Shoppers browse in a store in Wangfujing shopping district in Beijing in this file photo.

BEIJING, Feb. 19--China’s inflation rate soared to its highest level in over 11 years in January, official figures show.
The rise in consumer prices was driven by an 18.2 percent increase in food costs over the same period a year ago, BBC quoted the National Bureau of Statistics as reporting.
Inflation in China continues to rise despite measures by the country’s leadership, which hopes to keep a lid on the cost of food in particular.
Rising food costs have been blamed on the harshest winter for decades. Massive snowfalls wrecked crops and killed millions of livestock.
But analysts caution that the severe weather is not the only factor behind rising food costs, and warn further increases are likely to be ahead.
The January rate of 7.1 percent was up from 6.5 percent in December--and was the highest figure since September 1996, when consumer prices rose 7.4 percent.
Non-food inflation only crept up in January, rising 1.5 percent over a year beforehand, the official figures showed.
The rise in food costs poses a problem for leaders in a country where such rises are historically linked to social unrest, say correspondents. Measures taken by the government include giving farmers incentives to rear more pigs.
“The consumer price index was mainly driven up by factors including the severe snow disaster that ravaged more than half of the country’s areas,“ the official Xinhua news quoted Yao Jingyuan, the chief economist of the statistics bureau, as saying.
Inflation in China has continued to rise sharply despite a wide range of government measures to keep a lid on prices and rein in the nation’s economy, which expanded at a 13-year high of 11.4 percent in 2007.
As part of those efforts, China last year raised interest rates six times and increased the amount of money commercial banks needed to set aside in reserves 10 times.
But taming inflation became far tougher in China in January due to the weather, which was the coldest in more than half a century, and its effects on inflation are expected to continue to be felt throughout 2008.
“This is not the peak. The peak will probably be in February, because China suffered more in February from the ice and snow storms,“ said Chen Xingdong, a senior economist at BNP Paribas in Beijing. “We all understand that the winter disaster has caused a lot of damage to agricultural crops and transportation.“

Daunting economic challenges confront Europe’s newest country--an impoverished, underdeveloped corner of the continent that experts warn could be a handout-dependent hardship case for years to come.
As Kosovo seeks international recognition of its declaration of independence, the round-the-clock rumble of thousands of portable power generators threatens to drown out the celebratory fireworks. And its problems go far beyond an electricity grid so unreliable that just keeping the lights on can be a daily struggle, AP wrote.
Roads are badly rutted or unpaved. Joblessness runs close to 50 percent, and much of the work force is uneducated. The average monthly salary is a paltry 150 euros ($220).
By virtually every measure, Kosovo joins the family of nations with the dubious distinction of being one of Europe’s poorest.
It doesn’t even have its own international telephone country code: Kosovo shares Monaco’s, a holdover from the days when French Foreign Minister Bernard Kouchner was the top UN administrator here and Alcatel was chosen to develop the phone network.
“Everyone knows it’s going to be hard“, said Alex Anderson, Kosovo project director for the Brussels, Belgium-based International Crisis Group, which keeps tabs on trouble spots in the Balkans.
Kosovo’s late leader Ibrahim Rugova used to present visitors with crystals and other gems offered as proof of its untapped mineral wealth.
Geologists conducting a thorough survey of Kosovo’s resources say the province has vast amounts of high-quality lignite coal. They say it also has deposits of nickel, lead, zinc, bauxite and even small seams of gold that could be tapped in the future. “Kosovo is richer than we
Thought“, said Shpend Ahmeti, executive director of the Policy Analysis Group, a think tank in Pristina.
But officials caution that Kosovo first desperately needs to improve its shoddy infrastructure--battered by its 1998-99 war between Yugoslav forces and ethnic Albanian rebels--if it is to have a decent shot at an economic future for its 2 million people.
The government has been reviewing bids for a 3 billion euros ($4 billion) contract to build a lignite coal-fired power plant that officials say would end the electricity outages. But the plant won’t be fully operational until 2012 at the earliest.
Eight in 10 business owners point to the lack of reliable energy as their biggest obstacle, Ahmeti said--bigger than high taxes or rampant corruption.
For the foreseeable future, an independent Kosovo will remain heavily dependent on handouts from the UN and the European Union, which plans to convene an international donors’ conference in June.
In 2007, the UN budget for Kosovo was 150 million euros ($220 million). Kosovo’s economy was propped up with another 370 million euros ($540 million) in remittances from Kosovars living abroad, according to estimates from the International Monetary Fund--cash the young country probably won’t be able to do without for years to come.
Kosovo also risks a hard economic hit from Serbia, which fiercely opposes its independence bid. About 20 percent of Kosovo’s trade is with Serbia.
Even so, Anderson contends the untold story is Kosovo’s potential, which he thinks is formidable. Its modest metal processing sector is boosting its productivity, “beginning to lead not a revolution but an evolution“, he said.

WASHINGTON,
Feb. 19--The US Federal Reserve this week releases its updated economic forecast likely to show tepid growth for most of 2008 but probably not a recession, thanks to rate cuts and a big stimulus effort.
The forecast set to be released Wednesday along with minutes of the Fed’s Jan. 30-31 monetary policy meeting is part of a new policy set by chairman Ben Bernanke to provide more frequent economic updates, AFP reported.
Bernanke told a congressional hearing last week that the forecast would be lower than the forecast released late last year of a range of 1.8 to 2.5 percent growth on average for 2008.
He told the Senate Banking Committee a $168 billion economic stimulus plan, which aims to boost consumer and business spending, would help lift growth later this year.
“At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt,“ Bernanke said.
In response to a question, Bernanke said the Fed would release its new economic outlook that “will show lower projections of growth, and they’ll be reasonably consistent with what we’re seeing with private forecasters.“
Societe Generale economist, Stephen Gallagher, said he expects a year-over-year growth rate of 1.2 to 1.6 percent for gross domestic product (GDP), which “would be consistent with private forecasts and forecasts of the CBO,“ or Congressional Budget Office.
Gallagher said that even though many private economists are predicting a recession--generally seen as two consecutive quarters of declining activity--he does not see the Federal Open Market Committee (FOMC) making such a forecast.
“Even FOMC members at the weak end of expectations in the October 2007 forecasts might be reluctant to now officially forecast a negative GDP reading, even if they make downward revisions,“ Gallagher said.
Yet the latest Fed forecast--which was provided to policymakers in January--may be stale since it did not take into account the impact of a stimulus plan, according to some analysts.
The Congressional Budget Office last week upgraded its outlook to show 1.9 percent growth in 2008 from 1.7 percent, while lowering its projection for 2009 to show 2.3 percent expansion instead of 2.8 percent.

BANGKOK, Thailand, Feb. 19--Oil prices rose Tuesday in Asia as investors eyed the possibility that OPEC may cut production just ahead of the second quarter, when gasoline demand in the Northern Hemisphere usually becomes the central focus of the market.
An explosion at a 70,000-barrel-a-day refinery in Texas may have also boosted prices, but the primary worry is that the Organization of Petroleum Exporting Countries may cut supplies next month to support prices in a $85-$100 a barrel range, said Tetsu Emori, commodity markets fund manager at ASTMAX Futures Co. in Tokyo, AP reported.
OPEC may do so just ahead of the second quarter when oil prices have started an annual run-up the past five years as people looked ahead to “gasoline demand coming in the spring“, Emori said.
The explosion Monday at the Alon USA refinery at Big Spring, Texas, injured four workers, with one employee hospitalized for burns. All workers were accounted for about an hour after the explosion, according to Blake Lewis, a spokesman for Alon.
Fires caused by the blast were under control but still burning in the afternoon there (early morning in Asia), Lewis said, and the Dallas-based company was waiting for access to the site to investigate the cause of the explosion.
In related news, Norway’s Oil and Energy Minister Aaslaug Haga on Monday said there is no shortage of oil in the world market, backing the view of her counterpart in OPEC-member Saudi Arabia, AFP wrote.
Haga met Saudi Oil Minister Ali Al-Naimi on Sunday during a visit to the kingdom, the world’s largest oil exporter. When asked during a news conference in Riyadh on Monday if she agreed with Naimi’s assertion that the world oil market is well supplied, Haga replied, “We discussed the situation and I agree in broad terms with the view of the Saudi oil minister.“
Norway is the world’s fifth largest exporter of crude. In September last year it produced 2.179 million barrels per day.
The Organization of Petroleum Exporting Countries (OPEC) earlier this month at an extraordinary meeting in Vienna left its official daily output ceiling at 29.67 million barrels of oil.

It will be up to the European Commission to decide whether the genetically modified products should be allowed onto the market in Europe.

BRUSSELS, Belgium, Feb. 19--EU farm ministers failed on Monday to agree whether to allow new strains of genetically modified maize and potato, amid persisting divisions over biotech products.
“There wasn’t a qualified majority either in favor or against“ for the products, a diplomat was quoted by AFP as saying.
As a result, under EU rules it will be up to the European Commission to decide whether the products should be allowed onto the market in Europe.
The commission is likely to decide in favor because it always follows the opinions of the European Food Safety Agency, which says that the five products do not represent a danger.
The ministers considered four strains of maize developed by US group Monsanto, although one is now owned by Swiss company Syngenta. The strains are intended for both animal and human use and are designed to resist disease and parasites.
The fifth product is a variety of potato made by US group BASF, which the company wants to use for animal feed.

SEATTLE, USA, Feb. 19--Microsoft Corp plans to invest heavily in web search to compete against Google Inc, even if it fails to acquire Yahoo Inc, the company’s chairman Bill Gates said on Monday.
Gates, who called Microsoft’s offer for Yahoo “very fair,“ said Google is the only company with “critical mass“ in web search. Microsoft needs a bigger piece of the market to create a more competitive and profitable web search business.
“We can afford to make big investments in the engineering and marketing that needs to get done. We will do that with or without Yahoo,“ said Gates in an interview with Reuters.
“But we also see that we’d get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort,“ said Gates, who is Microsoft’s biggest shareholder.
The two companies are at a stand-off in Microsoft’s $41.7 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo’s board rejected, saying it undervalued the company.
Microsoft countered by saying its offer was “full and fair,“ but did not say what it planned to do next. Analysts expect Microsoft to sweeten its bid, possibly to $35 a share, to clinch a deal.

KUALA LUMPUR, Malaysia, Feb. 19--Foreign investment in Malaysia’s manufacturing and services sectors soared 69 percent to a record 44.2 billion ringgit ($13.7 billion; 9.4 billion euros) last year but that growth rate may be untenable amid global economic uncertainties, Trade Minister Rafidah Aziz said Tuesday.
The ministry approved 33.4 billion ringgit ($10 billion; 6.8 billion euros) in foreign manufacturing investment last year, up 65 percent from 2006, Rafidah told AP.
At the same time, approved foreign investments in services surged 80 percent on-year to 10.8 billion ringgit ($3.35 billion; 2.3 billion euros) in 2007, she said. Overall, Rafidah said total approved investments in the manufacturing sector rose 30 percent to a record 59.9 billion ringgit ($18.6 billion; 12.7 billion euros) in 2007, more than double the government’s target of 27.5 billion ringgit ($8.54 billion; 5.8 billion euros) a year.
This was largely due to 11 high-spending projects worth more than one billion ringgit ($310.5 million; 212 million euros) each, mainly in the electronics and electrical, petrochemicals, metal, paper and printing industries, she said.

ABUJA, Nigeria, Feb. 19--Nigeria’s President Umaru Yar’Adua called on oil companies to do more to help local people ahead of drawing up a bill to reform the country’s oil industry. “I urge you to further commit to working diligently to ensure that the oil and gas industry is directed towards meeting both the aspirations of Nigerians and the legitimate business goals of all our partners,“ he was quoted by AFP as saying on Monday.
Yar’Adua was speaking at the opening of a conference on the oil and gas industry in Abuja.
He also spoke of the need to create a better governance framework in the oil sector. “This effort will result in the drafting of a Petroleum Industry Bill, which I will place before the National Assembly within the next few months,“ he said.
Earlier in his speech, Yar’Adua lamented the fact that the country’s economy was not benefiting enough from its rich natural resources. “It stands to reason that this situation cannot and should not be allowed to continue any longer,“ he added.
“Our story is that of a country with legendary gas reserves that remains afflicted with an abysmal electric power situation that at the end of the day has stunted our economic growth.“
The president’s comments came a week after he introduced a series of measures to force businesses to reserve a proportion of their domestic gas production for the Nigerian market, or suffer penalties.