Estimates show a foreign trade surplus of 2.3 billion euros (1 euro equals about 1.54 U.S. dollars) for the 15-nation euro zone in April 2008, bouncing from a deficit of 1.5 billion euros in March, the EU’s statistical office Eurostat reported Tuesday.    However, the estimate gives a deficit of 15.4 billion euros for the 27-member European Union (EU) in April, compared with a deficit of 12.9 billion euros one year ago.

    In March 2008, the EU had a deficit trade balance of 20.8 billion euros, compared with a 10.5 billion deficit in March 2007.

    Meanwhile, in April 2008, seasonally adjusted exports for the euro zone rose by 6.2 percent and imports by 3.6 percent, compared with March 2008. The growth rate was 5.1 percent and 1.4 percent respectively for EU in the same period,

    According to Eurostat, the EU’s trade with most of its major partners grew in the first quarter of this year, with the exception of Japan and the United States.

    The largest increases were recorded for exports to Russia (25 percent) and Brazil (20 percent), and for imports from Russia (28 percent) and Norway (22 percent).

    In terms of the total trade of EU member nations in the first three months this year, the largest surplus was observed in Germany, with 50.4 billion euros, followed by the Netherlands (10.9 billion).

    Britain registered the largest deficit of 34 billion euros, followed by Spain at 26.7 billion, France at 14.5 billion and Greece at 9 billion euros worth of deficits.

Britain became the world’s largest arms exporter last year, overtaking the United States, the Financial Times reported Wednesday, quoting government figures.    Britain won 10 billion pounds (about 20 billion U.S. dollars) of new defense orders in 2007 from overseas, giving it a 33 percent share of the world export market, according to figures released Tuesday.

    British export orders for 2006 totaled 5.5 billion pounds (some11 billion dollars).

    ”As demonstrated by this outstanding export performance, the UK has a first class defense industry with some of the world’s most technologically sophisticated companies,” Trade and Investment Minister Lord Jones was quoted as saying.

    In 2007, Saudi Arabia and the United States topped the nations on the British arms exports list, according to data from the Defense and Security Organization (DSO), set up by the Trade and Investment Department to promote arms exports.

    However, it did not provide details for other countries for 2007 or year-or-year comparisons.

    Last year’s orders mean Britain has been the second largest exporter of arms over the previous five years, after the U.S., according to DSO figures.

    Cumulative exports from the U.S. over the last five years totaled 63 billion dollars, compared with Britain’s 53 billion dollars during the same time.

The 18-month outlook for the banking industry and ratings for the banking systems in China, including the mainland, Hong Kong and Taiwan, remained stable, Moody’s Investors Service said in a report Tuesday.    Speaking at a media briefing in Hong Kong, Deborah Schuler, senior vice president of Moody’s Asian Financial Institutions, said the sub-prime crisis and the ensuing credit crunch had been relatively minor issues for the banking industry in North Asia.

    ”Asia’s sub-prime exposures have been small and the exceptionally strong levels of earnings recorded for 2007 have kept losses well contained,” she said, citing mitigating factors such as strong growth of the Asian economies, limited involvement of the banks in the global capital markets and their generally healthy financial conditions.

    The industry outlook for South Korea is negative due to challenges posed by liquidity management and slower economic growth, but the South Korean bank ratings outlook was stable.

    Nevertheless, banks in the region will face increasing challenges due to unfavorable global environment, which has been troubled by the credit tightening, the sub-prime fallout, the global economic slowdown, inflation and high prices for oil and food, etc.

    Greg Bauer, managing director of Moody’s financial institutions group, said he expected the impact of the sub-prime fallout to extend further along the chain.

    There might still be uncertainties ahead in terms of inflation, although it is likely to relieve in the coming months for China, said Thomas Byrne, senior vice president of Moody’s sovereign risk unit, adding that the situation was not likely to have a significant impact on the Chinese economy as a whole.

    Aninda Mitra, vice president of Moody’s sovereign risk unit, said the international oil prices were likely to make a challenge by staying at 130-140 dollars a barrel.

    Schuler said she expected volatility ahead for the financial market.

    The financial fundamentals of banks on the Chinese mainland have improved due to recapitalization and reductions in bad loans. Their capacity to stand potential risks have improved but it was yet to be seen how much they have improved because the banks had seldom experienced any economic downturn yet, she added.

    The banking system in Hong Kong benefited from very experienced management, although the banks in the city “are close to, if not at the top of the credit cycle,” whereas on the Taiwan island, the macro-economic environment was stable.

    The banking system in Mongolia was benefiting from a resources-driven boom.

    But the year 2009 would be difficult for banks in the region, with the coming 18 months expected to mean slower loan growth and a moderate increase in non-performing loans for the banking industries.

    While the banks in some Asian economies, like those in China, will manage in 2008 to exceed the record earnings of 2007, higher funding, operating and credit costs were likely to take a bite out of their income in 2009.

    The region’s very high levels of single-borrower concentrations have also increased asset quality risk, Schuler said.

    ”In 2009 we are not expecting them to lose money, but we do expect them to struggle,” she said.

China is not only learning from the experience of U.S. macro economy management, but also is drawing lessons from the current U.S. financial turbulence, China’s top banker told reporters here Tuesday.    ”China is the world’s largest developing country and the United States is the world’s most advanced economy. China always hopes to draw lessons from the U.S. experience in macro economy management and market development. However, during this time of discussion, we are also interested in drawing lessons from the U.S. financial turbulence,” Zhou Xiaochuan, governor of the People’s Bank of China, told reporters on the sidelines of the ongoing 4th Sino-U.S. Strategic Economic Dialogue, or SED, in Annapolis, Md.

    Zhou said the first session of the SED focused on how China and the United States address the problems in each other’s economy and

    financial markets, including financial turbulence and commodity price hike.

    ”We discussed issues like what is the most effective policy to manage this business cycles? what kind of the role can monetary and fiscal policy play in coping with the financial fluctuation? What kind of the role can exchange rate play in maintaining the world’s financial stability?” he said.

    Aside from the issue of financial and macro economic management, the June 17-18 SED will also address issues of developing and protecting human capital, the benefits of trade and open markets, enhancing investment, and advancing joint opportunities for cooperation in energy and environment.

    The meeting is co-chaired by visiting Chinese Vice Premier Wang Qishan and U.S. Secretary of Finance Henry Paulson who act as special representatives of the state leaders of the two countries.

    Participants of the two-day meeting include minister-level officials and other senior officials from the two governments.

    China and the United States will sign a 10-year cooperation agreement on energy and environmental protection after the meeting.

China’s spending on fixed assets such as factories and warehouses grew 25.6 percent year-on-year in the first five months, as investment momentum continued to slow down.    The figures released by the National Bureau of Statistics yesterday is below the 25.9 percent increase in the same investments during the same period last year and is also lower than the 25.7 percent growth during the January- April period.

    Investment growth was “sluggish”, given that the government shortened a holiday from a year earlier, Goldman Sachs economists Liang Hong and Song Yu said in a research note.

    The slowdown came after the government adopted a slew of austerity measures to prevent the economy from overheating. Analysts say given the increased investments on the infrastructure of the snowstorm-hit area, the real slowdown is higher than the statistics suggest.

    The total fixed-asset investments amounted to 4.03 trillion yuan in the first five months, of which 951.9 billion yuan went to the real estate sector, representing a 31.9 percent growth year-on-year.

    Overseas investors have contributed to the slowdown, as rising costs and strong renminbi are squeezing profit margins in the nation, said Shen Minggao, an economist with Citigroup.

    Investments by Hong Kong, Macao and Taiwan enterprises rose only 14.1 percent year-on-year in the first five months. Foreign investment expanded 16.7 percent. Both figures are weaker than that of the January-April period. Meanwhile, domestic companies’ investment on fixed assets climbed 27.1 percent during the period.

    Previous reports said about one-third of Hong Kong- and Taiwan-funded companies in the Pearl River Delta region had planned to pull out of the region, facing rising costs. In March, it was reported that a group of South Korean companies had closed down their operations in Shandong province, also due to cost pressure.

    ”Such change probably suggested that rising production costs have deterred some overseas investors,” said Shen, adding “the signs of slowing growth could reduce the odds for the government’s tendency for rate hikes in the rest of the year”.

    The number of new projects has been rising, up to 84,368 in May, up from 59,676 in April. This sudden flood of new projects may continue in the months to come, as the nation continues to invest heftily in reconstruction in the earthquake-stricken areas.

The U.S. motor giants General Motors Corp. and Ford Motor Co. signed 1.8 billion U.S. dollar contracts with China for more exports, Xinhua learnt from the two companies’s Beijing branches on Tuesday.    According to the deals separately signed in Washington on Monday, GM will export 1 billion U.S. dollar worth of component kits, machinery, equipment and fully assembled vehicles including the luxury Cadillac brand to one of its Chinese partners, Shanghai General Motors, through 2010.

    Ford will sell more than 30,000 North American-built vehicles and will supply transmission components and parts to its joint venture, Changan Ford Mazda Automobile Co. Ltd. as of 2009, in a deal worth 800 million U.S. dollars.

    The two contracts were signed on the eve of the fourth round of Sino-U.S. Strategic Economic Dialogue (SED), a biannual meeting aiming to discuss long-term strategic issues in bilateral trade relations.

    China is gradually showing potential in its luxury car market with its rising car ownership, said G. Richard Wagoner, GM’s Chairman and Chief Executive Officer (CEO). The new pact manifested GM’s determination to keep its leading position in the Chinese market, he said.

    The world’s largest motor maker exported over 4.2 billion U.S. dollars worth of automobile products to China through its joint venture in the country over the past 11 years.

    Ford China’s CEO Robert J. Graziano said the export of North America-built vehicles is among steps to expand market share in China. The new models will diversify product mix in China to meet the varied needs by Chinese consumers, he said.

    GM has a total of eight joint ventures in China and has been the leading foreign joint venture by sales in China since 2005.

    Buick is GM’s most popular brand in China, the world’s second largest new car market.

    Ford’s Chinese sales rose 30 percent in 2007, and the Ford Focus was one of the 10 best-selling cars in the country.

Deteriorating levels of service by airline staff has pushed overall satisfaction with U.S. carriers to the lowest level in three years, a new study showed.    Alaska, Continental and JetBlue airlines scored highest in customer satisfaction, according to the study released on Tuesday.

    For a fourth consecutive year, JetBlue Airways ranks highest overall, and also tops the low-cost carrier segment for a third consecutive year, according to the J. D. Power and Associates’ 2008 North America Airline Satisfaction Study.

    JetBlue performs particularly well in six of seven customer satisfaction measures: aircraft; boarding/deplaning/baggage; check-in; cost and fees; flight crew; and in-flight services, according to J. D. Power, a global marketing information services company.

    Alaska Airlines and Continental Airlines are tied for the highest ranking in the traditional network carrier segment.

    Alaska performs particularly well in five of seven measures: aircraft; boarding/deplaning/baggage; check-in; flight crew and reservation, while Continental scores in the cost and fees measure, said Sam Thanawalla, director of the global hospitality and travel practice at J. D. Power and Associates.

    ”While nearly all of the carriers in both segments experience declines in satisfaction since 2007, Alaska Airlines has managed to improve, particularly in satisfaction with the overall check-inexperience,” Thanawalla said. “Alaska Airlines and Air Canada are the only two carriers that improve overall in 2008, which is a particularly impressive feat in the current volatile industry environment.”

    The study is based on responses from 19,701 passengers who flew on a major North American airline between April 2007 and March 2008.

    Overall customer satisfaction was based on performance in seven measures (in order of importance): cost and fees; flight crew; in-flight services; aircraft boarding/deplaning/baggage; check-in and reservation.

    Carriers are ranked in two segments: low-cost and traditional network. Low-cost carriers are defined as airlines that operate single-cabin aircraft with typically lower fares, while traditional network carriers are defined as airlines that operate multi-cabin aircraft and use multiple airport hubs.

    The study found that satisfaction with “people” factors — including knowledge, courtesy and helpfulness of reservation and gate agents, check-in staff and flight crew — has declined dramatically since 2007, and is the leading contributing factor to the overall decline in customer satisfaction with airlines in 2008.

    The decrease in satisfaction with people factors is more than twice as large as the decline in satisfaction with price factors, according to the study.

    ”In this unstable industry environment, it is critical that airlines invest in their employees as a means to enhance the customer experience, as there is a strong connection between employee satisfaction and customer satisfaction,” Thanawalla said.

Wall Street ended mixed Monday as oil prices retreated from a fresh record high and the quarterly report from Lehman Brothers revived hope for the financial sector.    Crude oil prices hit a new record high of 139.89 U.S. dollars a barrel before retreating to settle below 135 dollars a barrel. Stock gained as traders followed the falling of the oil prices. Meanwhile, the Lehman’s quarterly report offered more insights into its financial situation, helping to push the financial sector higher.

    Stocks fell earlier after the New York Federal Reserve Bank’s Empire State index indicated that manufacturing activity in New York State continued to weaken in June. The index fell to a negative 8.7 from a negative 3.7 in May.

    General Electric, AT&T and Verison Communications retreated as analysts said a weakening economy may hurt their profits. But Sirius and XM jumped after U.S. Federal Communications Commission Chairman Kevin Martin recommended the approval of Sirius’ purchase of XM after the companies agreed to certain conditions. Strong performance in technology shares helped Nasdaq to gain the most.

    The Dow Jones fell 38.27 to 12,269.08. Broader indexes rose after trading lower. The Standard & Poor’s 500 index edged up 0.11to 1,360.14, while the Nasdaq rose 20.28 to 2,474.78.

OPEC weekly prices approach $130 

FedEx Corp. reported a fourth-quarter loss Wednesday and offered a gloomy outlook due to soaring fuel costs and weak economy.

FedEx posted a loss for the just-ended fourth period of 78 cents a share, or 241 million U.S. dollars, compared with a profit of 610 million dollars, or 1.96 dollars per share, for the same quarter last year.

The company predicted 2009 earnings of 4.75 dollars to 5.25 dollars per share, well below Wall Street expectations of 5.92 dollars a share.

“The weak U.S. economy, particularly in housing, in automotive and financial services, dampened volume growth and substantially affected our bottom line,” FedEx chairman Frederick W. Smith said.

Smith said, however, FedEx was confident it could deal with the economy’s troubles by holding down expenses, limiting capital spending and growing the company’s international business.

Morgan Stanley said on Wednesday its quarterly profit fell 61 percent due to the credit crisis.

The No. 2 U.S. investment bank said its second-quarter profit was 1.01 billion U.S. dollars or 95 cents per share, compared to 2.57 billion dollars, or 2.45 dollars per share a year earlier.

Revenue dropped to 6.51 billion dollars from 10.52 billion dollars last year.

Morgan Stanley’s CEO John Mack said the market’s dislocation and fallout from the credit crisis were to blame for the decline.

Morgan Stanley, which reported its first loss as a public company in the fourth quarter, is the last of three U.S. investment banks to report results for the period ending March 30.

Earlier this week, Lehman Brothers Holdings Inc. posted 2.8 billion dollars loss, while Goldman Sachs Group Inc. said Wednesday its profit fell by 11 percent.