China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
U.S. growth could be weak for years: Fed's Stern (Reuters)
2008.10.16By Ros Krasny 22 minutes ago
HOUGHTON, Michigan (Reuters) - U.S. economic growth could be restrained for as long as a few years by "unprecedented" problems in financial markets, a top Federal Reserve policy-maker said on Thursday.
"We should anticipate further declines in employment and softness in most components of demand for goods and services," said Gary Stern, President of the Minneapolis Fed and a voting member of the central bank's Federal Open Market Committee in 2008.
In remarks prepared for a speech on the economy and policy at Michigan Tech University in Houghton, Mich., Stern said the current downturn might be worse than the early 1990s recession.
"In view of the scope and severity of the recent financial shock, the restraint on economic activity stemming from credit market headwinds could exceed the experience of the 1990s," he said.
"Depending on how one reads the data, financial headwinds restrained the pace of the ensuing expansion of the early 1990s from 12 to 36 months. Something similar is certainly conceivable today," Stern said.
Stern said the economy faces pressure from the ongoing decline in home prices and high inventories of unsold houses, a string of drops in monthly payrolls, the negative wealth effect of a falling stock market and the deterioration in credit availability.
The positive levels of GDP growth logged in 2007 and for the first half of 2008 "do not tell the whole story," he concluded.
On a more cheerful note, Stern said the bulge in energy and commodity prices that peaked in July "is apparently behind us" and that inflation should recede.
Stern said the Fed's actions to date, from its severe cuts to benchmark lending rates to massive efforts to pump liquidity into the financial system, had been on-target but not yet successful in restoring stability.
"The Federal Reserve has responded to unprecedented times with equally unprecedented actions ... Despite these initiatives, financial markets remain unsettled, and some institutions continue to experience funding pressures," he said.
(Reporting by Ros Krasny, Editing by Chizu Nomiyama)
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