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China creates investment fund
in credit to its Southeast Asian currency exchange agreements commitment to extending Asean
neighbours. The country will with Indonesia, South Korea, Hong cooperation in the region.
thereby extend its influence as the Kong and Malaysia. Macquarie Securities Ltd. and
region battles against the world- “China is going to take the China International Capital
wide economic crisis. opportunity of this crisis to further Corporation project an expansion
The investment fund is designed establish itself in Asia,” commented in the Chinese economy of eight
to support infrastructure develop- Huang Jing, an academic at the percent this year. The World Bank
ment associating China with the 10 National University of Singapore’s has made a more cautious predic-
members of the Association of Lee Kuan Yew School of Public tion of 6.5 percent growth – still
Southeast Asian Nations. It is Policy. “All this will have a huge way ahead of anything in the
anticipated the loans will run for political and diplomatic impact in West.
between three to five years, accord- the region, in addition to the eco- The Chinese initiative is seen as
ing to a statement issued by the nomic impact. providing Asean countries with a
Chinese Foreign Minister Yang “Asean leaders hope China could viable alternative to borrowing
Jiechi. play an important role in pushing through the auspices of the
The proposals from the world’s forward cooperation in East Asia, International Monetary Fund or
third-largest economy should help and with other countries overcome the Asian Development Bank. The
© Hangyanyee
speed recovery from the global the difficult times,” Foreign painful memory of the IMF’s
China plans to create a $10 billion situation and extend China’s eco- Minister Yang continued. The pro- stringent conditions imposed dur-
investment cooperation fund, with nomic power in the area. The posals are interpreted as an indica- ing the 1997-98 regional financial
a potential offering of $15 billion country has recently signed tion of the Chinese government’s crisis are still fresh.
Expat home owners
Credit Suisse in US
hit by negative equity offshore clampdown
Seven out of 10 expats who own a presents unprecedented and unex-
Suisse’s Private Advisors sub-
property in the UAE would lose pected implications for these
sidiary, which will subsequently
money if they were forced to sell at expatriate owners. It is especially a
report the details to the US tax
present, a new study of the proper- time for concern given the current
authorities, or they can simply
ty problems facing 465 foreign resi- finance options in the marketplace
write the customers a cheque.
dents has revealed. and laws relating to bad debts,”
It appears the bank is only
Market research firm Real continued Healy.
applying this new ‘zero tolerance’
Opinions found that four out of 10 “For those property investors
policy in individual cases at the
UAE expats had bought property in finding themselves in negative
moment. An extension of the
the Emirates. A significant propor- equity, job security will be impera-
strategy to involve a more general
tion – 22% - had purchased their tive in order to ride out this dip in
withdrawal from the US offshore
property off-plan and were faced the market,” he added.
business is currently under review.
with the prospect of making fur- The study indicates that the
“Credit Suisse sticks to all valid
ther payments. majority of the expat community © Mrphoto |
rules and regulations in various
Dan Healy, CEO of Real in the UAE believe it may well take
Swiss bank Credit Suisse has countries,” said a spokesman for
Opinions, observed that 25% of 18 months for the country to
begun closing down the offshore the bank.
those surveyed indicated they recover from the recession. This
accounts of American clients who The development comes after
would struggle to make the next perspective was tempered by the
have not declared the money to rival UBS announced it would
payment. This highlighted the recognition that the downturn
the US tax authorities. stop offering offshore services to
importance of job security in the was on a global scale and employ-
The bank apparently has US citizens after the American tax
area, Healy added. ment prospects would not neces-
approximately 2,500-5,000 US authorities alleged the Swiss bank
The research comes in the wake sarily be better elsewhere.
customers with undeclared off- has helped wealthy Americans
of a previous study by the same “There is still strong loyalty
shore accounts worth an alleged 3 conceal assets in Swiss accounts.
company showing that one in four and the belief that the UAE will
billion francs. Credit Suisse is in the process
respondents believed it was likely top the list of countries world-
Credit Suisse has started the of writing to its north American
they would either lose their job wide that will emerge quickly
process of parting company with customers holding Swiss accounts,
during the course of the coming and economically stronger,
its north American offshore requesting them to sign docu-
year, or were already out of work. matched by Saudi Arabia and
clients. The bank is offering one mentation which would reveal
“Seven in 10 now believe they followed closely by Qatar,” Healy
of two options: either they can their identity to the US tax
are in negative equity and this concluded.
transfer their funds to Credit authorities.
April 2009 Investment International
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