PARIS (Reuters) – China&&9;s auto sales surged past the United States to reach record levels in 2009, industry figures showed on Monday, underscoring China&&9;s importance to the global auto industry as the world&&9;s biggest market.

The figures came as PSA Peugeot Citroen (PEUP.PA) of France said markets were expected to show signs of recovery around the world in 2010, while Volkswagen AG (VOWG_p.DE) (VOWG.DE) said it aims to at least double its U.S. sales in coming years.

After a year in which Chinese automakers made key acquisitions abroad, Beijing&&9;s renewed incentives to bolster demand will likely keep it as a bright spot for car makers battered by the financial crisis.

Vehicle sales in the country came to a record 13.6 million units in 2009, the China Association of Automobile Manufacturers said, well above a previous target of 10 million units and compared with annual sales of 10.4 million cars and light trucks in the United States, the lowest level in 27 years.

The Chinese tally, which also includes heavy vehicles, is still higher than that of the United States after deducting roughly 650,000 units of heavy trucks, Orient Securities said.

"Sales have been extremely hot in most parts of last year with little seasonal changes. Many people have to wait for weeks or even months to get their cars," said Qin Xuwen, an analyst at Orient.

The past year has seen Chinese automakers venturing on to the global stage for the first time in a major way, ready to snap up brands such as Volvo and Hummer which they previously admired from afar.

GLIMMERS OF IMPROVEMENT

Peugeot said Europe would miss out on any global upturn, forecasting a 1-digit percentage decline as state-funded scrappage schemes are removed or phased out.

"The second half should see some glimmers of improvement," it said in a statement, reporting a 2 instant payday loan.2 percent decline in 2009 sales of new vehicles and "complete knock down" (CKD) units to 3,188,000.

It was boosted by newer models such as the Citroen C3 Picasso, its position in light commercial vehicles and its low CO2-emission line-up.

PSA shares were up 2.7 percent to 27.22 euros in early trading, taking its 2010 gain so far to 15 percent.

PSA is in cooperation talks with Mitsubishi Motors Corp (7211.T) of Japan.

Volkswagen, Europe&&9;s biggest car maker, said it aims to more than double its sales in the United States within the next three to four years, the head of its U.S. business said.

"We will sell 400,000 to 450,000 vehicles in 2012/13," Stefan Jacoby said on Sunday at an event in Washington, D.C. ahead of the Detroit Auto Show. VW sold 213,000 cars in the United States last year.

Meanwhile, Formula One supremo Bernie Ecclestone and investment company Genii Capital will soon have initial financing to show GM (GM.UL) they can fund a purchase of Saab, according to daily Dagens Industri.

The paper said Ecclestone and Genii would have between 500 million Swedish crowns (&&6;70 million) and 1 billion crowns in an account in a couple of days. However, it was not clear whether the group had sent in a formal bid for the loss-making Swedish car firm.

"I have had contacts with GM, who have given us a deadline of the beginning of this week, which I interpret as Monday through Wednesday," spokesman Lars Carlstrom said.

(Additional reporting by Arno Schuetze, Fang Yan, Jason Subler and Dominique Vidalon; Writing by Marcel Michelson; Editing by David Holmes)

(&&6;1=7.117 Swedish Crown)

China car sales surpass U.S., Peugeot sees upturn

Hot News: Randgold Uses Turbulence To Etch New Base

TOKYO (Reuters) – A state-backed turnaround fund is likely to decline financial aid for Japan Airlines (9205.T) from Delta Air Lines (DAL.N) or American Airlines (AMR.N) and limit an alliance to a business tie-up, a newspaper reported on Sunday.

The Enterprise Turnaround Initiative Corp of Japan (ETIC) has likely determined that such capital investment would complicate restructuring procedures and narrow its future exit strategies, the Nikkei business daily said, without citing sources.

Delta Air Lines and American Airlines have been courting JAL with rival offers of financial aid of &&6;1 billion or more, eyeing a stronger foothold in Japan and close ties on overseas routes.

The move would also allow JAL to accelerate its restructuring measures, the report added free insurance quotes.

The main lenders to Japan Airlines plan to accept a restructuring package that would require the carrier to file for bankruptcy, sources said on Saturday, increasing the likelihood of a state bailout this month.

ETIC plans to establish a credit line of more than 600 billion yen (&&6;6.48 billion) along with a state-owned bank to ensure JAL can keep flying once a bankruptcy is announced, a source with the knowledge of the matter said.

(Reporting by Osamu Tsukimori; Editing by Alex Richardson)

JAL to decline financial aid from Delta, AA: report

Hot News: Jobless claims on downward trend

NEW YORK (Reuters) – Stock index futures pointed to a lower open on Friday after a weak employment report dampened hopes for a strong rebound in the labor market.

The Labor Department said U.S. employers unexpectedly cut 85,000 jobs in December, while economists forecast that payrolls would be unchanged. The government revised November data to show the economy added 4,000 jobs rather than lost 11,000, as initially reported.

"Basically the economy continues to take three steps forward and two steps back. The employment numbers have been moving in a better direction. Here is a day when we take a step back," said David Katz, chief investment officer at Matrix Asset Advisors in New York.

S&P 500 futures lost 3.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dipped 15 points, and Nasdaq 100 futures fell 7 points.

James Bullard, president of the St. Louis Federal Reserve Bank, said Friday it would be good to see more improvement in the U.S. job market before exiting some stimulus programs. Speaking to university students in Shanghai, Bullard said the U guaranteed payday loan.S. economy was improving, but some policies to support the recovery should not be withdrawn yet.

In corporate news, Bank of America Corp (BAC.N) will pay bonuses to its investment bankers that are close to 2007 levels, as it tries to stem defections following the takeover of Merrill Lynch, the Wall Street Journal reported.

Citigroup lowered fourth-quarter earnings views on Goldman Sachs Group Inc (GS.N), Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N), and expects the three companies to report lower revenues from their fixed income, currency and commodities segments.

Goldman Sachs was sued by an Illinois pension fund seeking to recover billions of dollars in bonuses and other compensation being awarded for 2009, saying shareholders were harmed.

Exxon Mobil Corp (XOM.N) is looking to sign a contract for a Transocean Ltd (RIG.N) rig capable of drilling in Arctic waters that will cost up to &&6;1 billion to build, according to a source.

(Reporting by Angela Moon; additional Reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)

Stock futures point to lower open after weak payrolls data

TOKYO (Reuters) – Asian shares eased after hitting a 17-month high on Thursday, while the dollar was steady as investors kept caution before U.S. nonfarm payrolls data later in the week for hints on the greenback&&9;s direction.

Commodities came off the boil, dragged lower after China&&9;s central bank took steps to tighten monetary policy and soak up money from the financial system.

Industrial metals bore the brunt of commodities selling, which saw Shanghai copper erase a near-five percent gain and steel futures hit their downside limit. The weakness also extended into oil, which reversed early gains to trade half a percent lower, and gold also retreated.

The Australian dollar pared some of its gains hurt by profit-taking after jumping to a 15-month high against the yen and a two-year peak against the euro on the strong retail sales data, which added to the chances of another rise in interest rates as early as February.

China&&9;s central bank surprise hike in the auction yield of its three-month bills for the first time since mid-August prompted high-yielding currencies such as the Australian dollar to come off intraday peaks.

The U.S. dollar jumped against the yen after new Japanese Finance Minister Naoto Kan said he wanted the yen to weaken more. The dollar surged to the day&&9;s high of 92.82 yen, up from around 92.20 yen just before Kan&&9;s comments reached the market.

Many investors are turning their focus to U.S. non-farm payrolls data due out on Friday to wait for trading direction. The rate of job losses at U.S. private employers slowed in December to 84,000 from 145,000 in November but still exceeded the 72,000 expected by economists.

"Investors are waiting for the U.S. jobs report on Friday but the current climate of the market is one of investors willing to take risk," said Tomohiro Nishida, treasury department manager at Chuo Mitsui Trust and Banking.

Speaking in Shanghai, James Bullard, president of the St. Louis Federal Reserve Bank, said the market in the United States is improving and the economy is close to the point when the unemployment rate will start to fall.

He also said house prices were stabilizing, and that housing starts were likely to steady and cease to be a drag on growth.

Australian stocks (.AXJO) fell 0.5 percent, as surprisingly strong retail sales data stoked expectations for an interest rate rise next month, weighing on rate sensitive stocks such as banks.

Japan&&9;s Nikkei ( instant credit report.N225) slipped 0.5 percent, while South Korea&&9;s Kospi (.KS11) dropped 1.3 percent.

Samsung Electronics&&9; (005930.KS), riding a strong price recovery in its memory chips business and benefiting from booming flat screen TV sales, issued estimates that signal a promising year for consumer electronics. Its shares were off more than 3 percent after rising to a record ahead of the news.

The MSCI Index of Asia Pacific stocks outside Japan (.MIAPJ0000PUS), which has been trading at 17-month highs, edged down 0.7 percent. A similar Thomson Reuters index (.TRXFLDAXPU) shed 0.7 percent.

CHINA CONCERN

"If China were to show a clearer stance toward liquidity tightening in coming months, there is a possibility that market players would link it to the yuan&&9;s revaluation and raise worries about commodity and share prices," said Jun Kato, senior chief analyst at Shinkin Central Bank Research Institute.

Gold slipped on Thursday after reaching a three-week high above &&6;1,140 per ounce the previous day, weighed down by investors&&9; caution ahead of the U.S. jobs data. Spot gold was changing hands around &&6;1,133.40 an ounce as of 0611 GMT.

Crude oil for February delivery fell back below &&6;83 on Thursday after settling up &&6;1.41 a day earlier, its highest close since Oct 9, 2008.

The Australian dollar shone after retail sales rose 1.4 percent in November, strengthening expectations of a further interest rate hike, which stands at 3.75 percent after three 25-basis-point increases in as many months.

"Rates at the moment are just too low for an economy that has proven very resilient and has come out of a global recession rather unscathed," said Helen Kevans, an economist at JPMorgan.

"We expect rates at 4.5 percent mid-year and 5 percent by year-end."

The Aussie rose as far as &&6;0.9268 after the data before falling back to &&6;0.9203. It shot up as far as 85.54 yen, its highest since late September 2008.

The dollar index (.DXY), which measures the value of the greenback against a basket of currencies, edged up 0.2 percent to 77.633. It lost some ground against the euro the previous day after the release of the Fed minutes.

(Additional reporting by Jungyoung Park in SEOUL and Kaori Kaneko and Aiko Hayashi in TOKYO; Editing by Jan Dahinten)

Asia shares ease after rally; eyes on U.S. jobs

WASHINGTON – Auto lender GMAC Financial Services said Monday it expects to announce a combined fourth-quarter net loss of about $5 billion, hurt by its struggling mortgage division.

Detroit-based GMAC said a previously disclosed $3.8 billion pretax charge was the main driver of the anticipated losses, and it had taken steps to sell some of its mortgage assets following a third installment of federal aid.

GMAC received $3.8 billion in taxpayer money last week and has received $16 payday loan online.3 billion in total. The move boosted the government's ownership to 56 percent, from 35 percent.

The Obama administration has tried to keep GMAC alive as part of its rescue of automakers General Motors and Chrysler. GMAC provides wholesale financing to thousands of GM and Chrysler dealers.

GMAC expects $5B loss in 4th Q

Encouraging manufacturing reports from three continents on Monday reinforced the notion that the economy would continue to strengthen this year despite jitters in the housing markets. Stock market indices rose sharply on the news in the first trading session of the year.

The Dow Jones industrial average rose 155.91 points or 1.5 percent, to 10,583.96, and the broader Standard &&8; Poor&S217;s 500-stock index was up 1.6 percent or 17.89 points to 1,132.99, amplifying earlier gains in most European and Asian markets.

An increase in commodity prices lifted shares of oil and gas producers and companies that make industrial materials like plastic and chemicals. Oil futures climbed $2.15 to settle at $81.51 a barrel in New York trading on concerns about an energy dispute between Russia and its neighbor Belarus.

&S220;Our forecast has the private economy gaining enough momentum during the year to finally stand on its own by year end,&S221; Bernard Baumohl, chief global economist for the Economic Outlook Group in Princeton, N.J., wrote in a report released Monday. &S220;The combination of greater consumer and business spending, along with rising exports should keep growth firmly in positive territory throughout this year and next.&S221;

The Nasdaq got a lift from an analyst&S217;s report that upgraded shares of the Intel Corporation, which was trading about 2.6 percent higher. The Nasdaq was 1.73 percent or 39.27 points higher, at 2,308.42.

&S220;A lot of investors are thinking maybe our economic recovery will end up being stronger than anticipated,&S221; said Sam Stovall, chief investment strategist at Standard &&8; Poor&S217;s. &S220;Investors are like dieters, and they look to January as a new beginning.&S221;

Yet it was the manufacturing data that pushed shares higher. Investors embraced a report from the Institute for Supply Management showing that manufacturing activity rose in December, bolstered by increases in new orders, inventories and employment.

The group&S217;s manufacturing index rose to 55.9 from 53.6 in November, the highest reading since April 2006.

&S220;This was a complete package of good news,&S221; said Marc Pado, a market analyst at Cantor Fitzgerald. &S220;They&S217;re going to have to increase production more. They will need to hire people in order to meet that production. Demand is growing, not contracting.&S221;

Some economists warned however that the recovery in manufacturing could wane as businesses finish restocking their depleted inventories.

Yet companies that have slashed their inventories and pared their payrolls are seeing new orders &<51; a sign that activity is perking up even as offices and factories operate at reduced levels. After so many months of contraction and stagnation, some businesses will soon feel pressure to expand, analysts said.

And that is likely to presage more growth in the first quarter, and an eventual end to some two years of job losses.

&S220;Much will depend on the consumer,&S221; Joshua Shapiro, chief United States economist at MFR, wrote in a research note, &S220;and we feel that the headwinds for consumer spending (the foremost of which are ravaged balance sheets and lingering labor market weakness) remain too brisk to expect much help on this front.&S221;

Another report on Monday somewhat offset the upbeat manufacturing data and offered a reminder of the weakness in the housing market online payday loans. A Commerce Department report showed a slump in construction spending, which fell a seasonally adjusted 0.6 percent in November to its lowest levels in six years. The agency said that construction spending in November was 13.2 percent lower than November 2008.

Spending on home building fell 1.6 percent, accounting for much of the weakness.

The numbers could foreshadow more trouble for construction companies, which are struggling with tight credit and a drought of business, as interest rates begin to tick back up.

European shares were buoyed by a report showing that manufacturing output in the euro zone rose in December at the fastest pace since September 2007. The final Markit Eurozone manufacturing purchasing managers index rose to 51.6 points in December from 51.2 in November, in line with an earlier estimate, marking the fifth consecutive month of improvement.

The FTSE 100 index in London rose 1.6 percent, or 87.46 points to 5,500.34, while the DAX in Frankfurt was up about 1.5 percent or 90.87 points, to 6,048.30. In Paris, the CAC-40 rose 1.97 percent or 77.64 points to 4,013.97.

Rob Dobson, an economist at Markit, said that the data confirmed expectations that manufacturing in the region had &S220;ended the year on a positive note,&S221; representing &S220;a marked turnaround from the unprecedented downturn at the start of the year.&S221;

And in China, the latest survey showed that manufacturing activity expanded at the fastest rate on record in December. The HSBC Purchasing Managers&S217; Index rose to 56.1 from 55.7 a month earlier to reach its highest level since the survey began in April 2004.

The benchmark Nikkei 225 stock average in Tokyo closed 1 percent higher. The main Sydney market index, the S&&8;P/ASX 200, rose 0.1 percent. But the Hang Seng index in Hong Kong slipped 0.2 percent.

On Tuesday, investors will receive another indicator of the housing market when the National Association of Realtors releases new figures on pending home sales.

Later this week, the government will release its monthly unemployment report. Forecasts expect the unemployment rate to rise slightly, to 10.1 percent, from 10 in November, and job losses to continue to slow, but some observers say the report could show a net gain in payroll jobs for the first time since the recession began.

Automakers will report their latest sales figures, for December and 2009 overall, on Tuesday.

Many market-watchers view January as a bellwether for the rest of the year, even though the so-called &S220;January effect&S221; does not always hold up. January 2009 began with a stomach-churning 6 percent drop on the S.&&8;P. 500, dashing many investors&S217; hopes, until a blistering rally began on Wall Street and propelled the Dow some 20 percent higher for the year.

The dollar, which was lightly traded Friday, was mixed against other currencies. The euro rose to $1.4351 from $1.4337 Friday in New York, while the British pound rose to $1.6170 from $1.6151. The dollar fell to 92.82 yen from 93.02.

The yield on the benchmark 10-year United States Treasury note rose four one-hundredths of a point to 3.87 percent.

Signs of Economic Growth Buoy Stock Market

ATLANTA (Reuters) – The U.S. economy and job market will rebound only gradually because of ongoing constraints on lending, Federal Reserve Board Vice Chairman Donald Kohn said on Sunday.

This means inflation will remain contained for some time, he said in prepared remarks to the annual meeting of the American Economic Association.

"Lingering credit constraints are a key reason why I expect the strengthening in economic activity to be gradual and the drop in the unemployment rate to be slow," said Kohn, a senior and influential figure at the central bank.

The U.S. economy expanded 2.2 percent in the third quarter but only after registering its worst recession since the 1930s.

Kohn said the Fed&&9;s extraordinary stimulus measures, which included lowering interest rates to near zero and developing a host of unconventional lending facilities, helped engender that recovery.

He said that the Fed would have to begin pulling back, however, before things were completely back to normal.

"We will need to begin withdrawing extraordinary monetary stimulus well before the economy returns to high levels of resource utilization," he said savings account payday advance.

Kohn said the Fed had plenty of tools to accomplish this feat, including paying interest on the reserves that banks keep at the Fed.

Kohn also said it may be appropriate, if very difficult, to counter an apparently destabilizing spike in prices but argued that regulation, and not monetary policy, would be the best way to accomplish that.

"In the current situation, with output expected to be well below its potential for some time and inflation likely to be under the 2-percent level that many (Federal Open Market Committee) participants see as desirable over the long run, tightening policy to head off a perceived threat of asset price misalignment could be expensive in terms of medium-term economic stability," he said.

Fed's Kohn says economy, jobs will recover slowly

NANNING, Jan. 1 (Xinhua) -- China and the Association of Southeast Asian Nations (ASEAN) kicked off their free trade area (FTA) on Friday.

The world's largest FTA embracing developing countries covers a population of 1.9 billion and Related China-ASEAN FTA to boost intra-regional trade: business leader ASEAN-China FTA makes Vietnam-China trade easier and better Myanmar businessmen speak highly of China-ASEAN FTA establishment China-ASEAN FTA sets stage for economic integrationinvolves about 4.5 trillion U.S. dollars of trade volume.

The average tariff on goods from ASEAN countries to China is cut down to 0.1 percent from 9.8 percent.

The six original ASEAN members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, will slash the average tariff on Chinese goods from 12.8 percent to 0.6 percent. By 2015,the policy of zero-tariff rate for 90 percent of Chinese goods is expected to extend to the four new ASEAN members, Cambodia, Laos, Myanmar and Vietnam.

Dozens of trucks, mostly carrying dragon fruit from Vietnam, thronged border markets Friday morning, waiting to be unloaded at the Tianyuan Fruit Trade Market, one of China's largest market for fruit import, at the Pingxiang Port in Guangxi Zhuang Autonomous Region.

"The establishment of the free trade area is really good news for me," said Liu Yuzhen at the Tianyuan market, who has been trading fruits for 16 years.

She now sells more than 10 tonnes of apples, pears, oranges and other fruits to southeast Asia every day, and hopes her business will expand as the FTA will facilitate the customs clearance and reduce the logistics cost.

Gu Xiaosong, vice president of the Guangxi Academy of Social Sciences, said both ASEAN members and southern China provinces abound with tropical primary products like rubber and tropical fruits, and thus competition in the earlier stage of the FTA will be unavoidable.

"But such competition will eventually lead to optimization of the agricultural and industrial structures in the region, which will help form a more competitive entity in the global market," he said.

There is a provision in the FTA for a temporary delay in tariff reduction by reclassifying goods as "sensitive" and "highly sensitive" products low fee payday loans. A customer buys clothes at a market in Jakarta, capital of Indonesia, on Jan. 1, 2010. (Xinhua/Yue Yuewei)
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High-tariff items that include automobiles, rice and some petrochemical products are listed as "highly sensitive," thereby allowing both sides to reduce their tariffs below 50 percent by 2015 for original ASEAN members and 2018 for new members.

"China's efforts to establish the FTA aim not only at expanding overseas markets, but also promoting trade and investment liberalization, especially amid the global trade protectionism," said Zhang Monan, an economist with the State Information Center.

China and ASEAN members could cooperate in wider fields, from natural resources to high technologies, she said. "The further economic integration between the two sides could be very competitive in the global economy."

Her comments were echoed by Yang Tianpei, chairman of Malaysia-China Chamber of Commerce.

"China wants raw materials while Malaysia needs daily use articles and electric and mechanical products," he said. "The FTA will facilitate trade and reduce the prices."

"The Chinese enterprises can build factories in Malaysia to further reduce costs as well as increase jobs and revenues in Malaysia," he said.

Zhang said the FTA would also facilitate more cross-border yuan trade settlements and currency swap agreements between China and ASEAN members.

The cooperation will help ASEAN members become less dependent on the U.S. dollar, which has become highly volatile as a result of the global financial crisis, she said.

China's Vice Commerce Minister Gao Hucheng said earlier the establishment of the FTA will promote the regional economic integration, benefiting companies and consumers.

China and the ASEAN launched their cooperation dialogue in 1991 and signed the China-ASEAN Framework Agreement on Comprehensive Cooperation in 2002. Special Report: China-ASEAN FTA [1] [2] [3] [4]

China-ASEAN free trade area starts operation