[Kabar-indonesia] 21 RI Biz/Econ Reports: Garuda; Budget Deficit; 11.25% SBIs; Telkom; WTO; Proton
JoyoNews at aol.com
JoyoNews at aol.com
Wed Sep 13 16:45:20 MDT 2006
21 Reports:
- Indonesia to inject more than
100 mln dlrs into Garuda: minister
- Indonesia Jan-Aug budget deficit
10.16 trln rupiah
- Bank Indonesia awards 37.46 trln
rupiah of 1-mth SBIs at fixed rate
of 11.25 pct
- Indonesia expecting to earn
200 mln USD from state bond sales
- Indonesia's Telkom assigned 'BB"-
rating with stable outlook - Fitch
- Indonesia To Sell 28.39% Stake
In Bank Tabungan In 4Q IPO
- Stock Watch - Indonesia's Astra
Intl higher on strong Aug car sales
- Malaysia's Proton unit to launch
Indonesia retail sales by Q1 next
yr - report
- JP: Countries agree to cut rubber
exports by 10%
- Japan Minister: WTO Members May
Return To Table In Oct - Kyodo
- Indonesia's Bhakti raises stake
in Bimantara to 42.9 pct from 42.2 pct
- Indonesia Air Transport expects net
profit to grow by 10-15 pct in 06, 07
- Stock Alert - Indonesia Air Transport
above IPO price on debut
- Indonesia's Pupuk Kaltim To Issue
IDR600B Bonds Next Year
- Indonesia's Alfa says Singapore's
Prime Horizon to buy stake from
key shrholder
- Singapore's Wilmar assigned
'outperform' rating - Credit Suisse
- Indonesia to require manufacturers
to move to industrial estates
- East Java farmers complain about
availability of fertilizers
- Indonesia palm oil prices down
on Malaysia, rupiah
- Vietnam Rice-Prices stable
before Indonesia tender
- Dow Jones: China-Tariff
Discord Escalates
Indonesia to inject more than 100 mln dlrs into Garuda: minister
JAKARTA, September 13 (AFP) -- Indonesia's government is to inject one
trillion rupiah (109 million dollars) into struggling flag carrier
Garuda, a minister has said.
State Enterprises Minister Sugiharto said his office and the lower
house of parliament had agreed to inject the capital in a bid to keep
the debt-laden airline afloat.
"A portion of the funds will come from the 2006 revised state budget
and the remainder will come from next year's budget," Sugiharto told
reporters late Tuesday.
"Hopefully, the capital injection will enable Garuda to keep flying as
normal," he added.
The lower house of parliament approved the revised 2006 state budget on
Tuesday.
Lawmaker Dradjad Wibowo said parliament had agreed on the financing
but Garuda's management was still required to present their
restructuring plan to the house in detail.
In March, a report said that 50 million dollars would go towards
Garuda's operations and the remainder be used to repay debt that was
due last December.
Sugiharto has previously said the government may sell a stake in
Garuda this year as part of efforts to revive its flagging fortunes.
As of end-2005, loss-making Garuda owed a total of 795 million
dollars. Its losses last year fell some 17 percent to 672 billion
rupiah.
The carrier has been hard-hit by plunging arrivals on the resort
island of Bali where Islamic extremists launched a triple suicide
bombing last October, killing 20 people.
It has also suffered in the past year from soaring global oil prices,
a weakening of the Indonesian rupiah and rising interest rates.
--------------------------------------------------------------
Indonesia Jan-Aug budget deficit 10.16 trln rupiah
JAKARTA, September 13 (XFN-ASIA) - The state budget deficit in the
eight months to August totaled 10.16 trln rupiah, with spending
reaching 360.97 trln rupiah, the Ministry of Finance said.
The government has raised its budget deficit forecast for this year to
40 trln rupiah from an initial projection of 22.43 trln, to reflect
higher spending. Spending for the year is now seen reaching 699.1 trln
rupiah from 647.67 trln initially.
The ministry also said actual tax receipts in the first eight months
reached 248.44 trln while non-tax revenue totaled 101.46.
-----------------------------------------------------------------
Bank Indonesia awards 37.46 trln rupiah of 1-mth SBIs at fixed rate of 11.25
pct
JAKARTA, September 13 (XFN-ASIA) - Bank Indonesia said it has awarded
37.46 trln rupiah worth of one month Bank Indonesia Certificates
(SBIs) at a fixed interest rate rate of 11.25 pct at today's auction.
It said all the bids made were absorbed.
------------------------------------------------------------------
Indonesia expecting to earn 200 mln USD from state bond sales
JAKARTA, September 13 (Xinhua) -- The Indonesian government expects to
earn an equivalent of some 200 million U.S. dollars in proceeds from
state bond sales due on Sept. 19.
"The targeted proceeds will be used to finance part of the State
Budget 2006 and to form a benchmark in 2025," the Finance Ministry's
spokesman Marwanto Harjowiryono was Wednesday quoted by the national
Antara news agency as saying.
The value of each unit of the state bonds was 1 million rupiah (around
10 dollars), he said, adding that coupon repayment would be carried
out on March 15 and Sept. 15 every year.
The central bank will host an open auction for the bond sales, and
bidders are expected to represent banks and security companies.
------------------------------------------------------------------
Indonesia's Telkom assigned 'BB-' rating with stable outlook - Fitch
JAKARTA, September 13 (XFN-ASIA) - Fitch Ratings said it has assigned
PT Telekomunikasi Indonesia long-term foreign and local currency
issuer default ratings of 'BB-' with a stable outlook.
The ratings take into account Telkom's diversified operations and
entrenched position in the Indonesian telecoms sector, and its
dominant share of fixed-line and cellular services, Fitch said.
The rating agency said it anticipates Telkom's capex to reach up to
22.0 trln rupiah per annum over the next two years, leading free cash
flow to turn slightly negative based upon current shareholder return
levels.
Consequently, the company's leverage metrics may potentially
experience mild pressure over the next one or two year.
It said the ratings also consider rising competition across Telkom's
business segments. The stable outlook for the ratings is based on the
expectation that Telkom will maintain its dominant position within the
key fixed-line and cellular segments without material change in its
financial position over the medium term, Fitch said.
-------------------------------------------------------------------
Indonesia To Sell 28.39% Stake In Bank Tabungan In 4Q IPO
JAKARTA, September 13 (Dow Jones)--The Indonesian government plans to
sell its 28.39% stake in mid-sized PT Bank Tabungan Pensiunan Negara
(BTPN.JK), or BTPN, in the fourth quarter of this year.
The government's sale will be conducted at the same time as when the
bank launches its initial public offering, said Mohammad Syahrial,
president director of state-owned PT Perusahaan Pengelola Aset, or
PPA, which the government has tasked to manage and sell its stakes in
several local banks.
In the IPO, 48.39% of Bank Tabungan will be on offer to the public.
The government is selling its stake in local banks to raise funds to
help cover the state budget deficit. However, Syahrial didn't mention
the amount the government hopes to raise from the Bank Tabungan stake
sale.
Bank Tabungan said it will use the proceeds from the IPO to strengthen
its working capital.
Next year, PPA plans to sell a 5.5% stake in Indonesia's seventh
largest bank by assets, PT Bank International Indonesia (BNII.JK).
------------------------------------------------------------------
Stock Watch - Indonesia's Astra Intl higher on strong Aug car sales
JAKARTA, September 13 (XFN-ASIA) - PT Astra International rose on news
that it posted strong car sales in August, dealers said.
They added the stock was also supported by some technically driven
buying after recent sharp falls.
At 11:05 am, Astra International was up 350 rupiah or 3.03 pct at 11,900.
The composite index was up 19.838 points at 1,455.045.
A report released by the Indonesian Automotive Industries Association
(Gaikindo) yesterday showed that domestic car sales jumped to 28,067
vehicles in August from 21,891 in July.
The report said Astra's market share rose to 53 pct in August from 49
pct in the previous month with local sales rising to 14,872 units form
10,781.
"It is a positive surprise. The number came in pretty strong even
hough people had expected August would be better (than previous
months)," an automotive analyst with a foreign brokerage said.
He noted that August sales, which were the biggest so far this year,
may have benefited from follow up purchases arising from an auto show
in late July.
"I don't think it (the August car sales level) will be sustained in
the following months through to the year-end. We expect it to
stabilize at around 23,000-25,000 (vehicles a month) going forward,"
he said.
However he believes sales will strengthen next year as a result of
increased consumer spending driven by further interest rate cuts which
are expected going forward.
----------------------------------------------------------------
Malaysia's Proton unit to launch Indonesia retail sales by Q1 next yr - report
KUALA LUMPUR, September 13 (XFN-ASIA) - Proton Holdings Bhd's unit PT
Proton Edar Indonesia plans to launch retail sales operations in
Jakarta by the first quarter of 2007, Bernama news agency reported,
citing a company official.
It quoted Ahmad Tifli Talha, head of export division at Proton
Marketing Sdn Bhd, as saying that retail operations in Indonesia will
start with the Gen-2 and Waja models.
The Malaysian national car maker hopes to achieve its own niche in
terms of the Indonesia passenger car market share, Ahmad Tifli said.
'Looking at the market, SUVs (sports utility vehicles) and MPVs
(multi-purpose vehicles) are the major market but that doesn't mean
there are no other segments,' he was quoted as saying.
'We can still carve our own niche in terms of market share,' he said.
Proton delivered the the first batch of Wira models to Pusat Koperasi
Angkatan Udara (Puskopau), a taxi company, in Indonesia today.
---------------------------------
The Jakarta Post
September 13, 2006
Countries agree to cut rubber exports by 10%
The Jakarta Post, Jakarta
Indonesia, Malaysia and Thailand -- the world's three largest rubber
producers -- will cut their rubber exports by 10 percent if the prices on the
international market fall to US$1.3 a kilogram.
The three countries, grouped together under the International Tripartite
Rubber Council (ITRC), announced the decision after a recent meeting in Bangkok.
"We've decided to cut our respective exports to boost prices, which have been
falling in the last few weeks," Indonesian Rubber Producers Association
executive secretary Syarbaini Zain told Antara in Medan on Tuesday.
He said the price of SIR 20-type rubber had dropped from US$2.3 a kilogram
three weeks ago, to only $1.76 a kg last week.
Syarbaini said the declining price was partly because of "incorrect" market
speculation that Indonesia, Malaysia and Thailand had oversupplied the market.
The three countries produced about 6.4 million tons of rubber last year,
commanding about 70 percent of the world's market share.
"Beside cutting exports, we've also agreed to cut production by 4 percent,"
he said.
--------------------------------
Japan Minister: WTO Members May Return To Table In Oct - Kyodo
NEW YORK, Sept. 12 (Dow Jones)--Japan's Agriculture, Forestry and Fisheries
Minister Shoichi Nakagawa suggested Tuesday that the stalled Doha Round of
global free trade negotiations under the World Trade Organization may resume in
the near future, Kyodo News Agency reported.
"There should be some signs indicating the end of the cessation (of the
negotiation) in October," Japan's farm minister told reporters in Tokyo, according
to Kyodo.
He also said that WTO Director General Pascal Lamy said at a meeting of a
group of developing nations and key rich countries held in Rio De Janeiro during
the weekend that he wants to lay out the direction of the resumed talks by the
end of March, Kyodo reported.
Nakagawa said he told Lamy in response to his remarks that the schedule seems
to be very tight, according to Kyodo.
Members of the so-called Group of 20 agreed Sunday the trade liberalization
talks should resume under the WTO. It was attended by ministers of 23 members
encompassing Brazil, China, India, Egypt, Indonesia, the Philippines and South
Africa along with their counterparts from the U.S., the European Union and
Japan.
Launched in the Qatari capital Doha in November 2001, the trade round is
deadlocked largely due to dispute over agricultural trade between the U.S., the
European Union and the emerging economies of Brazil and India.
---------------------------------
Indonesia's Bhakti raises stake in Bimantara to 42.9 pct from 42.2 pct
JAKARTA, September 13 (XFN-ASIA) - PT Bahkti Investama said it
recently bought additional shares of PT Bimantara Citra for 2,000
rupiah each, raising its stake in the firm to 42.9 pct from 42.2 pct
previously.
"This (share purchase) shows our seriousness in growing our media and
telecommunication businesses through Bimantara," Bhakti president Hary
Djaja said in a statement.
He added that Bhakti eventually aims to increase its stake in
Bimantara to above 51 pct.
----------------------------------------------------------------
Indonesia Air Transport expects net profit to grow by 10-15 pct in 2006, 2007
JAKARTA, September 13 (XFN-ASIA) - Charter airline PT Indonesia Air
Transport, a unit of the PT Bimantara Citra group, expects to post net
profit and revenue growth of 10-15 pct this year and next, boosted by
expected new contracts from oil and gas companies, a company official
said.
"We expect our net profit as well as revenue to grow by an average of
10-15 pct this and next year," Rukman Prawirasastra, the company's
president told reporters at the witnessing of the company's listing
debut.
Last year it recorded net profit of 15.12 bln rupiah, compared to a
net loss of 10.34 bln rupiah the year before. Sales last year reached
231.05 bln rupiah, up 13.37 pct year-on-year.
Prawirasastra said the company has just signed a new contract worth
1.4 mln usd with an Italian oil company, ENI, for a chartered airline
service for 10 months.
"We expect to get at least two new major contracts next year," he added.
He added the company is planning to add two new fixed wing aircraft by
the end of this year, raising the company's total chartered aircraft
to 17.
About 15 pct of the funds needed to purchase the aircraft, at a cost
of 3 mln usd, will be financed by the proceeds of the IPO.
The company also plans to add 3 more aircraft next year, he said.
Prawirasastra added the company plans to allocate 30 mln usd for
capital expenditure (capex) next year.
----------------------------
Stock Alert - Indonesia Air Transport above IPO price on debut
JAKARTA, September 13 (XFN-ASIA) - PT Indonesia Air Transport, a unit
of diversified conglomerate PT Bimantara Citra, was trading above its
IPO price on debut here.
Indonesia Air provides charter airline and helicopter services.
The stock was up 15 rupiah, or 11.54 pct, at 145, but was off a high
of 150. Its IPO was priced at 130.
In the offering the firm sold 432 mln shares, or 20.19 pct of its
enlarged capital.
"I think the broader market rebound provided some support to Indonesia
Air on its debut," an institutional dealer with a local brokerage
said.
The slight pullback from its early high however suggests that some
investors who acquired IPO stock were now cashing in to take quick
profits, the dealer said.
------------------------------------------------------------
Indonesia's Pupuk Kaltim To Issue IDR600B Bonds Next Year
JAKARTA, September 13 (Dow Jones)--Indonesian state-owned fertilizer
company PT Pabrik Pupuk Kaltim said Wednesday it may issue IDR600
billion worth of bonds next year to refinance maturing debt of the
same amount.
Pupuk Kaltim, which pays 18% on the maturing bonds, hopes to pay a
lower coupon rate on the new bonds given falling domestic rates, Said
Didu, a commissioner with the company, told reporters.
The existing bonds were issued in 2001.
"The coupon rate of the (existing bonds) is very high," Didu said.
Local companies that issued bonds recently paid annual coupon rates of
around 13%.
------------------------------------------------------------
Indonesia's Alfa says Singapore's Prime Horizon to buy stake from key
shrholder
JAKARTA, September 13 (XFN-ASIA) - Consumer goods retailer and
wholesaler PT Alfa Retailindo said Singapore-based Prime Horizon Pte
is interested in acquiring a 34.05 pct stake in the company from
controlling shareholder PT Sigmantara Alfindo.
'We have received a letter from Prime Horizon stating that it has
begun talks with Sigmantara about its plan to acquire 34.05 pct
stake,' Alfa said in a statement to the Jakarta Stock Exchange.
The planned transaction, if it goes through, could result in Prime
Horizon 'having the capacity to control Alfa,' Prime said in a
statement released here yesterday.
PT Sigmantara Alfindo is currently the biggest shareholder in Alfa
with a 56.60 pct stake. PT HM Sampoerna holds 23.40 pct and the
investing public owns the balance.
Prime Horizon is jointly owned by the Singapore government's GIC
Special Investments Pte Ltd, Citigroup Financial Products Inc and
Malaysia's CIMB Group.
-----------------------------------------------------------
Singapore's Wilmar assigned 'outperform' rating - Credit Suisse
SINGAPORE, September 13 (XFN-ASIA) - Credit Suisse says it has started
covering Wilmar International with a 'outperform' rating and a target
price of 1.50 sgd per share, remarking on the growth prospects for the
integrated argribusiness group.
'Wilmar is the largest palm oil refiner in Indonesia, with a ferocious
appetite to expand and value-add downstream,' Credit Suisse said in a
note to clients.
The brokerage said Wilmar could expect a compound annual growth rate
of 45 pct in earnings per share in 2005-2007, driven by expansion of
capacity in its refinery business and its entry into the biodiesel
sector.
Credit Suisse expects Wilmar's net profit to grow to 84.8 mln usd this
year from 57.9 mln last year, to 170.5 mln usd next year and to 203.8
mln usd in 2008.
At 3.12 pm, Wilmar was up 0.06 sgd or 5.83 pct at 1.09, on top volume
of 29.16 mln shares.
------------------------------------------------------------
Indonesia to require manufacturers to move to industrial estates
JAKARTA September 13 (Asia Pulse/Antara) -- The industry ministry has
wrapped up drafting a government regulation requiring all non oil/gas
manufacturing factories to move into industrial estates.
When the regulation is approved factories will be given time from
three to ten years to move into an industrial estate, secretary
general of industry ministry Agus Tjahjana said.
Agus said the regulation, aimed at creating order in the layout and
environmental management, will also provide facilities in the forms of
faster administrative services, fiscal incentives by reducing tax by
5% and other incentives.
Currently the country has 83 industrial estates totaling 27,245
hectares in 24 regencies and cities.
The government plans to increase the number to 6,000 industrial
estates each to accommodate 200 companies.
--------------------------------------------------------------
East Java farmers complain about availability of fertilizers
BLITAR, September 13 (Asia Pulse/Antara) -- Farmers in Blitar regency,
one of the agricultural centres in East Java, are again facing
difficulties in obtaining urea fertilizer and have complained about
their obligation to buy Pelangi NPK fertilizer produced by PT Pupuk
Kaltim.
Some farmers in Wonorejo, a village in Talun subdistrict, said on
Monday that they could get urea fertilizer only from certain kiosks
and in very limited quantities. But they can take the urea home only
if they also purchased Pelangi NPK fertilizer.
"One subsidized sack of urea costs Rp60,000 (US$6.57), but could be
bought only if we also buy a 25-kg sack of Pelangi NPK at Rp 46,000.
For every 2 sacks of urea, we have to buy an extra sack of NPK," some
of the local farmers said.
This time, the fertilizer shortage has made it difficult to adequately
fertilize corn only two weeks to one month old, while the requirement
to also buy NPK fertilizer increased the farmers` financial burden.
"With our limited financial capacity, we need urea fertilizer, but to
our big surprise, we could buy urea only if we also buy NPK. This
government decision really caused us an extra burden," Januri said in
the presence of some of his friends.
The complaints about difficulties in obtaining urea fertilizer also
came from the farmers in some other areas like Wlingi subdistrict,
where some of the farmers are raising rice, Garum and Sutoayan
subdistricts where most of the farmers were raising corn.
Astono, an agriculture information officer in Garum, also confirmed
that the farmers are facing problems in obtaining urea, while also
complaining that actually the farmers did not really need NPK
fertilizer.
"NPK fertilizer is good indeed, but what they really need is urea," he
pointed out.
The farmers, meanwhile, hoped the distributors increased their urea
supplies and that the government would review its decision to also
require the farmers to buy Pelangi NPK fertilizer.
---------------------------------------------------------------
Indonesia palm oil prices down on Malaysia, rupiah
JAKARTA, September 13 (Reuters) - Indonesian palm oil prices were
traded lower on Wednesday, dragged down by losses in Malaysian palm
oil futures and a firm rupiah.
At the state marketing centre in Jakarta, crude palm oil was traded
lower at 4,162 rupiah ($0.457) per kg from 4,198 rupiah on Tuesday.
"A fall in Malaysia and a stronger rupiah put pressure on local
prices," a Jakarta-based trader said.
The benchmark third-month November <KPOX6> contract on the Bursa
Malaysia Derivatives exchange in Kuala Lumpur was down 12 ringgit at
1,526 ringgit a tonne ($415.6) at the lunch break and later closed at
1,527 ringgit in the evening.
The rupiah was quoted at 9,110 per U.S dollar on Wednesday, compared
with 9,155 on Tuesday.
Lack of support has weakened trading interest in North Sumatra's
Medan, the main port for palm oil exports, traders said.
In Medan, crude palm oil was traded lower at 4,103 rupiah per kg,
compared with 4,210-4,220 rupiah on Tuesday, with 500 tonnes of the
commodities changing hands.
"Offers were limited as Malaysia continued to fall. Sellers are likely
to remain on the sideline waiting for a correction," a Medan-based
trader said.
In Jakarta, olein was traded lower at 4,750 rupiah per kg, compared
with 4,775 rupiah on Tuesday.
On the exports front, sellers offered October shipments at $425 a
tonne, while bids stood at $420. There were no offers nor bids for
September shipment.
---------------------------------------------------------
Vietnam Rice-Prices stable before Indonesia tender
HANOI, September 13 (Reuters) - Vietnamese rice export prices
stabilised this week before Indonesia opens a tender next week to buy
210,000 tonnes of the grain, traders said on Wednesday.
They said state-run Vietnam Southern Food Corporation (Vinafood 2) and
two other export firms would bid at the Sept. 18 tender.
"Before Indonesia announced the tender, Vinafood 2 already started
building stock, buying 200,000 tonnes of rice on domestic markets," a
trader in Ho Chi Minh City said.
"Prices therefore will be stable even when Vietnam wins the tender," he added.
Indonesia said it was seeking the 15-percent broken rice from either
Vietnam or Thailand, the world's top rice exporters, for deliveries
between Oct. 1 and Nov. 15.
Vietnam is more likely to win the bulk of the tender, as its
15-percent broken rice was being offered this week at $255-$257 a
tonne, free-on-board Saigon Port, compared with $295 a tonne for Thai
grain of the same grade.
Vietnam's 5-percent broken rice was put at $265-$268 a tonne, little
changed from $265-$267 last week and also below a price set by the
Vietnam Food Association of $277 a tonne <RICE/ASIA1>.
The 25-percent broken grain, the most common grade for export, stood
unchanged at $242-$250 a tonne.
PEST DAMAGE
But traders said Vietnam's rice stock may become very thin by the end
of this year because pests have damaged several areas in the Mekong
delta food basket.
Agricultural officials say the rice grassy stunt virus has been
rampaging and farmers should either skip or reduce the planting area
of their third crop this year to clean up fields before growing the
winter-spring key crop.
The Agriculture Ministry said the delta's paddy output would fall by 1
million tonnes this year due to pests.
"But Vietnam could raise its stock with the grain grown in Cambodia,"
another trader in Ho Chi Minh City said.
Farmers in An Giang and Dong Thap provinces, Vietnam's key rice
growing areas which border Cambodia, have been planting rice on the
Cambodian land and their supply is expected to offset part of the
output damaged by pests, industry officials said.
Vietnam's rice exports in the first eight months of this year fell 7.5
percent on a year earlier to 3.82 million tonnes.
This week two vessels are loading a combined 36,500 tonnes of rice at
Saigon Port for Africa. Five other vessels have left the port for
Africa, the Philippines and Malaysia with 62,600 tonnes.
The government has curbed rice exports by 500,000 tonnes, saying
exporters have contracts to ship 4.5 million tonnes. Hanoi had
initially targeted to export 5 million tonnes of rice this year.
But industry officials and traders said the government could raise the
export volume when trade and agriculture officials meet during the
last quarter to review grain production.
--------------------------------------
Dow Jones Newswires
September 13, 2006
China-Tariff Discord Escalates
By JOHN W. MILLER
BRUSSELS -- The U.S., the European Union and Canada are set to file a joint
complaint with the World Trade Organization against China's import tariffs on
auto parts, said people familiar with the matter.
The complaint, which could be filed as soon as this week, marks the first
time the Western allies have teamed up to seek a formal investigation by the
global trade body in a dispute with the Asian giant.
In March the three governments filed a preliminary complaint against Chinese
protection of its auto-parts manufacturers. In negotiations with the
governments, China has refused to change its protectionist policy, which charges an
average 25% levy on imported auto parts. That leaves formal complaint as a last
recourse at the WTO for Washington, Brussels and Ottawa.
"We have long voiced our concern and disquiet with the Chinese on this
issue," said European Commission spokesman Peter Power. The U.S. exported only about
$540 million of auto parts to China last year, a market estimated at $19
billion. The EU says its auto-parts exports to China are valued at about €3
billion, or roughly $4 billion.
The complaint could result in punitive special tariffs being imposed on
Beijing.
The Chinese delegation to the WTO in Geneva didn't immediately return calls
seeking comment.
The issue will likely be discussed at a regular WTO meeting on trade disputes
scheduled for Sept. 28, the people familiar with the matter said. Complaints
from WTO members need to be filed two weeks before the monthly gatherings.
China exempts companies with factories in China -- such as General Motors
Corp., Volkswagen AG and DaimlerChrysler AG -- from paying the tariff only if
they buy at least 40% of their parts from local producers.
In trade terms, such "local content" requirements violate free-trade rules
China pledged to meet when it joined the WTO in 2001. The rule handicaps foreign
auto-parts suppliers competing for a share of the four million autos made
every year in China.
Auto makers say they have difficulty finding enough local providers who can
meet their standards.
DaimlerChrysler, for instance, began making the Mercedes E-Class in Beijing
in December. The auto maker says it would like to avoid the tariffs by using
local suppliers. "We're still looking for local providers who meet our standards
so we can get to 40%," said Trevor Hale, a spokesman for DaimlerChrysler in
China.
General Motors said recently that it would stop production of its Buick
Royaum model in China partly because importing parts had become too expensive.
Others worry that setting up in China to meet local-content requirements
ultimately invites piracy. Finland's prime minister said at a EU-China business
summit in Helsinki yesterday that European companies were afraid of investing in
China for fear their "expensive and hard-won technology" would be copied.
The joint move follows the EU's adoption of a tougher line on Chinese
imports. Last month, the European Commission asked EU members to approve tariffs of
16.5% on imports of certain types of leather shoes from China.
EU members are divided on that issue. Shoe-producing countries like Italy
want the tariffs. They are opposed by governments like the U.K. and Ireland that
are standing up for European retailers who book healthy profits on selling
inexpensive Chinese goods.
Chinese exports to the EU had risen to €158 billion in 2005 from €74 billion
in 2000, according to statistics agency Eurostat. Imports into China from the
EU increased to €52 billion from €26 billion over the same period.
------------------------------------------
Joyo Indonesia News Service
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