Chinese trial over fake receipts

Five men are to appear in court in China charged with producing fake receipts that could have cost the state billions of dollars, state media said.

The men are accused of forging over one million receipts worth a total of $147bn (£72bn) at a factory in Guizhou province.

Police identified the fraud after seizing a batch of the fake receipts in August 2007.

It is the largest such case in over 50 years, a local security official said.

'Almost the same'

The authorities found the first batch of fake receipts on a coach travelling between Guizhou and Yunnan provinces.

This led police to one of the suspects and from there to the factory in Guizhou's Xingyi county.

"The fake receipts that were confiscated could load two lorries," Chai Jiaping, deputy head of the Qujing Municipal Public Security Bureau, told Xinhua news agency.

The five men will be tried at Luoping County People's Court in neighbouring Yunnan province.

"The fake receipts look almost the same as the real ones," Tang Xiaozhou, Luoping's taxation chief, told Xinhua.

"Consumers and even the tax collectors find it hard to distinguish."

"If put into the market, the national treasury would have lost more than 75bn yuan ($10.5bn, £5bn) in tax revenue."

Because of China's rapid economic growth, tax revenues have soared in recent years.

But the authorities have admitted that they need to improve tax collection, and take more action against people failing to report their true income.

There is an active black market for fake receipts in China, which companies can use to claim tax rebates on business expenses.

Last month Li Linjun, spokesman for the State Administration of Taxation, announced a crackdown on fake receipts.

A “people's car” from India

Jan 10th 2008 | DELHI
From Economist.com

India's Tata Motors reveals a car that will sell for some $2,500

RATAN TATA, chairman of the Tata group of companies, has a cerebral and cordial manner. But the so-called “one-lakh car”, which Tata Motors unveiled in Delhi to a rapt public on Thursday January 10th, is a product of impatience and chutzpah. Instead of waiting for the great swell of prosperity in India and elsewhere to create millions of customers for his company’s products, Mr Tata has decided to wade out—further than any one has gone before—to bring a car to them.

In India one lakh means 100,000, and Tata will sell the most basic version of its new car at 100,000 rupees, or $2,500 (not including taxes and the cost of transporting it to the showrooms). This is roughly half the price of its nearest rival, and little more than the cost of a three-wheeled auto-rickshaw. But the “nano”, as the car is called, is no rickshaw. Apart from the fourth wheel and the doors, it has a 623cc engine that will muster 33 brake horsepower. The car should eke out 50 miles to the gallon, Mr Tata says. It complies with the “Euro III” pollution standards that prevail in India and should meet the tougher Euro IV standards with a bit of tweaking. The firm claims that the car produces less pollution than some two-wheelers produced in India today.

Tata Motors is best known for its trucks, lovingly decorated and recklessly driven, that clatter along India’s highways. It started making small passenger cars only a decade ago. Its low-cost car project has set a trend. Mr Tata says he is “quite gratified” that other firms are following suit. Bajaj Auto, which is known for its two- and three-wheelers, said on January 8th that it hoped to team up with Renault and Nissan to produce its own low-cost car. Fiat, Ford, Honda and Toyota also have cheap models in the works. Tata may discover a market, only for others to crowd into it. “It’s not our God-given domain,” says Mr Tata.

Cheap cars can be expensive to invent. Tata experimented with a smaller engine, but was dissatisfied with its performance. It hoped to use continuous-variable transmission, but had to make do, for now, with manual. Tata’s rivals may be able to free-ride on its efforts, copying the cost-cutting tricks it had to discover through painstaking trial and error. “It will be an easier task for them than it was for us,” Mr Tata admits.

Competitors will, for example, notice how Tata shrank the car into what its chairman calls a “concise package”, with the powertrain at the back and the wheels at the “extremities”. The result is 21% bigger inside than the Maruti 800, says Ravi Kant, the managing director of Tata Motors, but is only 80% as long. That will, at least, shorten the traffic jams to which the nano will contribute. Congestion could be a big problem, if millions more cars are to take to the roads. The country's poor-quality road network is slowly improving, but it is heavily over-used. With India's transport arteries already so badly clogged, a boom in sales of low-cost cars could bring about a seizure.

Commuting in India’s cities can be both cosy and deadly. Children squeeze snugly between father at the handlebars of a motorcycle, and mother riding side-saddle at the back. This precarious balancing act, says Mr Tata was the “visual target” he had in mind when he first conceived of the need “to create another form of transport”. About 1,800 people die on Delhi’s roads each year, perhaps one-third of them on two-wheelers. Only 5% die in cars. Tata’s project may pose risks for investors, but it promises unaccustomed safety for customers.

Venezuela Introduces New Currency

By JORGE RUEDA
Associated Press Writer

CARACAS, Venezuela (AP) -- Venezuela launched a new currency with the new year, lopping off three zeros from denominations in a bid to simplify finances and boost confidence in a money that has been losing value due to high inflation.

President Hugo Chavez's government says the new currency - dubbed the "strong bolivar" - will make daily transactions easier and cure some accounting headaches. Officials also say it is part of a broader effort to contain rising prices and strengthen the economy.

"We're ending a historical cycle of ... instability in prices," Finance Minister Rodrigo Cabezas said Monday, adding that the change aims to "recover a bolivar that has significant buying capacity."

Prices have risen as Chavez has pumped increased amounts of the country's oil income into social programs, reinforcing his support among the poor and helping to drive 8.4 percent economic growth in 2007.

The Central Bank is promoting the new monetary unit with an ad campaign and the slogan: "A strong economy, a strong bolivar, a strong country." Officials, however, have yet to clearly spell out their anti-inflationary measures.

Some Venezuelan critics, meanwhile, have dubbed the new currency the "weak bolivar," noting its predecessor, the bolivar, has seen its purchasing power suffer in an economy where inflation ran roughly 20 percent in 2007 - the highest in Latin America.

Venezuelan economist and pollster Luis Vicente Leon said that while the new currency may provide "the perception of stability" for some, it is largely a "cosmetic change."

Government officials say the change is overdue to bring Venezuelan denominations into line with those of other countries in the region. Instead of denominations in the thousands, the largest new Venezuelan note will be 100 strong bolivars.

"It was necessary to leave behind the consequences of a history of high inflation," Central Bank president Gaston Parra said in a televised year-end speech. He said officials aim "to reinforce confidence in the monetary symbol."

The new money was distributed to banks and automated teller machines nationwide ahead of Tuesday's launch and will be phased in during the next six months. Venezuelans will be able to use both old and new bolivars during the transition.

Venezuela has had a fixed exchange rate since February 2003, when Chavez imposed currency and price controls. The government has said it is not considering a devaluation any time soon.

But while the strong bolivar's official exchange rate will be fixed as 2.15 to $1, the black market rate has hovered around the equivalent of 5.60 to $1 recently.

Venezuela's currency has long been named after independence hero Simon Bolivar, who is pictured on the new 100 strong bolivar bill.

The new money is the latest in a series of changes to national symbols during Chavez's presidency. He also redesigned the national seal and flag, and renamed the country the Bolivarian Republic of Venezuela.

With the new currency, the government is also resurrecting a 12.5-cent coin, called the "locha," which existed during Chavez's childhood but has not been used since the 1970s.



source: The Associated Press

Cyprus and Malta adopt the euro

Two Mediterranean island states, Cyprus and Malta, have begun using the euro, joining 13 other countries.

The countries' leaders made symbolic withdrawals of euros from cash machines just minutes into the New Year.

Major bank branches opened for a few hours in Cyprus despite the New Year holiday. The Maltese celebrated the euro's arrival with fireworks.

Cyprus and Malta have added just 1.2 million people to the number of Europeans using the single currency.

But they will have equal voting rights with the other 13 eurozone members at the European Central Bank.

Careful preparations

Both island nations prepared for the changeover thoroughly.

FACTS ABOUT MALTA Population: 407,000 Size: 316 sq km (122 sq miles), the smallest member of the eurozone GDP: 4.8bn euros (0.06% of total eurozone GDP) Biggest earners: Tourism, manufacturing but growth in financial services, IT Prime Minister Lawrence Gonzi is also Finance Minister Independent from UK in 1964

In Cyprus 300,000 currency converters were sent to households, while in Malta a euro telephone hotline has been running alongside 59 "euro centres".

The switchover in Cyprus will highlight the decades-old division between the south and the Turkish-controlled north of the island.

The Turkish lira remains the primary currency in northern Cyprus, which is outside the European Union and is recognised only by Turkey.

But Cyprus' euro coins are inscribed in both Greek and Turkish.

Aware of the previous experiences of some other eurozone members, Cyprus and Malta are watching retailers to ensure they do not use the changeover to round up their prices, contributing to inflation.

The Cypriot government urged companies to round their prices down, while Malta signed 12 price stabilisation agreements with importers, which will last until March 2008.

Both the Maltese lira and the Cyprus pound will be legal tender until the end of January.

Commercial banks in Malta will exchange Maltese lira into euros free of charge until the end of March, and the central bank will allow exchange of lira notes until 2018.

In Cyprus, euros can be exchanged free of charge until the end of June and the central bank will allow exchange of pound notes until 2017.

Big benefits

Scrapping currency exchange costs and adopting a major currency raise hopes of a big boost to the islands' industries.

FACTS ABOUT CYPRUS Population: 778,000 (Greek Cypriots) Size (combined): 9,251 sq km (3,572 sq miles) GDP: 15.2bn euros (0.17% of total eurozone GDP) Biggest earners: Finance and tourism account for almost 80% GDP Independent from UK in 1960, Turkish northern Cyprus not part of EU

Malta is already enjoying a tourism boom, with double-digit growth expected this year, largely due to the arrival of low-cost airlines.

But it is also planning to become a magnet for hi-tech investment.

Several pharmaceutical companies have established research centres in Malta to develop generic copies of patented drugs.

And the German airline Lufthansa signed an agreement in 2007 for Malta to maintain and overhaul its planes.

The Cypriot Finance Minister, Michalis Sarris, has said the euro will benefit consumers and businesses alike because of the eurozone's low inflation, low interest rates and large market.

In the Turkish-controlled north many businesses have already begun accepting the euro and cross-border commerce is flourishing.

In 2003, the Turkish Cypriot authorities opened crossing points, prompting Turkish Cypriot shoppers to go south in search of greater choice and Greek Cypriots to head north for bargains and casinos.

The euro will also become legal tender on British military bases in Cyprus, the first part of sovereign British territory to adopt the currency.

Although the bases at Dhekelia, Episkopi and RAF Akrotiri are not officially part of the European Union, an estimated 10,000 Cypriots live or work there.

Residents use the shops, cafes and beaches on the bases, so the authorities in the sovereign base areas have decided to adopt the same rules as the Cypriot government.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/7165622.stm

Published: 2008/01/01 14:00:42 GMT

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