as speaker.
To bolster his position, Mr.
Boehner has been slowly
bringing Republican freshmen
to his side by introducing them
to the realities of legislating
and congressional leadership.
Mr. Boehner’s strategy, and
his future as speaker, will get
tested between now and year-
end as Washington wrestles
with negotiations designed to
avert tax increases and spend-
ing cuts due to begin in early
January. Mr. Boehner and
President Barack Obama met
privately Sunday to discuss a
budget deal, their first face-
to-face meeting in weeks. Mr.
Boehner addressed the House
Tuesday about the status of
tax and spending talks with
Mr. Obama.
On Monday, people close
to the talks said negotiations
were getting more “serious.”
They said big divisions re-
mained but didn’t give details.
Mr. Boehner declined to com-
ment for this article.
Mr. Boehner has used both
carrot and stick to unify his
ranks, lawmakers said. Rep.
Steve Southerland, a voluble
freshman, got a job managing
a transportation bill. Three
freshmen who continued to
defy the House leadership on
key votes got booted from
plum committees. Others
learned the limits of their
power by watching bills the
House passed disappear in the
Senate.
“There’s a lot more cohe-
siveness between our class
and leadership,” said Rep.
Dennis Ross (R., Fla.), a mem-
ber of the class of 2010 who
voted against legislation
Please turn to page 6
B
Y
D
EVLIN
B
ARRETT
A
ND
E
VAN
P
EREZ
mentally different organiza-
tion from the one that made
those mistakes.”
HSBC shares climbed 0.3%
on Tuesday in Hong Kong.
The bank, whose history
dates to an era when the Brit-
ish empire was at its height,
has spent the past two years
selling off unprofitable busi-
nesses and centralizing its
global structure stretched
across 80 countries.
HSBC officials now blame
that structure for much of the
bank’s U.S. legal trouble,
which began when Immigra-
tion and Customs Enforce-
ment agents in 2007 looked at
suspicious cash flows involv-
ing HSBC branches in Mexico
and the U.S.
In the past year, the bank
has hired several former U.S.
government money-launder-
ing experts to help improve
its financial controls. It
named Stuart Levey as its top
legal officer. Mr. Levey for-
merly served as the Treasury
Department’s top official
tracking terrorism and illicit
financing. His portfolio in-
cludes managing legal officers
in HSBC operations around
the world.
Please turn to page 23
WASHINGTON—
HSBC
Holdings
PLC acknowledged
Tuesday that for years it ig-
nored possible money laun-
dering, part of a record $1.9
billion settlement with U.S.
authorities that caps the
bank’s disastrous foray into
the U.S. market.
The U.K.-based banking
company is expected to forfeit
nearly $1.3 billion as part of a
deferred prosecution agree-
ment, the largest-ever U.S.
forfeiture for a bank, accord-
ing to people briefed on the
agreement between HSBC and
multiple U.S. agencies. The
deal includes a civil fine of
more than $650 million, ac-
cording to these people.
As part of the agreement,
the bank will admit to violat-
ing the Bank Secrecy Act, the
Trading with the Enemy Act
and other U.S. laws intended
to prohibit money laundering,
a government official said.
In a statement, HSBC con-
firmed the U.S. settlement,
saying it expected to reach a
similar agreement with U.K.
authorities soon.
CEO Stuart Gulliver said:
“We accept responsibility for
our past mistakes. We have
said we are profoundly sorry
for them, and we do so again.
The HSBC of today is a funda-
Reuters
U.K. arrests three men in
Libor probe.................................... 3
Heard: Pricey HSBC shares
can’t take more slip-ups.... 30
Soldiers blocked a road that protesters sought to use to reach the presidential palace in Cairo
Tuesday. Egypt asked the International Monetary Fund to delay the country’s request for a $4.8 billion
loan, as the continuing dispute leaves President Morsi unable to impose economic reform. Page 8
China Tries to Narrow Income Gap
Inside
B
Y
B
OB
D
AVIS
meant a transfer of wealth
from state-owned enter-
prises—to boost wages at the
expense of profits.
Now, the plan is finally set
to be released this month af-
ter a push by Mr. Wen, in the
11th hour of his tenure. But af-
ter at least a half-dozen
drafts, some of the most sig-
nificant proposals have been
watered down, or dropped
completely, after opposition
from state-owned firms, re-
searchers involved in the proj-
ect say.
The result is a general set
of principles rather than a
practical road map with spe-
cifics on how to redistribute
wealth, they say.
“The policy’s target is to
reduce enterprise income and
give more money to labor,”
said Qi Jingmei, a research
fellow for the State Informa-
tion Center, a government
think tank. “But monopoly
companies and state-owned
banks don’t want to give more
profit to the country and let
the government redistribute
it.”
underscore the difficulties
China’s new Communist Party
chief, Xi Jinping, and incom-
ing premier, Li Keqiang, will
face as the task of dealing
with an issue that threatens to
stall growth and ignite social
unrest falls to them.
Whether they decide to
take concrete measures to
ease China’s income gap—
which has begun to rival Latin
American and African na-
tions—presents an early test
of their willingness to embark
on difficult economic changes.
Please turn to page 16
BEIJING—Eight years ago,
China’s state planners were
given an ambitious task: come
up with a plan to narrow the
vast gap between China’s rich
and poor.
The project was at the
heart of a promise made as
President Hu Jintao and Pre-
mier Wen Jiabao came to
power, to build a “harmonious
society.”
Their vision was to raise
the income of workers and
farmers faster, even if
Fire-safety warnings at
Bangladesh factory
went unheeded.
Business .................. 17
The battle for deposits
at Chinese banks is
raising fears.
Business .................. 17
Obama-Republican ‘cliff’
talks turn positive..................... 6
it
The problems of the plan
2
| Wednesday, December 12, 2012
THE WALL STREET JOURNAL.
**
PAGE TWO
What’s News—
Inside
World News:
Afghans
probe corruption at
borders.
7
Personal Technology:
The iTunes upgrade
doesn’t skip a beat.
10
A rainbow appeared Tuesday in the skies above the Syrian capital, Damascus. International allies of the Syrian opposition will meet Wednesday to gauge whether
rebels and their backers can capitalize on fighters’ recent momentum while sidelining extremist groups that have been responsible for some of those gains.
Page 8
iii
Business & Finance
n
Sprint is in talks to acquire
the 49% of Clearwire it doesn’t al-
ready own, though the talks could
be complicated by the pending ac-
quisition of Sprint by Japan’s
Softbank.
WSJ.com/DealJournal
n
U.S. prosecutors
and regulators
are taking a deeper look into how
executives use prearranged trad-
ing plans to buy and sell shares of
their company stock.
17
n
North America will become
a
net energy exporter by 2025,
Exxon predicts in its latest long-
term energy outlook.
21
iii
World-Wide
n
Delta agreed to buy
Singapore
Airlines’ 49% stake in Virgin At-
lantic for $360 million, in a deal
that will boost the U.S. carrier’s
presence at London’s congested
Heathrow Airport.
19
n
China ramped up
production of
industrial materials in November,
suggesting smelters and refiners
are gaining confidence that the
nation is on a recovery course.
24
n
Hon Hai’s attempt
to automate
production of iPhones and other
consumer-electronics across China
is facing obstacles in high costs
and fast-changing technology.
18
n
Mali’s prime minister
resigned,
hours after soldiers who led a re-
cent coup burst into his home and
arrested him as he prepared to fly
to France.
WSJ.com/World
n
Authorities in the Chinese city
of Taiyuan said Carrefour charged
some consumers higher prices
during checkout than what was
advertised on store shelves.
20
n
Roman Abramovich agreed
to
buy a $1.49 billion stake in Norilsk
Nickel, in a deal by the Russian ty-
coon ending a four-year share-
holder dispute.
21
n
Greek bondholders submitted
bonds with a face value of about
$40.7 billion to the country’s
debt-buyback program, exceeding
the target.
WSJ.com/Europe
n
South Africa’s government
sought to allay concerns about
Mandela’s health, saying the for-
mer president has a lung infection
and is responding to treatment.
n
Lynas said it could export
re-
cycled waste from a new plant in
Malaysia, but the rare-earth pro-
ducer is also hoping to store it lo-
cally, rebutting Malaysian offi-
cials’ assertion that it is obligated
to export the materials.
21
Deal Journal Asia:
Bharti Infratel’s IPO
tests investor faith.
22
n
The U.S. Treasury said
it
would generate $7.6 billion in pro-
ceeds from its sale of AIG shares,
as it sold nearly all its remaining
holdings in the insurer.
29
n
Etihad of Abu Dhabi
is inter-
ested in the possible purchase of a
stake in India’s Kingfisher and the
two carriers are holding talks.
19
n
Suspected Islamist separatists
killed seven people in southern
Thailand, police said.
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THE WALL STREET JOURNAL.
Wednesday, December 12, 2012 |
3
WORLD NEWS
U.K. Arrests Three Men in Libor Probe
B
Y
D
AVID
E
NRICH
used benchmark interest rates, such
as the euro interbank offered rate,
or Euribor. More than a dozen banks
are under investigation by authori-
ties in several countries.
This appears to be the first time
that authorities in the U.K. or else-
where have arrested individuals in
connection with the case, which so
far has focused primarily on getting
banks to admit wrongdoing and pay
large financial penalties.
The SFO launched its criminal in-
vestigation in July, shortly after
Bar-
clays
PLC agreed to pay roughly
$450 million to settle U.S. and British
allegations that its traders and exec-
utives were involved with attempted
rate-fixing. U.S. criminal authorities
have been investigating rate-rigging
for much longer but haven’t charged
anyone.
In the U.K., authorities arrest in-
dividuals in the early, information-
gathering stages of an investigation.
It doesn’t necessarily mean that the
individuals
manipulation of Libor, according to
people close to that investigation.
People familiar with the matter have
said Mr. Hayes was the “Trader A”
who Canadian competition authori-
ties accused of working with traders
at other banks to push Libor up or
down.
The arrests are likely the first in
a small flurry of upcoming Libor-re-
lated developments. UBS could set-
tle rate-rigging allegations with au-
thorities in multiple countries as
soon as this week, according to peo-
ple familiar with the negotiations.
Royal Bank of Scotland Group
PLC
executives have said they are hoping
to wrap up similar settlement talks
in the near future.
Libor and Euribor are calculated
by daily surveys of banks, which es-
timate how much it costs a bank to
borrow money from a fellow lender.
The result is an average—with the
highest and lowest handful of esti-
mates excluded—which serves as
the basis for interest rates on hun-
dreds of trillions of dollars of loans,
derivatives and financial products
around the world.
—Margot Patrick
contributed to this article.
LONDON—British law-enforce-
ment authorities arrested three men
Tuesday morning as part of a wid-
ening criminal investigation into at-
tempted manipulation of interest
rates.
The U.K. Serious Fraud Office
said the three British nationals, ages
33, 41 and 47, are being questioned
at a London police station and that
authorities searched their homes
near London.
While the SFO didn’t identify the
men, one of them is Thomas Hayes,
a former trader at
UBS
AG and
Citi-
group
Inc., according to a person fa-
miliar with the matter. Regulators in
multiple countries have been look-
ing into Mr. Hayes as an alleged co-
ordinator of a group of employees
at multiple banks who sought to
manipulate the London interbank
offered rate, or Libor, according to
people familiar with the case.
Mr. Hayes couldn’t be reached to
comment.
Tuesday’s arrests mark a new
phase in the wide-ranging civil and
criminal investigations of attempted
rigging of Libor and other widely
The SFO launched its probe after Barclays settled with U.S. and U.K. authorities.
Since the Libor scandal erupted
following Barclays’s settlement,
traders and executives at a handful
of banks have been bracing for
criminal charges. Authorities in the
U.S. and elsewhere have been focus-
ing on multiple rings of traders at
various banks who tried to coordi-
nate their efforts to improperly in-
fluence Libor and Euribor.
Mr. Hayes has emerged as a key
figure.HeworkedinTokyoasa
trader at UBS from 2006 to 2009
before moving to Citigroup. Citi-
group fired him in 2010 as Libor-
manipulation investigations were
gaining steam, people familiar with
the matter have said.
Mr. Hayes was the main trader in
Japanese authorities’ civil enforce-
ment action against UBS and Citi-
group last year for their attempted
ultimately will
be
charged with a crime.
The identities of the other two
men who were arrested Tuesday
aren’t publicly known.
The SFO declined to comment.
4
| Wednesday, December 12, 2012
THE WALL STREET JOURNAL.
WORLD NEWS: ASIA
Myanmar Rights Face Hurdles
Google, Twitter
Give Voters
Chance to Riff
Japan’s politicians may be
banned from digital age
campaigning, but the nation’s
voters are not.
On Tuesday,
Twitter
announced on its Japanese blog
that it was designating the
Japanese hashtag #generalelection
for users to share their views
about the election, as well as an
official election home page to
gather tweets and photos related
to the election.
The microblogging site said its
aim was that “through Twitter,
the lower-house election will
become just a little more familiar
to everyone.”
In addition to showing tweets
using the election hashtag, the
Twitter site is aggregating tweets
about issues closely followed in
the election. But the inclusion of
the Trans-Pacific Partnership free
trade agreement and other issues
appear to be skewing the feed
largely toward tweets from the
U.S. and New Zealand speaking
out against the pact.
Twitter has in the past created
hashtags for presidential elections
in the U.S. and France, as well as
inviting politicians to respond to
questions submitted on the
microblogging service.
B
Y
S
AM
H
OLMES
Myanmar’s fledgling human-
rights commission is struggling to
carve out legitimacy for itself
through a proposed new law, even
as the challenges facing the rapidly
changing country were underscored
by the release of a prominent for-
mer Buddhist monk who was de-
tained for more than a week in an
apparent crackdown on protest.
The country’s human-rights com-
mission submitted a draft National
Human Rights Commission Law to
President Thein Sein for review that
would give it powers and funding to
investigate and protect human
rights. The submission was an-
nounced Monday to mark the United
Nations’ International Human Rights
Day. The 15-member commission
was formed in September 2011 by
the president as part of a raft of lib-
eralization overhauls.
The commission had sought to
submit the proposed law for legisla-
tive approval for the parliament’s
September session. However, law-
makers wouldn’t provide funding or
consider the bill unless it had for-
mal presidential blessing, said Hla
Myint, a commission member.
“This is the first time we’ve had
a law like this. People in Myan-
mar...think there is a contradiction
between funding from the govern-
ment and independence,” Mr. Hla
Myint said.
Parliamentary approval of a hu-
man-rights commission would mark
a significant development in a coun-
try where human-rights movements
were historically repressed under
the former military dictatorship.
Zaw Htay, an official in the presi-
dent’s office, said Mr. Thein Sein
would review the proposal in the
usual manner before forwarding to
parliament.
While many details are yet to be
determined, the draft includes giv-
ing the commission subpoena pow-
ers for documents and witnesses for
hearings.
Controversially, it recommends
appointments to the commission be
made by the president from a short
list of candidates drawn up by a se-
lection panel that would include the
attorney general, a Supreme Court
Buddhist monks hold flags and images of injured monks Saturday. A human-rights commission is trying to gain legitimacy.
judge and representatives from civil
society.
But human-rights advocates say
the steps aren’t enough. Phil Rob-
ertson, deputy Asia director at Hu-
man Rights Watch, said such a se-
lection process would go against
the United Nations’ Paris Principles
drawn up in 1991, which among
other things outline guidelines for
establishing the independence of
national human-rights
Myanmar’s process of re-engage-
ment with the international commu-
nity following decades of isolation
has been marked by a calibrated tit-
for-tat sequence of policy change
between both the Southeast Asian
country and Western nations.
Critics argue that the process of
re-engagement has recently moved
too quickly, with Myanmar, also
known as Burma, still struggling to
fulfil some basic human-rights re-
quirements.
Last month Barack Obama be-
came the first serving U.S. president
to visit Myanmar, a move that was
welcomed by many in the country as
a sign of its progress and accompa-
nied by government promises of
better behavior.
Ahead of the visit, the govern-
ment announced a series of initia-
tives, including the release of doz-
ens of political prisoners and
allowing the International Commit-
tee of the Red Cross to resume visits
to the nation’s prisons.
Recent events, however, are
overshadowing efforts by the gov-
ernment to improve the country’s
human-rights standing.
Gambira, a former monk who
rose to prominence as the leader of
the All-Burma Monks’ Alliance dur-
ing the “Saffron Revolution” pro-
tests in 2007, was arrested Dec. 1
and released on bail Monday from
Yangon’s Insein Prison.
Earlier this year, Mr. Gambira
had been released from a four-year
stint in prison for his role in the up-
rising; he was released as part of
one of several presidential prisoner
amnesties.
Mr. Gambira said in a phone in-
terview that he needed medical at-
tention but was mostly fine.
The 33-year-old’s most recent
charges include trespass and break-
ing and entering; the charges relate
to an incident that took place
shortly after his release from prison
in January.
He faces trial Friday.
His arrest follows a crackdown
last month on protesters, including
Buddhist monks, at a copper mine,
jointly owned by a Chinese arms
manufacturer and Myanmar’s mili-
tary, in the country’s north.
Myanmar’s government last
week apologized to the nation’s se-
nior Buddhist clerics for injuries
sustained in the crackdown.
—Celine Fernandez in Kuala
Lumpur contributed to this article.
commis-
sions.
“The president, to put it bluntly,
has got a conflict of interest” in de-
termining who should be on the
commission, Mr. Robertson said.
“The question is, do they create a
commission that really does have
the independence to go into a situa-
tion and make a call based on facts,
even if that call is unpopular with
the president’s office?”
Mr. Hla Myint, formerly a briga-
dier general with the Myanmar mili-
tary, said the proposed law could be
altered when it goes through the
parliamentary system, where the
military still holds a significant
number of seats. He expects to sub-
mit it to the legislature in early
2013 after Mr. Thein Sein approves
a version.
Google
has also created a
hashtag for its own social-
networking site ahead of the
election, though it has an aim of
eventually having voters pose
questions posted online directly to
the candidates.
The Internet giant solicited
from users questions they wanted
to pose to Japanese politicians,
using the hashtag
#letstalktopoliticians on its
Google+ site.
Users whose questions were
selected from those sent in by
Dec. 2, will be able to pose their
queries directly to politicians on
Dec. 14 from 10 a.m. to 5 p.m.
using the site’s multiuser video
chat service.
A spokeswoman for the
company said over 500 questions
had been submitted, and though
the specifics about parties
participating in the event hadn’t
been announced, they were
planning to have representatives
from eight parties participate.
Each 20-minute conversation
will feature five users,
additionally screened through an
interview process, one politician
and one moderator. The Google
spokeswoman said the moderator
would likely be someone from
outside the company.
The conversations will be
available for live viewing through
Google+ or through the video-
sharing website YouTube.
—Eleanor Warnock
Japan’s LDP, Ally Set for Solid Majority
B
Y
A
LEXANDER
M
ARTIN
ducted by telephone Saturday
through Monday. The Mainichi said
its projections were based on a sur-
vey of around 77,000 voters and ad-
ditional reporting from its bureaus
nationwide.
Polls released last week also
projected a solid LDP majority. But
the Mainichi survey is the first indi-
cating that the former ruling com-
bination of the LDP and New Ko-
meito could secure a two-thirds
majority.
The survey also projected Prime
Minister Yoshihiko Noda’s ruling
Democratic Party of Japan is in for
a crushing defeat, securing less
than a third of its current 230
seats. That is a more dismal sce-
nario than in earlier surveys pro-
jecting the DPJ losing over half of
its seats.
A separate poll by the daily
Sankei newspaper also showed the
LDP and New Komeito together
could win more than 300 seats, pos-
sibly securing the two-thirds major-
ity. The Sankei poll of around
43,000 voters, conducted from
Thursday to Sunday, projected the
Yomiuri Shimbun, showed 29% of
voters backed the LDP, up from 19%
in a previous survey.
The Yomiuri surveyed 1,070 vot-
ers Friday to Sunday, finding sup-
port for the DPJ little changed at
12% from a previous survey taken
Nov. 30 to Dec. 2, suggesting the
LDP was widening its lead.
The Yomiuri noted that the num-
ber of undecided voters had de-
creased to 26% from 32% in the lat-
est survey, indicating support may
be flowing toward the LDP and its
leader Shinzo Abe, a strong propo-
nent of monetary easing and a hawk
on security matters.
Both the DPJ and the LDP have
been sharpening their rhetoric as
the campaign nears its climax. Over
the weekend, Mr. Noda slammed
Mr. Abe for declining to clarify
whether he would double the sales
tax as the law stipulated. Mean-
while the opposition has been call-
ing for the head of the govern-
ment’s top spokesman, Osamu
Fujimura, over a gaffe he made last
week on the expected launch of a
North Korean rocket.
TOKYO—With just days to go be-
fore Japan’s lower-house election
determines the next government,
local media polls showed Tuesday
that the main opposition Liberal
Democratic Party was on its way to
a sweeping victory that could hand
it and its smaller ally a two-thirds
majority, allowing it to enact badly
needed legislation that has been
blocked for years.
Should the LDP and its ally, New
Komeito, secure 320 or more lower-
house seats, they could override
any upper-house veto, overcoming
the gridlock of a “divided” parlia-
ment. This year, passage of budget-
related legislation was delayed by
combined resistance by the opposi-
tion parties in the upper house.
The results of a survey by the
Mainichi daily newspaper showed
that the LDP appeared set to single-
handedly win nearly 300 of 480
lower-house seats. Combined with
those of New Komeito, the total
could surpass 320.
The nationwide poll was con-
Opposition LDP leader Shinzo Abe.
Keep up on Japan minute by
minute with The Wall Street
Journal’s Japan Real Time at
DPJ would win fewer than 100
seats.
And in a further sign the LDP is
gaining momentum, a survey by Ja-
pan’s largest circulation daily, the
THE WALL STREET JOURNAL.
Wednesday, December 12, 2012 |
5
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WORLD NEWS: ASIA
India Plans Stimulus to Improve Trade
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looning fiscal deficit and tight mon-
etary policy. The economy grew
6.5% last fiscal year—the slowest
pace in nearly a decade—and the ru-
pee has weakened about 2.6%
against the U.S. dollar so far in
2012, after a 16% fall in 2011.
Trade Secretary S.R. Rao said
the government will announce by
the end of this week a package to
stimulate merchandise exports,
which would help boost exports in
the January-March quarter. He
didn’t give details of the package.
India hopes to increase its exports
by about 20% to $360 billion in the
fiscal year ending March 2013—a tar-
get that looks increasingly difficult
due to weak demand in the key mar-
kets of the U.S. and Europe.
“The fact remains we have been
nowhere near that [export target],”
Mr. Rao said.
Demand from markets in South-
east Asia has declined, but it has
picked up in West Asia, North Africa
and Latin America, said Anup Pujari,
director general of foreign trade. In-
dia has been encouraging exporters
to tap those markets and diversify
to cushion the slowdown in demand
from the U.S. and Europe.
Sonal Varma, an economist at
Nomura, said the trade deficit was
larger than the brokerage firm’s ex-
pectation of $18.3 billion. She said
the decline from October wasn’t
surprising as demand for gold, In-
dia’s second-largest import, usually
fades after the festival of Diwali,
ment Tuesday showed oil imports in
November rose 16.77% to $14.5 bil-
lion from a year earlier, while nonoil
imports rose 1.5% to $27 billion.
The stimulus announced Tuesday
will be the government’s second
such move this year to help Indian
exporters weather the demand slow-
down. In June it initiated a 100 bil-
lion rupee ($1.79 billion) package to
encourage exports, mainly by small
businesses that are usually hit hard-
est when exports decline.
As part of that package, the gov-
ernment extended by a year to
March 2013 an import tax waiver on
some capital goods to encourage lo-
cal manufacturers engaged in ex-
ports. It also extended a 2% reduc-
tion in the interest rate charged on
loans to exporters of handicrafts
and hand-woven clothing, and some
other small and medium enter-
prises.
NEW DELHI—India’s government
said it would launch a stimulus pack-
age to boost trade after data showed
exports fell in November, marking
the seventh consecutive month of
year-to-year decline.
The country’s trade deficit nar-
rowed to $19.3 billion in November
from $21 billion in October, but it
was wider than the $15.8 billion re-
ported a year earlier, and the gov-
ernment said it could fall short of
its full-year export target.
Exports for the month fell 4.17%
from a year earlier to $22.3 billion,
while imports rose 6.35% to $41.5
billion.
Weak exports are worsening the
slowdown in India, where the gov-
ernment faces domestic political
pressure due to high inflation, a bal-
The economy grew 6.5% last fiscal year, its slowest
pace in nearly a decade, and the rupee has weakened.
Mr. Rao said the government is
worried about the high trade gap
straining India’s current-account
balance and weighing on the rupee.
Of particular concern is the rise
in imports of crude oil and petro-
leum products, which are pushing
up the import bill. India imports
more than 80% of its fuel needs.
which was on Nov. 13 this year.
Ms. Varma said India’s current-
account deficit is expected to re-
main high at 4.2% of gross domestic
product in the current fiscal year.
“Overall, India’s external sector
remains in a precarious state,” she
said.
The data released by the govern-
Output Growth
Accelerates
In Malaysia
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BHRAJIT
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ANGOPADHYAY
KUALA LUMPUR—Malaysia’s in-
dustrial output rose at its fastest
pace in five months in October, as
firm domestic demand continued to
make up for weaker exports, power-
ing growth in Southeast Asia’s
third-largest economy.
Industrial production in October
was up 5.8% from a year earlier,
handily beating expectations, the
Department of Statistics reported
Tuesday. Production in the manu-
facturing sector was up 5.8%, min-
ing output was up 6.1% and electric-
ity production was up 4.4%. The
overall rate was more than double
the median 2.3% forecast of 13
economists polled by Dow Jones
Newswires, and better than the up-
wardly revised 5% expansion in
September.
The robust industrial output, to-
gether with a benign inflation out-
look, gives Malaysia’s central bank
room to keep the policy interest
rate on hold at least through the
first half of 2013, said Anthony
Dass, economist at MIDF Research.
Bank Negara Malaysia has held
the rate at 3% over nine successive
policy reviews. In contrast, some
other Asian central banks, including
those of Thailand and South Korea,
have eased monetary policy to sup-
port their economies amid slowing
global growth.
“This bounce also mirrors signs
of stabilization in production sur-
veys from the region, though pro-
tracted weakness in export-oriented
industries will continue to impinge
on the pace of activity,” said Ra-
dhika Rao, a regional economist
from Forecastweb.
Thailand reported industrial
production expanded for the first
time in five months in October, but
Singapore’s manufacturing output
contracted for the fourth straight
month as production of electronics
and pharmaceuticals items fell.
For Malaysia, economists say
higher government spending ahead
of an election that must be held by
spring will likely help keep domes-
tic demand strong.
From a month earlier, Malaysian
output was up a seasonally adjusted
0.6% in October, driven by higher
mining output; manufacturing and
electricity production shrank.
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