As much of the world struggles to clamber out of a serious recession, a gradual flow of economic power from West to East has turned into a flood, The New York Times reported. Beijing’s state-run news media, indulging in a moment of self-congratulation, have hailed China’s new economic prominence as proof of national superiority. The country’s economic miracle, the newspaper People’s Daily boasted last week, exists because its leaders — unlike those in other, unnamed nations — can make quick decisions and ensure underlings carry them out.

In a related story, the Associated Press reported that Japan Airlines Corp. is set to cut about 15,600 jobs, a third of its work force, and reject billion-dollar cash offers from Delta and American Airlines, as it files for bankruptcy and embarks on a government-led turnaround. Under a rehabilitation plan now being hammered out by a state-backed corporate turnaround body, JAL would make the job cuts during the three fiscal years through March 2013, Kyodo News reported.

With property prices soaring in key cities, many investors and bankers worry that China has the next great real estate bubble waiting to be popped, The Washington Post reported. The Chinese government is worried, too. On Sunday, the nation's cabinet, citing "excessively rising house prices" in some cities, said it will monitor capital flows to "stop overseas speculative funds from jeopardizing China's property market." It also said that any Chinese family buying a second home must make a down payment of at least 40 percent.

Two Australian Qantas executives have been held in Vietnam and the former boss of joint venture Jetstar Pacific arrested over losses at the budget carrier, The Australian reported. Qantas executives Daniela Marsilli and Tristan Freeman have not been formally charged but were forced to spend Christmas in Vietnam and are still prevented from leaving the country. The two are part of a team seconded to modernise Jetstar Pacific, 27 per cent owned by Qantas.

Japan Airlines Corp.'s biggest commercial creditor banks have proposed a debt-forgiveness package worth more than $3 billion in a major concession designed to coax a state turnaround agency out of placing the struggling carrier in court-led bankruptcy protection, people familiar with the matter said Thursday. The move by the banks to shield their lending comes as U.S. rival carriers, Delta Air Lines and AMR Corp.'s American Airlines, intensify overtures to take a small but strategic stake in Japan Airlines, or JAL, prized for its access to Asian regional air routes despite its financial woes.

AMR Corp's American Airlines raised its offer to invest in Japan Airlines Corp. by $300 million to $1.4 billion, according to people familiar with the situation, intensifying its battle with rival Delta Air Lines Inc. to forge a partnership with the cash-strapped carrier, The Wall Street Journal reported. American met with JAL executives Thursday morning and sweetened its offer, according to these people. Last month, American, along with members of the Oneworld airline alliance and private equity fund TPG, said it would invest $1.1 billion into JAL.

Shares of Japan Airlines fell more than 4 percent on Wednesday after the Nikkei business daily reported the Development Bank of Japan (DBJ) and the Ministry of Finance are seeking court-led bankruptcy proceedings. Sources told Reuters last week that a government-backed turnaround fund was leaning towards bankruptcy proceedings for JAL as part of its restructuring plan, and was in negotiations with creditors to push such a plan. The Nikkei reported on Wednesday the state-owned DBJ, JAL's largest creditor, favours a pre-packaged bankruptcy option. DBJ declined to comment on the report.

American Airlines is considering sweetening its $1.1 billion investment proposal for Japan Airlines and would be willing to invest in the carrier even if it goes into bankruptcy, an American Airlines executive said. Will Ris, in charge of government affairs at American Airlines told Reuters that American Airlines was ready to invest if it applies for bankruptcy protection or is restructured out of court.

The government-backed body drawing up a proposal to restructure Japan Airlines Corp. hopes to bring in an outsider with no aviation experience as a successor to current Chief Executive Haruka Nishimatsu, according to a person familiar with the matter, The Wall Street Journal reported. If successful, the move would mark the first time that JAL would be headed by an outsider with no aviation experience, underlining the severe degree of change facing the cash-strapped carrier. The Enterprise Turnaround Initiative Corp.

The run-up to New Year is a time to tidy up loose ends in Japan so that in January everything starts afresh. For a fleeting moment, it looked as if the government was doing just that when, after months of indecisiveness, it hinted on December 30th that Japan Airlines might be headed for bankruptcy, The Economist reported in a commentary. But after the shares slumped by 24% to an all-time low on the same day, ministers lost their nerve over sanctioning what could be one of Japan’s biggest corporate failures.