Asia

South Korea tackled one big problem, bank liquidity, after the economic crisis went global in recent months. Now another problem is creating uncertainty: high levels of household debt. South Korea in the past five years has built some of the biggest levels of household debt in the world, The Wall Street Journal reported. Household debt increased to 66% of South Korea's gross domestic product last year from 38% a decade earlier, according to a recent study by the International Monetary Fund. As the economy slows, the high level of household debt could lead to more delinquencies.
Read more
Morimoto Co., a property developer, filed for protection from creditors with 162 billion yen ($1.7 billion) of debt, bringing the number of bankruptcies among publicly traded companies in Japan to a postwar record, Bloomberg reported. The bankruptcy is the second-largest in Japan this year following Urban Corp.’s filing on Aug. 13. The company’s filing with the Tokyo District Court pushed the total in 2008 to 30, the most since World War II, based on information from Teikoku Databank Ltd., a bankruptcy research firm.
Read more
The International Monetary Fund approved a $7.6 billion loan for Pakistan on Tuesday to prevent it from defaulting on its debt and to help stabilize its economy, The New York Times reported. The loan, under discussion for more than a month, at first met strong resistance from the Pakistani government, which sought money on more generous terms from other countries. But Pakistan’s major allies--the United States, China and Saudi Arabia--insisted that it accept the loan and the IMF conditions before they offered assistance.
Read more
China's central bank slashed borrowing costs by the biggest margin in a decade, in a strong signal that government efforts to support the economy didn't end with the announcement of a massive stimulus plan just over two weeks ago, the Wall Street Journal reported today. The move, announced Wednesday, brings the benchmark one-year lending rate down by 1.08 percentage points to 5.58%, with the benchmark one-year deposit rate cut by the same margin to 2.52%, the People's Bank of China said in a statement.
Read more
About 30 percent of Indian industrial metal importers have defaulted on consignments after prices slumped by more than half, the head of a trade body said on Wednesday. "Most of the importers are hit severely. Some importers who had taken bigger risks are not able to clear consignments from the ports," Surendra Mardia, president of the Bombay Metal Exchange (BME), told Reuters in an interview. The BME, with about 500 members, is the biggest association of non-ferrous metal traders in India.
Read more
South Korea's financial watchdog said Wednesday it would set up a task force to advise troubled companies on corporate restructuring to help them ride out the credit crunch, Agence France-Presse reported today. The team of 43 experts will be formed Friday and work for one year, the Financial Services Commission said. South Korea has announced a series of steps to lessen the effect of the global slowdown, including $16 billion in loans to ease a dollar shortage for firms importing raw materials and exporting goods.
Read more
Companies around the world are keen to redeploy labor resources and cut costs to cope with the global downturn, but those operating in China may find that laying off people there will not be as easy as previously, Forbes reported. For the ten-month period from January to October, those who lost their jobs numbered 10.2 million, topping Beijing's forecast for the entirety of 2008 by 2.0%, minister of human resources and social security Yin Weimin said at a press conference Thursday. In response, authorities are clamping down on the freedom to dismiss substantial numbers of workers.
Read more
Japanese builder Daiwa House Industry Co. said it may bid for failed property developer Urban Corp as it seeks opportunities to buy real estate assets brought low by the financial crisis, Reuters reported yesterday. Daiwa, at the head of a consortium of companies that includes Chuo Mitsui Trust Holdings Inc., is currently in the lead to be chosen to take over Urban's assets and oversee its restructuring, a source familiar with the deal told Reuters. Urban filed for court protection from creditors on Aug 13 with 256 billion yen ($2.67 billion) in debt.
Read more
For decades, the steamy Pearl River Delta area of southern Guangdong Province served as a primary engine for China’s astounding economic growth. But circumstances have changed quickly. The slowdown in exports contributed to the closing of at least 67,000 factories across China in the first half of the year, according to government statistics. Labor disputes and protests over lost back wages have surged, igniting fear in local officials. The shutdown of the Weixu shoe factory, called China Top Industries in English, is the latest casualty, the New York Times reported today.
Read more
Despite assurances from the developer, Singapore is looking for ways to avoid ending up with a mammoth unfinished project on a prominent piece of land if U.S. casino operator Las Vegas Sands Corp. is unable to complete a $4.9 billion gaming venture, the Wall Street Journal reported yesterday. Sands said in a filing with the U.S. Securities and Exchange Commission last week that it was in danger of not meeting obligations to its lenders on a $3.8 billion portion of its debt unless it raises capital, cuts spending on developments or increases its Las Vegas earnings by year end.
Read more