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March 09, 2000 - Image 8

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The Michigan Daily, 2000-03-09

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8A -The Michigan Daily -Thursday, March 9, 2000
CtgsNATION/WORLD
Cliton nts China tra dedebt

House expected to approve
measure granting permanent
trading privileges by late June
The Washington Post
WASHINGTON -- President Clinton formally
called on Congress yesterday to grant permanent
trading privileges to China, igniting a debate that
will dominate the House for weeks and determine
whether Clinton achieves the highest international
priority of his final year in office.
While some analysts foresee a tough battle for the
president and his allies, House Majority Leader
Richard Armey (R-Texas) told reporters he expected
the House to approve the measure by late June. He
added, however, "It's going to be tough to get the
votes." "
Unless Congress approves the trade pact, Clinton
and others say, the United States will not share in a
greater access to Chinese markets that will occur
when China joins the World Trade Organization, as
expected later this year.

That would be a huge blunder for U.S. companies
and consumers, Clinton has said repeatedly, and the
snub would play into the hands of Chinese hardliners
and anti-democracy forces.
Yesterday, in a major speech in Washington, the
president made his most comprehensive case yet for
U.S. support of China's WTO participation. He left
little doubt that he's staking part of his legacy on the
debate's outcome.
A U.S. rejection of the trade agreement, Clinton
said, "would be a mistake of truly historic propor-
tions."
Supporting China's entry .into the WTO, he said,
"represents the most significant opportunity that we
have had to create positive change in China since the
1970s, when President Nixon first went there, and
later in the decade when President Carter normalized
relations."
Opponents say the trade pact would wrongly
reward a nation that oppresses its citizens, spoils its
environment and threatens its neighbors. China
fanned those flames last month by suggesting it
might use military force if Taiwan indefinitely delays
reunification talks with the mainland.

Critics say Clinton's proposal would reduce U.S.
influence over China by ending the tradition of annu-
al congressional reviews of trade relations with the
Asian giant, which often became forums for cri-
tiques of China's human rights record.
Some White House officials note that, despite the
hot rhetoric, Congress has approved "normal trade
relations" with China year after year, and they con-
tend that's the best indicator that lawmakers will now
make that status permanent. '
But pro-trade Democrats fear that if Congress
delays action, the issue could fall victim to political
pressures in an election year in which control of the
House is at stake.
House Minority Whip David Bonior (D-Mich.) a
leading opponent, insisted yesterday that 30 Democ-
rats who previously voted for annual renewal of
trade relations with Beijing will now vote against a
permanent extension.
"I think this is going to be an extremely close
vote," Bonior said.
But Rep. Robert Matsui (D-Calif.) a leading pro-
ponent of normal trade ties with China, said: "He's
speculating. There's no good vote count."

President Clinton salutes an audience at Johns Hopkins University yesterday after
delivering his remarks on the importance of permanent normal trade with China.

German bank giants agree
to $32 billion merger deal

The Washington Post
PARIS - The boards of two Ger-
man banking giants yesterday
agreed to merge with each other in
a S32 billion combination that
would create one of the largest
banks in the world.
Deutsche Bank, Germany's
largest bank, and Dresdner Bank,
its third-largest, are to announce
the merger officially at a news con-
ference today in Frankfurt but
sources confirmed the deal
yesterday.
The merger marks the first serious
move toward bank consolidation in
Germany. Though German banks are
large, they are late in attempting the
kind of consolidation that already
has occurred in the United States
and in some Western European
countries.
"It's about time that happened, we
think," said Ruud Polet, an analyst
with ING Groep in the Netherlands.
"In the Netherlands we started 10
years ago."
In Switzerland, Italy, Spain and
France as well, banks are combining in
order to make their retail operations

"They are burning their bridges behind
t- Matthew Czepliewicz
Salomon Smith Barney

more efficient and to position them-
selves for market competition as barri-
ers to movement of capital in Europe
continue falling.
The new bank is to be called
Deutsche Bank, but its logo will be in
the vivid green that is Dresdner's offi-
cial color.
Officials declined to speculate on
how many jobs might be cut as a result
of the combination, but German news-
papers yesterday were reporting the
worst.
"Bank Merger: 16,000 jobs gone,"
said a large headline in the Bild
Zeitung.
"Bank Merger Scares Labor
Unions: One-third of 80,000 jobs in
danger, unrest in the branches," said
Berlin's Tagespiegel.
The new entity reportedly will
separate its retail functions - that

is, those that serve individual cus-
tomers in person - from its invest-
ment side, perhaps spinning off the
retail operations into a separate
entity.
Deutsche Bank chairman Rolf-
Ernst Breuer has been a major pro-
ponent of Internet banking, and
many analysts speculated the new
firm would focus on online cus-
tomers.
If so, it would be a bold move
into the relative unknown, analysts
said.
"It frees Deutsche Bank from the
shackles of low profitability in
retail banking. But they are burning
their bridges behind them" if Inter-
net banking proves less successful
than expected in Germany, said
Matthew Czepl iewicz of Salomori
Smith Barney.

Dow Jones Industrial Average, NASDAQ and S&P 500
Composite for Week Mar. 2 - Mar. 8
DJIA NASDAQ S&P 500
Close Change Close Change Close Change
3/2 10,164.92 +26.99 4,754.51 -29.57 1,381.76 +2.57
3/3 10,367.20 +202.28 4,914.79 +160.28 1,409.17 +27.41
3/6 10,170.50 -196.70 4,904.85 -9.94 1,391.28 -17.89
3/7 9,796.03 -374.47 4,847.80 -57.05 1,355.62 -35.66
3/8 9,856.53 +60.50 4,897.17 +49.33 1,366.70 +11.08
HIGHLIGHTS FROM THE WEEK: The Dow gains yesterday were led by Merck, the pharmaceutical giant,
as analysts upgraded most drug stocks as the earnings outlook is very positive. It was a rarity that both the
Dow and the NASDAQ finishing on the positive side as the Dow has decreased by 15 percent since the
beginning of the year while the NASDAQ has gained 20 percent. Tuesday marked the first time that the
NASDAQ climbed above 5,000 for the first time but ended below the historical mark. Also on Tuesday, the
Dow saw its fourth largest drop ever as Procter & Gamble, delivered a profit warning because of a rising
cost of materials. This news was taken negatively because investors thought all blue chips are starting to
feel the effects of the raising of interest rates during the last year. However, last Friday all indexes saw sub-
stantial gains as the newly created jobs report, hourly earnings, and unemployment rate released from the
Labor department were all inflation friendly.
WHAT IS THE DOW JONES INDUSTRIAL AVERAGE? The DJIA represents 30 stocks traded on th-e
New York Stock Exchange (NYSE) and NASDAQ market. These stocks are all major factors in their
respective industries and are widely held by individuals and institutional investors. Many financial
advisers think of it as a good indicator in telling whether the overall "market" is doing well or poorly..
WHAT IS THE NASDAQ COMPOSITE? The NASDAQ is the fastest growing stock market in the
U.S. due to it being a screen-based stock market, compared to a trading floor market like the NYSE. It
also has almost all of the technological stocks available for trading, which have provento be a very
volatile, but profitable, industry the lastcouple of years.
WHAT IS THE S&P 500? The S&P 500 is a marketvalue weighted index composed of 400 indus- a
trial stocks, 20 transportation, 40 financial, and 40 utility. It is a far broader measure than the DJIA
because it takes into account 500 different stocks traded on the two main exchanges (NYSE and
NASDAQ-AMEX) compared to the DJIA's 30 stocks it reports.
- Compiled by Dailv Staff Reporwtr Kevin Magnusonfrvom 'wire reports.

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