CHINESE N356EX

BEIJING/TOKYO - China, the engine of world economic growth in recent years, saw industrial output growth shrink to a record low at the start of the year, but a continued surge in bank lending in February spurred optimism the economy could rebound soon.
Chinese officials have rushed cash to big infrastructure projects, from railways to power plants, but are still struggling to fill a vacuum left by a collapse in exports, which plunged 25.6 percent in February from a year earlier.


"Worse-than-expected exports growth is having a clear impact on overall activity growth," Yu Song and Helen Qiao, economists at Goldman Sachs, said in a note.
Mitsubishi UFJ Financial Group, Japan's biggest bank, was the latest large bank to shore up a capital base depleted by a tumbling stock markets. It raised nearly $1 billion from a sale of preferred securities. The issue will put MUFJ's total fundraising at about 1.3 trillion yen ($13 billion) since last year, which includes new stock and a subordinated loan.

The global economy may shrink 1-2 percent this year, World Bank President Robert Zoellick said, as revised Japanese data confirmed the world's No. 2 economy suffered its deepest slump since the oil shock of 1974. The latest grim snapshot of the world economy highlights the need for urgent action as G20 finance chiefs prepare to meet in Britain, but doubts have emerged over whether they will make much headway due to divisions above how best to fight the downturn.


"We haven't seen numbers like that since World War Two, which really means the Thirties. So these are serious and dangerous times," Zoellick told Britain's Daily Mail.
Asian share markets mostly fell, as a burst of optimism fuelled by Citigroup revealing it had been profitable for the first two months of the year proved short lived.
In export-driven Japan, companies such as Toyota Motor Corp and Sony Corp have been aggressively scaling back production and cutting jobs to cope with collapsing demand.


Revised data on Thursday showed the economy shrank 3.2 percent, or an annualised 12.1 percent, in October-December, slightly less than the initial estimate.
A rise in inventories led to the slight revision, but analysts said that was nothing to cheer as it reflected slowing demand both at home and abroad and not companies' appetite to produce more.
"The data confirm that Japan's economic state is quite severe. We see a sharp decline in exports, which puts Japan in a bad situation because exports are falling everywhere," said Seiji Adachi, senior economist at Deutsche Securities. The Nikkei average fell 2.4 percent, after surging nearly 5 percent in the previous session alone, while the broader Topix plumbed its lowest close in 25 years. Mitsubishi UFJ fell 3.7 percent.
STIMULUS WORKING?
China's annual industrial output growth slowed to 3.8 percent in January and February, the slowest pace on record and down from 5.7 percent in December, the National Bureau of Statistics said.
The confidence repeatedly voiced by Chinese leaders that the economy is on the cusp of recovery has been underpinned by phenomenally strong growth in bank lending since late last year, a trend that continued in February.
With 10 months to go in 2009, China is already more than halfway towards reaching its goal of at least 5 trillion yuan in new bank lending.
Finance ministers from the G20 group of rich nations and emerging powers meet this weekend in Britain to prepare for a summit in London on April 2.
Ahead of the meeting, the United States and Britain called on leading economies to ramp up spending to break the recession. But the emphasis on economic stimulus has been met coolly by many European nations, who are more focused on regulatory reform.
"What we're seeing happen around the world now is without recent precedent," U.S. Treasury Secretary Timothy Geithner said on Wednesday, adding he wanted the G20 to "put in place the kind of substantial, sustained commitment to stimulus necessary to lay the foundation for recovery".
355 EX-BILLIONAIRES
Governments are pumping money into their economies and central banks have been slashing interest rates in an effort to mitigate the severity of the recession.
The Bank of Korea had cut its base rate by a total of 3.25 percentage points since early October, but on Thursday held rates steady at a record low 2 percent, saying the fall to 11-year lows of South Korea's won currency had been a factor.
South Korea said on Thursday it would spend additional $4.2 billion to stimulate consumption Asia's fourth-largest economy.
New Zealand's central bank cut interest rates by 50 basis points to an all-time low of 3 percent and said it saw the economy bottoming in mid-year.
Across the Tasman Sea in Australia, one of the few developed countries not yet officially in recession, unemployment jumped to 5.2 percent in February, its highest rate in almost four years.
"This is not good news as it is likely to dent consumer sentiment," said Scott Haslem, chief economist at UBS.
Another measure of the impact of the crisis was provided by Forbes magazine's annual survey of the world's billionaires, who have collectively seen $2 trillion wiped off their net worth.
A total of 355 people dropped off the Forbes list, with names ranging from former Citigroup chief Sanford "Sandy" Weill to alleged Ponzi scheme mastermind Allen Stanford joining the ranks of ex-billionaires.