China eases currency rules
Hong Kong: Beijing has announced a broad package of currency changes on Friday that will allow Chinese individuals and institutions unprecedented access to foreign currencies. Analysts say that the move will likely allow President Hu Jintao to tell President George W. Bush in the coming week that China is moving closer to a market-based exchange rate.

The new rules may open foreign stock markets to Chinese individuals for the first time by allowing qualified Chinese brokerage firms and fund managers to purchase foreign securities, including stocks, on behalf of individual clients. Domestic banks and insurance companies, also, will be able to buy U.S. Treasury securities and other overseas fixed-income securities with foreign currency purchased in China.

Analysts however cautioned that the changes would have little immediate impact on the value of the yuan. Moreover, the real level of capital outflows from China could be constrained by quotas and other barriers contained in implementation guidelines that Beijing has yet to issue.

Some analysts said the changes, though timed to improve the tone of Hu's visit to the United States, were entirely in China's interest and not a direct response to pressure to increase the value of the yuan. They point out that the changes will facilitate foreign exchange outflow and accordingly ease pressure on the yuan to appreciate.

In addition to reducing pressure on the currency, enhanced capital outflows also will help prepare domestic banks for foreign competition, facilitate the expansion of Chinese corporations into international markets and aid the government in controlling an economy that is awash in liquidity.

Growth in M2 money supply, which includes all cash and bank deposits, rose 18.8 per cent in March from a year earlier to 31.1 trn yuan, or $3.88trn. China has built the largest mountain of foreign currency reserves in history - $875.1bn at the end of March, 32.8 per cent more than a year earlier.
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Ford to shut two of its oldest truck plants by 2008
Dearborn, USA: The Ford Motor Company said on Thursday that it planned to shut its truck plants in St. Paul and Norfolk, Va., as part of its revamping program called the 'Way Forward.' Both plants, among the oldest at Ford, will shut in 2008, the automaker said from its headquarters in Dearborn, Mich. Both opened in 1925 and together employ about 4,300 workers.

Ford outlined its 'Way Forward' plan in January, by way of reviving its operations in the United States, where its market share has dropped to the lowest level in more than 20 years. Although Ford was profitable worldwide last year, it lost $1.6 billion on its auto business in North America. Under the reorganization, Ford said it would close 14 factories, including 7 assembly plants, and eliminate 30,000 jobs through 2012.
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Russia files in US court to stop Yukos asset sale
Moscow: Eduard Rebgun, supervisory manager of Russian oil company Yukos, said Friday that he had filed suit in a US bankruptcy court seeking to stop Yukos from selling Lithuanian refinery Mazeikiu Nafta.

Rebgun said he had petitioned a Manhattan court under Chapter 15 of the US bankruptcy code to stay the sale of Mazeikiu, which is the biggest business in the Baltic states.

The Lithuanian government and four oil companies - LUKOIL, PKN Orlen and KazMunaiGas - are interested in Yukos's 53.7% stake of Mazeikiu, but so far no deal has emerged, even after months of talks.

Yukos CEO Steven Theede is pressing ahead with negotiations on selling Mazeikiu. He has said his legal advisers have given a green signal for the sale. Theede runs the paralyzed firm from self-imposed exile in London, while Moscow-based Yukos managers have refused to obey his orders, claiming they are now running the company.
Theede's only representative in Moscow is being held by prosecutors after being arrested last week.
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WTO chief Lamy blames big players for absence of trade deal
Nairobi: World Trade Organisation head Pascal Lamy on Friday blamed the big players, involved in the four-year-old global trade talks, for the absence of a deal so far, and called on African countries to put pressure on them.

With an April 30 deadline for a deal looming, the big players, the United States, the European Union, Brazil, Japan and India, in turn blamed each other and turned to African ministers to press issues.

The WTO's 149 members are supposed to strike a deal on farm and industrial goods but so far there is little sign of a breakthrough in the Doha round of talks that began in November 2001.

Lamy told a conference of African Union trade ministers in the Kenyan capital Nairobi. "It is not that what is on the table is nothing, but it is not sufficient to reach an agreement." He said the big players should offer what he termed "real cuts" in subsidies and tariffs.
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