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China: Key Part of Starbucks' Asia Growth Strategy

Starbucks is focusing on growing in existing markets after years of entering two to four new countries annually. While the international unit expands in China, Russia and Brazil, the Seattle-based chain expects to save as much as $550 million this year by cutting labor costs and reducing leftover food and coffee at its stores.

Starbucks Corp., the world's biggest coffee-shop operator, will keep China as a key part of its Asia growth strategy and has no immediate plans to enter India, the head of the company's international unit said. "China clearly is a huge opportunity for us, today and into the foreseeable future," Martin Coles, president of Starbucks Coffee International Inc., said in an interview in Seoul. "We certainly have aspirations to have operations in India, but this is not something that is on the front burner and about to happen." Starbucks opened its first store in China in 1999 and had an outlet in the Forbidden City until it was closed in July 2007, after an anchor at state broadcaster China Central Television spurred popular protest by criticizing the shop on his blog. The company now has 690 outlets in China and Taiwan, according to its Web site. "We are nowhere near any degree of saturation in the markets that we serve internationally," said Coles, who helms the company's operations outside the U.S. "We will enter India when we are ready to enter India." Canada, Japan and the U.K. also provide "solid growth prospects" for Starbucks, he said. The company's Chief Financial Officer Troy Alstead said in March that talks with possible licensees and joint venture partners in India "didn't come together." 16,700 Cafes Starbucks had more than 16,700 cafes as of the end of June, including about 5,460 locations outside the U.S. The company plans a net addition of about 380 stores overseas in the fiscal year ending in September, compared with a net reduction of more than 400 locations within the country, according to a July 21 statement. The company gets about one-fifth of its revenue from its international operations. Sales at overseas locations open at least a year fell 2 percent in the quarter ended June 28, compared with a 6 percent decline at U.S. locations, it said in the same statement. Currency fluctuations were mostly responsible for an 11 percent decrease in quarterly overseas revenue, compared with a 6.5 percent decline for the U.S. market, Coles said. Still, the international business is "robust" as operating margins expanded to 7.2 percent from 6.6 percent, he said. Coles denied an Edaily report yesterday that said Starbucks would introduce its Via instant coffee in Asia next year. The company plans to start selling the blend across the U.S. in a year, he said. Starbucks began offering Via in Seattle and Chicago area shops in March to tap the $17 billion global instant-coffee market, which accounts for 40 percent of all cups. In the U.K. and Russia, instant represents more than 80 percent of all coffee made.

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Gold Increased for Second Day

Gold for immediate delivery gained 0.5 percent to $941.97 an ounce at 1:22 p.m. in Singapore. Eighteen of 32 traders, investors and analysts surveyed by Bloomberg News, or 56 percent, said bullion would gain this week as investors seek a hedge against inflation. Eleven forecast lower prices and three were neutral. The MSCI Asia Pacific Ex Japan Index gained for a fifth day today on U.S. housing starts data. A Conference Board index of U.S. leading economic indicators due today probably increased 0.5 percent in June, after a 1.2 percent increase in May.

Gold gained for a second day in Asia as higher oil prices and a weaker dollar prompted investors to seek the precious metal as a store of value. Oil rose for a fourth day as equities advanced and a weaker dollar encouraged investment in commodities. The dollar traded near a two-week low versus the euro on speculation European and U.S. reports this week will show the global recession is easing, sapping demand for the U.S. currency as a refuge. "A downturn in the dollar is helping to stimulate demand for gold," said Han Sung Min, a Seoul-based manager with the international market division of Korea Exchange Bank Futures Co. "Gains in oil prices, optimism for corporate earnings and an economic rebound are also lending psychological support."

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The G-8 Confronted by Developing Countries

The Group of Eight Summit advanced nations were confronted by leaders of developing countries (China, India Brazil, Mexico and South Africa). They challenged the predominant influence of the U.S dollar, resisting the industrial world's strategy for addressing climate change and authority in the global markets and institutions. The challenge was led by China.

President Barack Obama agreed - "For us to think we can somehow deal with some of these global challenges in the absence of major powers like China, India and Brazil seems to me wrongheaded." "What relevance does the G-8 have to set the agenda on anything for the world anymore?" Goldman Sachs Group Inc.'s London-based chief economist Jim O'Neill said in a Bloomberg Television interview today. The Group of Eight represents 880 million people with a GDP of $32 trillion. The meeting ended with a vow to spend $20 billion over the next three years to aggrandize food production in the developing world and cutting malnourishment from the shocking 1 billion. The G-5 addressed the greenhouse-gas emissions: its goal is to cut emissions by 50 percent by 2050. They agreed that immediate action would quell the economic growth that is currently needed. They will reassess the issue in December 2009. The diversified international currency reserve issue was not issued thoroughly, with German Chancellor Angela Merkel saying it was "of no practical relevance." Brazilian and Russian officials said it may come up again at the wider G-20 forum in Pittsburgh in September.

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Asia Creates another "Silk Route"

As an enormous continent, Asia benefits much from specialization and trade partners. Vietnam, Laos and Thailand now "allow trucks to transit the three countries without having to unload cargo at border crossings" for trans-shipment, according the BBC news. Although the agreement was made ten years ago, it is just beginning to gain popularity and success. The agreement of the three countries to allow the flow of transit will reduce costs and time for regional trade, say the funding agencies.

The "corridor," which is an upgraded highway with the transit agreements in place, goes from Danang, Vietnam, Savannakhet, Laos and Thailand, and recently included Burma and Cambodia. Now, "modern highways [carry] goods, exotic fruits and tourists," said Arjun Thapan, director general of Asian Development Bank, who has been the primer mover behind the corridor idea. The corridor is so efficient that he assures, "You can now set out from Thailand, do business in Laos, and arrive in time for dinner at Danang in Vietnam - all in the space of a single day." In the future, the goal is to connect the Trans-Asia Railway to Singapore, Malaysia, Thailand, Vietnam, Cambodia, Laos China, and maybe even Europe.

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Asian Stocks Plummet

Asian stocks plummeted and sank the MSCI Asia Pacific Index. This caused investors to question the pace of the economic recovery.

Asian stocks plummeted and sank the MSCI Asia Pacific Index. This caused investors to question the pace of the economic recovery. China's biggest oil producer, PetroChina Co, fell 2.6 percent in Hong Kong. The world's third-largest mining company, Rio Tinto Group, fell 3 percent in Sydney. Meanwhile, Toyota Motor Corporation, the No. 1 automaker worldwide, fell 3.4 percent after the yen strengthened. The drop in Asian stocks affected the MSCI World Index by the largest amount in two months. According to Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., "Those who bought stocks on a perception the economy would improve are now selling on reality."

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Global Recession Still Hurting Asian Markets

Economic indicators are showing signs that Asian markets are still in a deep recession.

Economic indicators are showing signs that Asian markets are still in a deep recession. Monthly reports are confirming that business confidence in Japan has plunged to a record low, Chinese manufacturers are still shrinking, and exports in South Korea have fallen for the fifth straight month. According to Bloomberg, economies in Asia, with the exception on Japan, will grow at the slowest pace in 11 years. Central banks in Asia have been working around the clock to develop policies that would stimulate growth, while governments have spent more than $700 billion for the same purpose.

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Asian Stock Markets Received Help from U.S. Government

Asian stock markets received a boost today from news that Citigroup will receive additional backing from the U.S. government.

Asian stock markets received a boost today from news that Citigroup will receive additional backing from the U.S. government. Hang Seng Bank, Ltd., Samsung Electronics, and the MSCI Asia Pacific Index climbed by 4.4 percent, 3.7 percent, and 0.6 percent respectively. The news provided an increase in consumer confidence by reducing the risk that bank failures will occur. Nicole Sze, an investment analyst for Julius Baer & Co noted that "it's a temporary boost in confidence... these banks will not be allowed to fail. The market is insisting that no matter what happens, the government will step in to prop them up".

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Asia : Free Trade Pledge

Asian finance ministers have pledged to boost economic growth in the region by upholding free trade and investments.

Asian finance ministers have pledged to boost economic growth in the region by upholding free trade and investments. Moreover, ASEAN, Japan, South Korea and China have agreed to increase funding for the Chiang Mai Initiative, a fund aimed at protecting foreign currencies.

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Papua New Guinea: LGL to Hit Output Target

Lihir Gold Limited (LGL), a gold company operating in Papua New Guinea, Australia and West Africa, has continued its operations in its Putput plant site.

Lihir Gold Limited (LGL), a gold company operating in Papua New Guinea, Australia and West Africa, has continued its operations in its Putput plant site. The mine was closed on January 24 because of disputes between the landowner groups and LGL. A Memorandum of Understanding was signed on January 30. Even with the disruption, which cost the company more than 12,500 ounces of gold production over five days, LGL is still determined to produce between 770,000 to 840,000 ounces of gold this year.

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CMI Seen Being Re-launched as a Kind of Asian Monetary Fund

China, Japan and South Korea are expected to meet this week in order to discuss the re-launching of the Chiang Mai Initiative (CMI).

China, Japan and South Korea are expected to meet this week in order to discuss the re-launching of the Chiang Mai Initiative (CMI). The Chiang Mai Initiative will act as a kind of Asian Monetary Fund. The CMI currently stands at $80bln, however it has not yet been used due to slow progress on agreements between countries on how it should operate. Asean + 3 leaders are expected to approve the relaunching as well as an increase of up to $150 billion. The money will be used to help Asian nations cope with emergency balance payments during the financial crisis.

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Recession in Asia is Unlikely

Head of the Asian Development Bank Haruhiko Kuroda has said that while growth in Asian economies may slow this year, a recession is unlikely.

Head of the Asian Development Bank Haruhiko Kuroda has said that while growth in Asian economies may slow this year, a recession is unlikely. Inflation is Asia's major concern, with Indian inflation at 11.63%, Vietnam at 26.8% inflation, and Philippines at 11.4%. Taiwan and Vietnam have already raised their interest rates in attempts to combat the rising inflation, but the Korean won and the Indian Rupee have been falling recently with concern that the central bank has not been doing enough in aid.

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