China:The Capital's new Housing Rules

They aim to boost real estate purchases by people who actually intend to live in the home. The name for the set of seven new regulations can be translated as “Beijing Seven Rules” and the rules uses a new term: “self-use commercial housing.” The rules are intended to make homes more affordable, and are aimed at smaller homes the lower-middle income group might buy. They also aim to discourage speculators.

Source: Caixin

Samsung Electronics reports record third quarter, warns of slower smartphone growth

Samsung Electronics Co Ltd's quarterly operating profit surged 26 percent to a new record, matching estimates and powered by a strong recovery in its memory chip business as smartphone sales growth eases sharply.

The smartphone leader has posted a record profit in six of the past seven quarters but may find it hard to extend its winning streak without a new hit gadget, after less-than-spectacular launches of its Galaxy Gear smartwatch and Galaxy Round curved phone in recent months.

Samsung forecast on Friday that strength in its bread-and-butter chip business would continue in the current quarter, while growth in smartphones would slow due to intensifying competition during the year-end holiday season.

Samsung has done well, having rapidly caught up with Apple in the smartphone market. But I'm concerned whether Samsung would be able to do better," said Kim Sung-soo, a fund manager at LS Asset Management.

he mobile division, Samsung's biggest earnings generator, reported a record 6.7 trillion won profit as a greater variety of cheaper Galaxy smartphones boosted shipment volumes and helped counter weakening growth in the lucrative high-end segment.

Samsung, which competes with Apple Inc in the mobile market, faces margin pressure in the current quarter as it splashes out on marketing its high-end Galaxy S4 and Note 3 smartphones during the year-end holiday season.

Shares in Samsung, worth $222 billion (137.1 billion pounds), rose 10 percent over the past three months, outperforming a 7 percent gain in the wider market.

Source: Reuters

Twitter IPO pegs valuation at $11 billion

Seeking to avoid a repeat of Facebook Inc's much-maligned public debut, Twitter Inc revealed more modest ambitions, saying its initial offering would raise up to $1.6 billion (987.8 million pounds) and value the company at up to about $11 billion.

The valuation was more conservative than the $15 billion some analysts had expected for the social media phenomenon, potentially attracting investors who might consider the money-losing company's listing price a better deal, with room to rise.

Twitter had signalled for weeks it would price its IPO modestly to avoid the sort of stock plummet that spoiled Facebook's coming-out party. It said on Thursday it intends to sell 70 million shares between $17 and $20 apiece, raking in up to $1.4 billion for the company.

If underwriters choose to sell an additional allotment of 10.5 million shares, the offer could raise as much as $1.6 billion.

Twitter's offering will be the most high-profile Internet IPO since Facebook's May 2012 debut, when the social network giant's shares fell below their offering price and did not recover until a year later. Still, the modest pricing doesn't obscure questions about Twitter's profitability.

"But in the end, even for $11 billion, the question is can they come up with earnings to substantiate that number? And it's unclear that they're going to be able to do that."

At a roughly $11 billion valuation, Twitter would be worth more than Yelp Inc and AOL Inc combined, but only a fraction of tech giants like Google Inc and Apple Inc, worth $342 billion and $483 billion respectively. Facebook's market value is now $128 billion.

Source: Reuters

Japan's Self-Defense Forces to deploy anti-ship missiles on Miyako Island

Japan's Self-Defense Forces say a surface-to-ship missile unit will be deployed on Okinawa's Miyako Island for the first time next month.

The Self-Defense Forces will conduct a drill in southwestern Japan from November 1st to the 18th, with about 34,000 personnel taking part.

Units equipped with Type 88 surface-to-ship missiles will be deployed on Miyako Island and in the southern part of Okinawa's main island as part of the drill.

This would put all waters between the islands within range of the guided anti-ship missiles.

Source: NewsOnJapan

Japan readies huge island wargames amid YouTube PR push

Destroyers, fighter jets and 34,000 troops are to take part in a huge exercise aimed at bolstering Japan's ability to protect its remote islands amid a territorial spat with China.

The wargames, which will include live-firing, come as Tokyo steps up its global PR campaign by posting videos it hopes will swing world opinion behind its claims to two archipelagos that are the focus of disputes with Beijing and Seoul.The air-sea-land drill from November 1-18 will involve amphibious landings on the uninhabited atoll of Okidaitojima, 400 kilometres (250 miles) southeast of the main Okinawan island, a defence ministry official said.
Live-fire exercises involving destroyers and F-2 fighter jets will also be conducted, he said. The island is a considerable distance from the Japanese-controlled Senkaku islands, which China also claims as the Diaoyus.
However, defence force chiefs are considering deploying short-range land-to-sea missiles on the island of Ishigaki, which lies 150 kilometres from the disputed islands, the Asahi and Fuji TV networks said. Both broadcasters said there were no plans to fire weaponry there.

NewsOnJapan

Boeing gets $20.7 billion worth of 737 Max commitments from China

 Boeing Co  has secured commitments for around 200 of its 737 Max aircraft, the upgraded variant of its best-selling short-haul planes, from multiple Chinese customers, said two sources familiar with the deals.

The deals are worth a combined $20.7 billion at list prices and must be approved by the Chinese government, a usual practice for aircraft orders in the country, before the customers can be identified, the sources said.

These are the first commitments for the 737 Max from China, the world's fastest-growing airline market. Officials from both Boeing and Airbus, which makes the A320 that competes with the 737, have said China is likely to overtake the United States as the world's largest market over the next 20 years.

The commitments come from a range of customers including state-owned airlkines via the national procurement agency,China Aviation Supplies Holding Company, as well as leasing firms associated with the country's banks, the sources said.

Source: Reuters

Tianjin applies for China's second Free Trade Zone

North China's Tianjin is applying for the a free trade zone of its own after the first such zone went operational late last month in Shanghai.

Zong Guoying, head of the Tianjin Binhai New Area (BNA), confirmed to Xinhua on Thursday that the BNA had completed a draft plan for the zone, and all documentation was with the central government.

"We are optimistic that the plan will get approval but we are not certain," said Zong, also the vice mayor of Tianjin.

"No matter what, we will continue to open up," Zong said, noting that the Tianjin BNA would explore a "negative list" approach for investment.

The proposed Tianjin free trade zone will be centered on the Tianjin Dongjiang Bonded Area, which covers an area of abut 10 square kilometers.

The Shanghai pilot free trade zone kicked off on Sept. 29 to test market reform. Upgrade of the bonded area into an FTZ is already listed by Tianjin as a priority for 2013.

Zhou Liqun, a professor with Nankai University who studies coastal development, said Tianjin FTZ would needs to progress step by step.

Source: Xinhua

HSBC economists:No policy tightening by People's Bank of China

The current spike in China's money-market rate is just temporary and not a sign of policy tightening by the People's Bank of China (PBOC), two HSBC economists said Friday.

There is no need for the PBOC, the central bank, to tighten or loosen monetary policy in the coming quarters as inflationary pressures remain modest and additional money inflows can be expected, according to a research note by Qu Hongbin, co-head of Asian economic research of HSBC and Sun Junwei, China economist of HSBC.

China's seven-day repo rate, a benchmark for short-term funds, climbed to almost a two-month high of 4.67 percent on Thursday. Meanwhile, the central bank refrained from injecting liquidity by skipping reverse repo issuance for the third consecutive time.

The suspension of reverse repos might have been caused by the need to slow down money inflows, which started to accelerate as indicated by the 126 billion yuan (20.54 billion U.S. dollars) increase of the forex purchase position by commercial banks in September, they said.

They believed the recent acceleration of headline inflation mainly reflected the seasonal spikes of fresh vegetables and fruits. The underlying inflationary pressures remain modest, given the below-trend GDP (gross domestic product) growth and the limited upstream price pressures.

Housing data this week showed China's house prices in September gained 9.1 percent from last year, raising fresh concerns about property bubbles and consumer inflation.

To check property prices, Beijing will likely reply by increasing supply rather than tightening monetary conditions, they noted.

The ongoing renminbi appreciation and the renewed expectation of delayed quantitative easing (QE) tapering all mean risks of additional money inflows in the coming months, fuelling liquidity growth, according to their research.

Keeping liquidity at an appropriate level is still the policy priority for the PBOC, according to its latest statement on it website on Oct.16.

We expect monetary policy to remain relatively stable, with some fine-tuning measures to be utilized in order to adjust liquidity conditions, they added.

Source: Xinhua

Brazil State Dominant Approach to Oil Reserves Development Shortcomings

   According to a report from the Wall Street Journal,"Brazil heralded this week's auction of a huge oil field as a vindication of its state-dominant approach to its oil riches, but some industry experts say the country must modify its rules before new fields are sold for Brazil to achieve its aim of becoming an oil powerhouse".

"The government hailed the auction of the massive Libra oil field on Monday as a success after four foreign oil giants agreed to join forces with state-owned Petroleo Brasileiro to undertake the development.

The companies are expected to invest around $200 billion over the 35-year lifetime of the concession.

Brazil is competing to become a top oil producer following the discovery in 2007 of enormous "pre-salt fields" off the country's southeast coast, which sit under a deep layer of salt. 

But detractors point out that it took the country five years to hold the first auction related to the discovery, and will take years more to develop. Meanwhile, Brazilian production has slipped to 1.9 million barrels a day from a peak of 2.11 million in 2011.

A big reason for the delay, industry experts say, was a new regulatory system that the government designed to give it about 80% of the proceeds from oil, one of the highest percentages in the world.

The rules also required Petróleo Brasileiro, or Petrobras, to have at least a 30% stake in every project and operate the fields. Those requirements, many say, are straining the company's capacities and potentially limiting the pace of development.

Experts also say the new rules that require private firms to buy roughly half of their supplies locally in an effort to spur Brazilian industry will drive up costs.

Further, the bidders, Royal Ducth Shell PLC, Total SA, Cnooc Ltd. and China National Petroleum Corp.,will provide a record signing bonus of about $7 billion.

The new legislation was put to the test for the first time on Monday, when the government sold the rights to operate Libra, a field with estimated reserves of between 8 billion and 12 billion barrels of oil, with a potential daily output of about 1.4 million barrels a day. And many people laud the results.

The government says the delay in writing new rules and holding an auction will produce better results for the economy. By requiring oil companies to invest locally, it hopes to spur local development. Even under the old rules, there have been some successes: the nation's naval construction industry is now undergoing an oil-related boom after it was decimated in the 1990s.

Yet that comes at a cost. After the government opened up the oil industry to the private-sector in 1998, there was a rush of investments that led to a series of discoveries, culminating with the pre-salt fields. But there followed a five-year period with no new auctions, slowing the pace of discoveries and sapping the industry of momentum".

Duty exemptions for Shanghai FTZ imported equipment

Manufacturing and production service businesses in the newly launched Shanghai Free Trade Zone (FTZ) will get their imported equipment duty-free, China's finance, customs and taxation regulators announced on Thursday.

The exemption will be applied to such enterprises' imports of machines, equipment and other necessary goods for manufacturing, according to a new tax policy released by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.

Goods produced and processed in the free trade zone and sold to the domestic market through indirect means still have to pay value-added tax and consumption tax.

Non-manufacturing-purpose goods imported by production service enterprises and those regulated on duty are also not duty-free, under the policy.

Meanwhile, bonded exhibition and trade platforms may be set up in specific areas in the FTZ under the guidance of the import duty policy.

Bonded areas in Shanghai Waigaoqiao, Yangshan and Pudong Airport will keep their current duty policies. The new duty policy becomes effective on Sept. 29.

Source: Xinhua

China's interest rates Rise,not a repetition of June's hike

According to an article published today in the Wall Street Journal:A surge in Chinese interest rates is creating a disconcerting flashback to June's cash crunch. This time, it's less a sign of financial stress than comfort that China's economy has stabilized for now.

  In trading Thursday, China's benchmark, seven-day repurchase rate jumped to 4.77% from 4.05%. That is its highest level in three months, although the rate is well below the stratospheric 25% hit during the depths of June's rough patch.

The reason for the rise now: China's central bank stopped providing liquidity to the interbank market last week.

A similar lack of activity by the central bank triggered the June swoon, which spread throughout the banking system.

This time around, the economy is on firmer footing and the central bank is unlikely to want a repeat period of turmoil in the weeks leading up to an important Communist Party meeting slated for November.

The preliminary HSBC Markit purchasing managers index out Thursday hit 50.9, indicating another month of solid, if unspectacular growth. The report confirmed recent good numbers on electricity production and auto sales, which rose nearly 20% in September from a year earlier.

The central bank's move to withdraw liquidity is both a sign of confidence in growth and worry about prices.

9 Visions of the Future described by Kids. Encouraging creativity in the younguns.

Ask the average four-year-old a question, and you'll probably get a wild, winding explanation in return. Case in point: Last month, little visitors to the V&A Museum of

Childhood were invited to share their visions of what the future holds. The predictably weird and wonderful results—Invisible owners of the world! Butterfly people! Three-eyed, Cheerio-loving aliens!—were turned over to artists at the Central Illustration Agency, who each teamed up with a tiny counterpart to turn those predictions into full-color 2D realities.

“Mind of a Child—Eye of an Artist” is a freaking brilliant campaign to promote a project called Big Draw Tomorrow:aimed at encouraging creativity in the younguns of today. It's enough to make even the most level-headed grown-up give a quick thought or two to the coolest possible future imaginable, and the perfect way to get mental engines geared up to make the next years, decades, and centuries on earth even better than the last. The whole thing is almost a bit like a modern artsy take on Giz's own Paleofuture—if the forecasters of yesteryear were, in fact, under-age.

Source: Gizmodo

Digital Indians: How Ruchi Sanghvi engineered her rise

"When I started out in Facebook, it had only 20 people. I saw it grow to a thousand employees and from five million users to over a billion users. I saw it evolve from a service that served college students to one that served the world," she says.

"It was extremely chaotic, but it was a wonderful experience. I learnt everything there."

At Facebook, she was part of the team that developed the news feed.

How was it, I asked, being the first female engineer at Facebook?

Ms Sanghvi says she was used to being in a minority: at engineering school, she was one of the five female students in a class of 150.

"But it was, by and large, a meritocracy. It had one of the best environments for learning."

But at Facebook, she says, she truly came into her own.

Facebook was also where she met her future husband, who was the first Indian engineer the company had hired.

I ask her for a story about Mark Zuckerberg, one of the founders and chief executive. She frowns, thinks hard, and says she doesn't quite like talking about Mr Zuckerberg. Then she relents.

It's a story about how the news feed launch outraged users and nearly killed it.

Continue reading the main story

“Start Quote

The journey from employee to entrepreneur was a complex and taxing one for an immigrant like me”

Ruchi Sanghvi

"We had less than 10 million users when news feed arrived. Mark was at a press conference [announcing it] and over a million users began protesting against it," she says.

"Groups with names like 'I hate Facebook' and 'Ruchi is the devil' had been formed. People camped outside our office and demonstrated.

When Ms Sanghvi left Facebook in 2010 after an itch to start her own company, the social networking site had more than 1,500 employees and more than 500 million users.

"The journey from employee to entrepreneur was a complex and taxing one for an immigrant like me," says Ms Sanghvi, who has been lobbying US authorities to ease immigration laws.

"When I started Cove, I spoke to three immigration lawyers who gave me a long checklist of things to do before my company could hire immigrants."

Two years later, in February 2012, Cove was bought by the cloud-sharing service Dropbox.

At Dropbox, a six-year-old company with more than 175 million users, Ms Sanghvi has diverse roles. She has led hiring - "only great people can make great products," she says - and managed marketing and communications.

Source: BBC

US: Initial Claims fell 12,000 to a seasonally adjusted 350,000, market expected 340,000

The number of Americans filing new claims for unemployment benefits fell less than expected last week, but a lingering backlog of applications in California makes it difficult to get a good read of labor market conditions.

Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 350,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 4,000 more applications filed than previously reported.

Technical problems as California converted to a new computer system have distorted the claims data since September and a Labor Department analyst said claims from the backlog in California were still working their way through the system.

Economists, who had expected first-time applications to fall to 340,000 in the week ending October 19, say claims should drop back to levels consistent with a gradual labor market recovery once the backlog in California is cleared.

The four-week moving average for new claims, considered a better measure of labor market trends, rose 10,750 to 348,250.
Source: Reuters

US Trade Deficit widens marginally in August

The trade deficit widened marginally in August but from an improved July number. The August trade gap posted at $38.8 billion compared to $38.6 billion in July (originally $39.1 billion). The market median forecast was for a $40.0 billion gap. Exports slipped 0.1 percent, following a 0.6 percent decline in July. Imports were unchanged in August after a 1.3 percent gain the prior month.

The slight worsening in the trade gap was primarily due a modest widening in the nonpetroleum goods deficit which grew to $38.5 billion in August from $38.3 billion in July. The petroleum deficit decreased to $18.6 billion from $18.7 billion in July. The services surplus nudged down to $19.4 billion from $19.5 billion. 

On a not seasonally adjusted basis, the July figures show surpluses, in billions of dollars, with Hong Kong $3.7 ($2.9 for July), Brazil $1.7 ($1.7), Australia $1.4 ($1.5), and Singapore $1.1 ($0.6) among others. Deficits were recorded, in billions of dollars, with China $29.9 ($30.1), European Union $9.8 ($13.9), OPEC $7.3 ($7.4), Japan $6.4 ($6.8), Germany $5.4 ($6.4), Mexico $4.9 ($4.1), Saudi Arabia $3.6 ($3.3), and Canada $2.3 ($2.7) among others.

The latest report still shows global trade to be on the sluggish side. Manufacturers in the U.S. still are not getting a boost from overseas demand. But at least petroleum imports (dollar value) are not rising.

Source: Bloombergt

London Midday: Stocks rise as Chinese manufacturing hits seven-month high

UK stocks were performing well on Thursday as some improving data from China fuelled some decent gains in the banking and mining sectors.

Market Analyst Craig Erlam from Alpari said: "Anything that's good for Chinese growth is viewed as positive for the global economy, which is why we're seeing European indices on the rise again this morning, following the brief pull-back yesterday."

The FTSE 100 slipped on Wednesday, recording its first day in the red in 10 trading sessions, as traders took profits after the index hit a five-month high the day before. The index rebounded today, trading at around 6,700 by midday.

The Chinese HSBC manufacturing purchasing managers' index (PMI) improved from 50.2 to a seven-month high of 50.9 in October, ahead of the consensus forecast for 50.4. HSBC economist Qu Hongbin that this momentum is likely to continue in the coming months, "creating favourable conditions for speeding up structural reforms".

Source: LiveCharts

Asian markets mixed as Chinese money-market continues to rise.

Asian market finished mixed on Thursday as upbeat corporate earnings and an improvement in Chinese manufacturing was offset by an ongoing increase in money-market rates in the world's second-largest economy.

The HSBC manufacturing purchasing managers' index for China rose to a seven-month high of 50.9 in October, up from 50.2 previously and ahead of the 50.4 consensus forecast.

However, China's Shanghai Composite finished 0.9% lower after the People's Bank of China (PBoC) refrained from injecting extra liquidity into markets for the third auction in a row. 

This caused the seven-day bond repurchase rate - an important measure of short-term liquidity - to jump 47 basis points to 4.05% during today's session, the biggest rise since late-July.

The PBoC has not sold reverse-repurchase contracts since October 17th, leading to a net withdrawal of funds from the financial system over the last week as previously issued bills matured.

Analysts at Capital Economics said that it seems more likely that growth in China has started to slow despite the improvement in the manufacturing PMI. 

They explained: "Whatever the trajectory over the next couple of months, efforts to slow the unsustainably-fast flow of credit will weigh on growth over the coming year. 

Hong Kong's Hang Seng benchmark fell 0.7%, as banking groups China Construction Bank and Industrial & Commercial Bank of China weighed on the market.

Over in Japan however, the Nikkei 225 finished 0.4% higher after upbeat results from engineering and electronics conglomerate Hitachi which reported a 5.7% rise in first-half profit, beating its own forecasts for a 11.4% fall.

Source: LiveCharts

EUROPEAN PMIS POINT TO SLOWER RATE OF GROWTH IN OCTOBER

Purchasing Managers' Indices (PMIs) for the Eurozone's two largest economies, Germany and France, dented the euro's strides for new highs against the greenback on Thursday morning, at least temporarily.

The EUR/USD was exploring new territory and moving into two-year highs before PMI data showed that the economic outlook may not be as rosy as some may have hoped.
In fact, the EUR/USD touched an intraday high of 1.3823, levels unseen since November 2011, ahead of the French PMI release.

The flash reading of French composite PMI for October showed a decline to 50.1 from 50.5 in September, sending the euro slightly lower. 

Services PMI fell to 50.2 from 51.0 and manufacturing PMI fell to 49.4 from 49.8. Analysts were expecting a slightly better performance, with an estimate of 51.2 for services and 50.3 for manufacturing, expecting that the latter would cross the 50-point threshold that signals expansion.

Markit, which compiles the data, concluded that the French private sector output remains broadly unchanged in October. Perhaps more worrying is that one of the more forward-looking subindices showed a renewed fall in incoming new business.

According to Jack Kennedy, Senior Economist at Markit, "The French private sector economy delivered a flat performance at the start of Q4, as a slower fall in manufacturing output offset a softer showing from the service sector. Although new business slipped back into contraction, stabilising employment and improved service sector business expectations provide some signs of encouragement as we move towards the end of the year."

PMIs for Germany showed a similar story but were a bit more optimistic. The data indicated that new business volumes rose for the fourth consecutive month but the rate of expansion was only marginal and the slowest since July.

Overall, the German composite PMI fell to 52.6 from 53.2 in September. Services PMI fell to 52.3 from 53.7 and manufacturing PMI rose to 51.5 from 51.1. Both were lower than the consensus estimates of 53.8 and 51.6, respectively.

The data shows that German economic growth continues in the private sector but at the slowest rate since July in what was already being seen as a fragile recovery.

Source: LiveCharts

REVENUE AT CREDIT SUISSE INVESTMENT BANK SLUMPS

Credit Suisse suffered a decline in both revenue and trading at its investment bank in the third quarter, it revealed Thursday.

The falls prompted the Swiss bank to announce plans to reduce its interest rate trading, saying it was "restructuring and simplifying its rates business in order to increase returns". 

Group revenue slipped just over 1%, dragged by an almost 20% plunge in investment banking income, hit by client caution and a drop in third quarter fixed income trading. 

Profit came in below analyst expectations (of 724m francs) at 454m francs. 

Source: LiveCharts

U.S. manufacturing growth slows in October, disrupted by government shutdown: Markit

U.S. manufacturing grew at its slowest pace in a year this month and factory output contracted for the first time since late 2009, an industry report showed on Thursday.

Financial data firm Markit said its "flash," or preliminary, U.S. Manufacturing Purchasing Managers Index fell to 51.1, the lowest since October 2012, from 52.8 in September.

Output declined for the first time in more than four years, with the subindex dipping to 49.5 from 55.3. A reading below 50 indicates contraction.

The survey was conducted partly during a 16-day U.S. government shutdown that economists expect will slow overall U.S. growth slightly in the last three months of 2013.

"It is impossible to disentangle the impact of the shutdown from other factors that might have been at play during the month," said Markit chief economist Chris Williamson.

But he said the survey "suggests that the disruptions and uncertainty caused by the crisis hit companies hard."

New orders were placed at their slowest pace since April, though hiring increased for a fourth straight month with a reading of 52.3 in October.

Source: Reuters

Poland's roads to ruin

When Poland started handing out billions of euros worth of contracts for a wave of road-building five years ago, everyone was meant to benefit.

Poland would bring its decrepit transport system into the 21st century, European construction firms would win contracts at a time of recession, and the European Union, whose cash helped fund the work, could point to how it was helping.

Poland got its roads, for the most part. But in many other ways the enterprise, one of the biggest construction projects in Europe, went seriously wrong. Several contractors are in legal battles to recover billions of euros they say Poland owes them. Dozens of Polish companies are in bankruptcy, and multinational firms have blamed losses on the Polish contracts . Six European governments have complained to Poland about the way their companies have been treated. The European Commission is investigating what went wrong.

This is not so much a story of corruption as of cost-cutting zeal. Poland stuck to its budget and the prices agreed in its contracts. That was the problem. In an industry where firms routinely bid as low as possible and costs routinely overrun, Poland frequently refused to budge on cost. In its drive to keep costs down, it also ignored warnings - including some from independent engineers hired by the state - that designs and plans needed to be changed.

The drive to economize was repeated on dozens of projects, industry groups and construction company executives say, and left many involved in the projects struggling. One of the biggest losers was Alpine Holding GmbH, the Austrian unit of Spanish group FCC, which enteredbankruptcy proceedings in June, becoming Austria's biggest corporate collapse since World War Two.

A project that should have been a bonanza for Europe has turned into "a slaughter house for Polish and European firms," Jaroslaw Duszewski, a former Alpine executive, wrote to the head of the Polish state roads agency in June this year. A spokesman for FCC declined to comment.

Five other firms have told Reuters they are still in dispute with the road agency over payment: Austria's Strabag, the Polish unit of Germany's Bilfinger, Ireland's SIAC, a joint venture of Ireland's Sisk and Roadbridge called SRB, and Budimex, a Polish unit of Spain's Ferrovial. All but one said they had filed suits against the state road agency which were unresolved. Bilfinger's subsidiary said it was seeking to resolve the dispute out of court.

Polish Prime Minister Donald Tusk has defended his officials, and said Poland will not bow to foreign pressure.

Source: Reuters