Business this week

Nov 10th 2005
From The Economist print edition

The United States signed a three-year textile-trade deal with China that limits its imports on 34 categories of products. The EU reached a similar agreement with China during the summer. A dispute has been rumbling since January 1st, when World Trade Organisation rules lifting barriers to entry on Chinese clothes came into effect, causing a surge in imports.

Qualcomm said it had filed a lawsuit against Nokia accusing the mobile-phone manufacturer of infringing its patents on GSM technology, used in most of the world's mobile-phones. The litigation comes after Nokia and five other firms complained to the EU that Qualcomm was using unfair and anti-competitive practices when licensing patents for its chips.

Deutsche Telekom, which last week announced a staff restructuring plan that cuts a net 19,000 jobs, posted a third-quarter profit of €2.4 billion ($2.9 billion), compared with a loss of €1.7 billion a year ago, on the back of growth in its T-Mobile unit. The firm also revealed a €1.2 billion plan to invest in new products next year.

Liberty Media appointed Greg Maffei as its new chief executive (Mr Maffei is stepping down as Oracle's chief financial officer). John Malone (who in effect controls the firm and remains chairman) also said the firm was creating tracking shares as a precursor to a possible spin-off of some units, including its QVC home-shopping business.

Serono's share price rose sharply after the company confirmed it was seeking advice on “strategic alternatives”. Speculation has been increasing that the Swiss biotechnology firm, Europe's biggest, is looking for a buyer (Serono says there are “no assurances” of a transaction).

Vietnam said it had obtained a licence from Roche to begin local production of Tamiflu, an antiviral drug touted as the best defence against bird flu. The Swiss drugs group, which will choose the local firms involved, had said earlier that it was on track to make a tenfold increase (on 2004's levels) in Tamiflu production by 2007.


In a move to comply with South Africa's new Black Economic Empowerment laws, De Beers announced that it would sell a 26% stake, worth 3.8 billion rand ($562m), in its South African diamond-mining operations to a company that will be half-owned by its employees and pensioners and half by an investment firm managed by blacks. The world's biggest producer of diamonds was established in 1888 by Cecil Rhodes.

Amid hostile public opinion, the heads of America's oil companies were hauled in front of a Senate committee and questioned about the rise in consumer energy prices and the industry's record profits. The bosses blamed hurricanes and tight oil supplies.

Platinum prices hit $956 an ounce, their highest level since March 1980. Platinum's price is considered to be the most speculative in commodity trading, and demand has been fuelled by tougher worldwide pollution standards for vehicles: the metal is used in catalytic converters to clean exhaust fumes.