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The U.S. Treasury said it plans to sell $55 billion in long-term government debt this quarter and bring back auctions of three-year notes, as a slowing economy balloons the budget deficit to a record level.

The Treasury's quarterly refunding of longer-dated securities is the biggest in four years. Three-year notes, which had been suspended since May 2007, will now be issued on a monthly basis, the department said in Washington today. The government will also increase the frequency of 10-year and 30- year debt auctions.

Borrowing needs have surged in the wake of higher spending, a $700 billion financial rescue plan and plunge in tax receipts amid what economists estimate may be the worst recession since the early 1980s. Debt issuance may increase further after bond trading firms this week predicted the budget shortfall will more than double to $988 billion in 2009.

“These are highly uncertain times,'' Karthik Ramanathan, head of the Treasury's debt management, said in a press briefing. He said private deficit estimates “vary greatly, and the marketable borrowing estimates are even broader,'' ranging from a projected shortfall this year of $1.1 trillion to $2.1 trillion.

The Treasury plans to auction $25 billion in three-year notes on Nov. 10, $20 billion in 10-year notes Nov. 12 and $10 billion in 30-year bonds Nov. 13, the department said.

Most Since 2004

The total was in line with analysts' forecasts and was the largest quarterly figure since the first three months of 2004. The department last quarter said it was considering a second reopening of the 10-year note and a move to quarterly new issues of 30-year bonds.

In a Bloomberg News survey of six analysts, the median estimate predicted $25 billion in three-year note sales, $20 billion in 10-year-note sales and $8 billion in bond sales.

Three months ago, the Treasury's announced quarterly sales of $17 billion in 10-year notes and $10 billion in reopened 30- year bonds.

“We will continue to monitor projected financing needs and make adjustments as necessary including, but not limited to, the reintroduction or establishment of other benchmark securities,'' Ramanathan said in a statement.

The Bush administration's most recent budget forecast, issued in July, projected a $482 billion deficit for the 2009 fiscal year, which started Oct. 1. Since then, the government has taken over mortgage companies Fannie Mae and Freddie Mac, intervened to save insurance company American International Group Inc., and embarked on the bank rescue program.

$550 Billion

As a result, borrowing needs are expected to rise to a record $550 billion in the three months to Dec. 31, the Treasury said Nov. 3. That follows a $530 billion record in the July to September quarter bad credit pay day loans.

“From a fiscal perspective, borrowing requirements have steadily increased,'' the Treasury said in charts prepared for its advisory committee meeting. “The economic outlook continues to present challenges.''

The borrowing announcement noted that upcoming auctions of 10-year and 20-year Treasury Inflation Protected Securities, also known as TIPS, will help meet financing needs. In the department's meeting this week with bond dealers, there was debate over whether five-year TIPS are an effective way for the government to borrow.

Longer-Dated TIPS

“Recent cost studies as well as investor participation statistics suggest that TIPS issuance, particularly for shorter- dated TIPS, has not reduced borrowing costs nor diversified the investor base, both of which were objectives at the start of the program,'' minutes of the meeting said.

“Focusing on longer-dated TIPS may be an approach to reducing effective costs, capturing a higher inflation premium, and increasing liquidity among benchmark TIPS instruments while at the same time extending the duration of the portfolio,'' the Treasury said.

Ramanathan told reporters there were no immediate plans to change the TIPS borrowing calendar, which includes a prospective five-year note TIPS sale in April. He noted the cost studies and said the Treasury would consider their findings.

The government sells debt to finance the excess of spending over revenue. The Treasury also sells shorter-term debt on a monthly and weekly basis to manage the government's finances.

In today's announcement, the Treasury said it expects to issue cash-management bills, “some longer dated,'' during the current quarter. The Treasury said unscheduled reopenings of government securities will be the “exception'' in its debt management because the department has a policy of “transparency, regularity and predictability.''

Treasury, Fed

The Treasury also has borrowed money on behalf of the Federal Reserve, which has launched a slate of new lending programs to fight the credit crunch.

Ramanathan said in the statement that the department “strongly encourages'' financial firms to step up efforts to settle failed transactions in the secondary debt market.

“Recent market turbulence and the low level of short-term interest rates resulted in a substantial and broad increase in persistent fails in U.S. Treasury securities,'' Ramanathan said. “Other regulatory measures may be considered if private sector efforts are not implemented.''

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A former employee of Bill Heard Enterprises Inc., which filed for Chapter 11 in September, has sued the auto dealership claiming it violated federal labor laws by firing thousands of employees before seeking bankruptcy protection.

New York-based law firm Outten & Golden LLP is representing Edward Kratzel, who worked at a Bill Heard facility in Las Vegas until Sept. 24, and is seeking class action for the suit.

The suit, filed in Decatur, argues Columbus, Ga.-based Bill Heard and its 23 affiliated companies are required by the federal Worker Adjustment and Retraining Notification Act to give at least 60 days advance written notice of the job cuts and must continue paying certain wages, salary, and benefits during the notice period.

The suit seeks WARN Act-required wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions, and other benefits that would have been paid or covered during the notice period, and attorneys’ fees and litigation-related costs (pay day loan).

Outten & Golden wants to have the suit certified as a class action to include employees fired at Bill Heard-owned facilities in Alabama, Arizona, Georgia, Florida, Nevada, Tennessee and Texas, on or about Sept. 24.

In 2008, Bill Heard's dealerships had monthly losses ranging from $2 million to $5 million and on Sept. 24 the dealerships closed their doors.

William T. Heard Sr. founded the business with a single dealership in Columbus in 1919. In 1961, Bill Heard Jr. took over the company and grew it to 14 Chevrolet dealerships in seven states, including two in Florida, with one in Plant City.

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Constellation Brands Inc (STZ.N: Quote, Profile, Research, Stock Buzz), the world’s largest wine producer, posted a quarterly profit excluding items that beat Wall Street estimates by a penny, and maintained its full-year earnings outlook.

On a net basis the owner of Robert Mondavi and Ravenswood wines reported a loss for its fiscal second quarter of $22.7 million, or 11 cents per share, compared with a net profit of $72.1 million, or 33 cents per share, a year before.

Excluding restructuring charges, acquisition-related costs, inventory write-downs from selling some Australian assets and other items, Constellation earned a profit of 45 cents per share. Analysts on average were expecting 44 cents, according to Reuters Estimates.

Net sales rose 7 percent to $956.5 million, with branded wine sales growing 6 percent and spirits sales growing 4 percent.

Excluding the recent acquisitions of premium wine brands including Clos du Bois and Wild Horse, the company’s branded wine business rose 4 percent faxless online payday advances. In North America, wine sales rose 7 percent from the year-ago period, when the company sold much less wine in order to reduce distributors’ inventory levels.

Wine sales, excluding acquisitions, fell 3 percent in Europe and 1 percent in Australia and New Zealand. The company said recent price increases hurt sales volume.

Sales of the company’s spirits brands, which include Svedka Vodka, Black Velvet Canadian Whisky and 99 Schnapps, rose 4 percent.

The company maintained its prior earnings outlook for fiscal 2009, which ends in February, saying it expects to earn $1.68 to $1.76 per share, excluding items.

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U.K. retail sales unexpectedly increased in August for a second month as stores attracted shoppers with discounts on clothing and footwear.

Sales climbed 1.2 percent after rising 0.9 percent in July, the Office for National Statistics said today in London. Economists forecast a 0.5 percent decline, according to the median of 27 estimates in a Bloomberg News survey. On the year, sales increased 3.3 percent.

Unemployment rose the most in 16 years in August and the housing slump deepened as the credit squeeze intensified enough to prompt HBOS Plc, the nation's biggest mortgage lender, to agree to a takeover today. The Bank of England has still refrained from cutting interest rates since April as policy makers count on slowing growth to help control inflation.

“Some of this is the usual volatility in the data, but overall the picture for the consumer is very weak,'' said Nick Kounis, chief European economist at Fortis in Amsterdam and a former U.K. Treasury official. “The Bank of England will want to see inflation risks ease before it starts cutting rates.''

The pound was little changed against the dollar after the report, trading at $1.8203 as of 10:57 a.m. in London.

Food sales fell 0.2 percent on the month, while non-food sales increased 2.1 percent, the statistics office said. For the three months through August, sales dropped 0.8 percent, the most since 1991. Statistics officials said that this decline should be interpreted with caution because of the record monthly increase reported in May.

Clothing, Footwear

Sales of textiles, clothing, and footwear increased 4.1 percent from July, the statistics office said. Prices of those items dropped 2.5 percent from a year earlier and have shown an annual decline in every month since July 2007. Sales at household goods stores also rose, with a gain of 1.7 percent.

Kingfisher Plc, Europe's largest home-improvement retailer, rose the most since 2000 in London trading today after reduced discounting helped first-half profit to top analysts' estimates even as U.K., Irish and Spanish house prices slid no fax payday loans.

Claims for unemployment benefits rose by 32,500 in August, the most since 1992, the statistics office said yesterday, as companies from banks to homebuilders cut jobs while the global credit squeeze worsened. House prices fell 12.7 percent from a year earlier, HBOS said on Sept. 4.

Recession Forecast

The U.K. economy will shrink in the third and fourth quarters, according to a Sept. 10 forecast by the European Commission. Growth stalled in the second quarter as consumer spending dropped for the first time in three years.

Lloyds TSB Group Plc agreed to buy HBOS today to rescue it from the worsening credit crisis. The Bank of England joined the Federal Reserve, European Central Bank and counterparts around the world in offering an additional $180 billion today to markets facing their worst crisis since the 1920s.

Bank of England Governor Mervyn King said in a letter to Chancellor of the Exchequer Alistair Darling on Sept. 16 that policy makers are determined to tame consumer prices inflation jumped to 4.7 percent in August, more than double the bank's 2 percent target.

The annual retail price deflator, which shows cost changes in stores, rose 0.9 percent on the year as food prices increased 6.6 percent, the most since 1991, the statistics office said.

German discount retailers Aldi Group and Lidl kept increasing their share of the U.K. grocery market this summer as food inflation accelerated, according to a Sept. 16 report from market researcher Taylor Nelson Sofres Plc.

The rate-setting Monetary Policy Committee has “become firmer in its belief that a period of muted economic growth is necessary to dampen pressures on prices and wages and return inflation to the target in the medium term,'' King said.

Eight of the nine-member rate-setting panel voted to keep borrowing costs at 5 percent, minutes of the Sept. 4 decision published yesterday show. David Blanchflower wanted a half-point cut, the biggest since 2001.

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Federal Reserve Chairman Ben S. Bernanke is betting he can use targeted emergency loans rather than another interest-rate cut to pull Wall Street through the credit crisis.

The Fed kept the benchmark rate at 2 percent yesterday, citing risks to growth and inflation. Two days earlier, officials allowed securities firms use equities as loan collateral to ease the impact of Lehman Brothers Holdings Inc.'s bankruptcy. Hours after the meeting, the Fed agreed to an $85 billion loan as part of a government takeover of American International Group Inc.

By rebuffing calls by some investors for a rate cut, the central bank aims to meet its mandate to ensure stable prices while counting on auctions of cash and Treasuries and direct loans to address the credit crunch.

Policy makers believe “lowering the funds rate is a blunt instrument and not aimed at financial markets,'' said Stuart Hoffman, chief U.S. economist at PNC Financial Services Group in Pittsburgh and a former Fed economist. Instead, officials are relying on “creative and innovative ways to get funds into the financial system.''

At the same time, the Fed edged closer yesterday to a rate reduction by saying in a statement after their meeting that financial-market strains have “increased significantly.''

Employment is weakening, export growth is slowing and risks to growth and inflation are “both of significant concern,'' the central bank said in its statement. After their Aug. 5 meeting, policy makers said such concerns applied only to inflation. The central bank yesterday dropped a reference last month to rising expectations that prices will increase.

`Push the Committee'

“The outcome is going to be driven by the incoming data,'' former St. Louis Fed President William Poole said in an interview with Bloomberg Television. If retail sales, industrial production and employment are weak, “that is going to push the committee probably to cut rates.''

Tumbling commodity prices, including a 37 percent decline in crude oil from a July 11 peak, ease pressure on the Fed to fight against inflation. The consumer price index fell 0.1 percent in August, the Labor Department said yesterday. So-called core prices, which exclude food and energy, rose 0.2 percent after a 0.3 percent gain in July.

The rout sparked by the collapse of the U.S. subprime mortgage market has cost financial institutions worldwide $516 billion in writedowns and losses since the start of 2007. Firms have raised $362 billion of capital in response.

Since the credit crisis began in August 2007, the Fed has lowered the rate on direct loans to commercial banks and created one loan program for banks and two for securities firms paydayloans. It also secured the sale of Bear Stearns Cos. to JPMorgan Chase & Co. by taking on $29 billion of mortgage-backed debt and other assets.

AIG Takeover

Late yesterday, the Fed agreed to an $85 billion loan for AIG, the insurer hit by billions of dollars of writedowns on investments in securities tied to mortgages. The government will get a 79.9 percent equity interest in the company as a result.

Fed staff officials told reporters on a conference call that AIG's extensive operations across financial markets, including substantial business outside of insurance regulators' jurisdiction, meant the company needed rescuing.

“The Fed is reasonably confident that the fundamental and liquidity problems in the financial markets can be adequately addressed with the various tools they have at their disposal,'' said David Resler, chief economist at Nomura Securities International Inc., in New York. “It doesn't require a shotgun approach to macroeconomic policy.''

Rate Cuts

New lending mechanisms and rate cuts totaling 3.25 percentage points in the past year have so far failed to revive lending among banks.

Central banks around the world pumped more than $210 billion into the financial system this week as they sought to alleviate the credit-market seizure.

The New York Fed injected $70 billion of temporary reserves into the banking system yesterday and $70 billion Sept. 15, the most since the September 2001 terrorist attacks. The central bank has also provided billions of dollars through direct loans of cash and Treasuries.

Still, banks are hoarding cash, driving up short-term lending rates.

The cost of borrowing in dollars overnight more than doubled to the highest since 2001. The overnight dollar rate soared 3.33 percentage points to 6.44 percent yesterday, its biggest jump in at least seven years, according to the British Bankers' Association. The rate was as low as 2.07 percent in June.

Economists anticipate the economy will slow to a 1.2 percent annual growth rate, or less than half the prior quarter's pace, as consumer spending, the biggest part of the economy, stalls this quarter, according to a Bloomberg survey this month.

“The financial-market turmoil we have seen has tightened financial conditions,'' Brian Sack, who used to serve as head of monetary and financial market analysis at the Fed and is now a vice president at Macroeconomic Advisers in Washington, said in a Bloomberg Radio interview. “That is really going to impart some restraint on the economy.''

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European Central Bank council member Axel Weber said the outlook for inflation has brightened and the recent fall in oil prices is “reassuring.''

“We're more confident now than a few weeks ago that the recent developments have contributed toward meeting our objective'' to ensure price stability, Weber said in a press briefing today after a meeting of European finance officials in Nice, France. Still, “I don't think we're in the situation that we can give the all-clear yet.''

Oil prices have receded from a record $147.27 a barrel in July, while they are still up more than 26 percent over the past year, crimping consumers' and companies' spending power. The ECB is concerned companies will raise prices to pass on higher raw- material costs and unions will push through bigger raises to compensate workers for the increased cost of living.

Euro-region inflation is currently at 3.8 percent after reaching a 16-year high of 4 percent in July, still almost double the ECB's limit of just below 2 percent.

The drop in oil and commodity prices “will help us to work toward our stability mandate,'' Weber said. “On the other hand, there are many pipeline effects,'' he added, referring to import and producer prices that may filter through into consumer-price inflation.

`Astonishingly High'

The ECB raised its inflation projections this month to around 3.5 percent for 2008 and 2.6 percent for 2009. At the same time, ECB staff lowered their growth forecasts for this year and next to about 1.4 percent and 1.2 percent, respectively free credit report .com.

Some of the recent wage demands are “astonishingly high'' and do not fully take into account the economic perspective and the price developments that the ECB foresees, Weber said. “We're seeing much stronger wage pressure than in the past.''

Europe's economy shrank 0.2 percent in the second quarter from the previous three months and may not recover in the current period as exports falter and consumer spending slumps. The contraction was the first since the introduction of the euro in 1999.

IG Metall, Germany's biggest labor union, representing 3.5 million workers, said Sept. 8 it will seek a pay increase of between 7 percent and 8 percent when wage negotiations start on Oct. 2. That would be the biggest pay increase in at least 16 years. Workers at Ireland's Electricity Supply Board are demanding an 11.25 percent raise.

“We will do what is needed'' to ensure price stability, Weber said. “We're not pre-committed at this stage.''

Weber's ECB colleague, Nout Wellink, said in an interview this week that interest rates are “adequate'' and there is no need to change them “at this very moment.'' He added that “it all depends on a very large extent on how wages are going to behave in the period ahead.''

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Sullivan Auto Group is consolidating its Saturn of Roseville operation into the adjacent John L. Sullivan Chevrolet in the Roseville Automall. It's the latest local auto dealer to be affected by the economic downturn and flagging auto sales.

As part of the consolidation, about 30 Sullivan Auto Group employees have been laid off or reduced to part-time from full-time in the past 90 days, said David Rodgers, senior vice president and general manager of the group. The layoffs affected both operations, he said. "We’re trying to place as many as we can at our other retail locations."

About a half-dozen Saturn of Roseville workers and a "handful" at the Chevrolet dealership lost their jobs, mostly mechanics and other service employees, said Steve Ruckels, controller for Sullivan Auto Group.

The Sullivan Auto Group operates five local dealerships. Saturn of Roseville will remain a separate business, managed from the nearby Chevrolet site at 700 Automall Drive.

"It's still in business payday loan. It's still its own entity," Rodgers said. "The transition should be completely seamless for Saturn owners or buyers."

Longtime local dealer John L. Sullivan will continue to sell new Saturns at Saturn of Roseville, 750 Automall Drive, and service the brand there. What’s new, however, is that Saturns also can be serviced or purchased at the Chevrolet dealership.

"It's no secret the domestics are struggling right now," Rodgers said of the consolidation. "There are a few too many domestic stores throughout this country for every (auto) line."

The Sullivan group first added Saturn to its brands in Roseville in 2002, selling them from a trailer at the Chevrolet dealership.

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Canadian software company Open Text Corp. is offering to buy Captaris Inc. for $131 million, or $4.80 per share.

Bellevue-based Captaris (NASDAQ: CAPA) had recently turned down a slightly smaller offer from private equity firm Vector Capital, which had offered $125 million in March for the software company.

Open Text (NASDAQ: OTEX) is based in Waterloo, Ontario, and employs about 2,900 people payday loans.

Shares in Captaris jumped more than 24 percent in early Thursday trading, rising 91 cents to $4.65.

Captaris is the state’s 57th-largest public company based on its 2007 revenue of $94.8 million and employs 450 people, according to Puget Sound Business Journal research.

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Hawaii’s national parks have been seeing fewer visitors this year, according to the most recent data from the National Park Service.

There were 2.7 million visitors to Hawaii’s national parks year-to-date as of July, down 9.4 percent from the more than 3 million visitors during the same period in 2007,

In July, Hawaii’s parks saw 15.1 percent fewer visitors, down from 501,842 in 2007 to 425,946 in 2008.

Overall, the biggest declines were seen at Hawaii Volcanoes National Park, despite the recent activity from Kilauea. There were fewer visitors to the park in July, down 17.2 percent from 151,606 visitors in 2007 to 125,588 visitors this year. Year to date there was a 13.5 percent decline from 881,719 visitors a year ago to 762,680 visitors this year.

The USS Arizona Memorial at Pearl Harbor, Hawaii’s top tourist attraction last year, saw a 8.9 percent decline in July, from 151,648 visitors in 2007 to 138,225 this year payday loan. Year to date, visitors were down 5.7 percent from 924,450 in 2007 to 872,032 this year.

Visitor counts at Puukohola Heaiau (Big Island) were down 16 percent to 6,651 visitors in July; Puuhonua o Honaunau (Big Island), down 26 percent to 30,888; and down nearly 19 percent to 105,028 visitors at Haleakala National Park (Maui). Visitor counts for July were flat at Kaloko Honokohau and Kalaupapa (Molokai), at 14,357 and 5,209 visitors, respectively.

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China's leaders are planning tax cuts and a public-works spending spree to make sure their economy's growth isn't doused along with the Olympic flame.

Ten of 11 Summer Olympics host nations analyzed by Morgan Stanley economist Stephen Jen saw growth and investment slump in the year following the games; the only exception in his study, which stretches back to 1956, was the U.S. in 1996. Government officials in China, whose expansion was already slowing before the Beijing games ended last month, are determined to avoid what Jen calls the “Olympic Curse.''

That would provide a welcome boost for some of China's Asian neighbors, including Korea and Taiwan, as well as for commodity producers from Australia to Brazil whose economies are threatened by faltering demand from the U.S., Japan and Europe.

“The Chinese authorities will do whatever they can to avoid a sharp slowdown,'' says Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which manages about $108 billion. “China's economy will be a key pillar of strength for Asia.''

China has already eased lending restrictions and halted an appreciation of the yuan that was starting to pinch exports. Now, after four straight quarters of decelerating gross domestic product growth, the government is considering a fiscal stimulus of as much as 400 billion yuan ($58 billion), according to economists and reports in domestic news media.

Tax Cuts and Spending

A plan awaiting approval from the State Council and the National People's Congress includes 220 billion yuan of spending and 150 billion yuan of tax cuts, the Beijing-based Economic Observer newspaper reported last week.

China has tripled railway spending this year to 300 billion yuan. The current five-year plan, which runs through 2010, calls for investing almost 4.8 trillion yuan on power stations, waterways, roads and other infrastructure projects — more than the combined output of Taiwan, Thailand and Vietnam. Reconstruction after May's Sichuan earthquake could cost another 1 trillion yuan, the government says.

“As the Chinese economy moderates, official priorities are tilting towards maintaining growth and employment,'' says Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong. “China's infrastructure spending could even accelerate after the games.''

China might go beyond fiscal stimulus. The People's Bank of China said Aug. 15 it would “fine-tune'' monetary policy to cushion the economy as overseas demand weakens. Frank Gong, head of China research at JPMorgan, expects the central bank to reduce the portion of deposits banks are required to hold as reserves by 2.5 percentage points, to 15 percent, by next year.

`Foot Off the Brake'

China's inflation rate “is coming down, so they have got potential to take their foot off the brake and ease up on monetary policy,'' AMP's Oliver says. The rate peaked at 8.7 percent in February and was 6.3 percent in July.

China's growth slowed to a 10.1 percent annual rate in the second quarter after a recent high of 12.6 percent in the second quarter of 2007. Some economists say China's expansion — still the fastest among the world's 20 biggest economies — remains strong enough to maintain its momentum without new spending or monetary easing. “But it's an uncertain world situation, so a month or two from now, those plans may look very smart,'' says David Dollar, the World Bank's director for China.

About 20,000 Hong Kong-owned businesses will close or relocate from China's nearby Guangdong province by the end of this year, in part because of slowing export demand, according to the Hong Kong Small and Medium Enterprises Association no fax payday loan.

Manufacturing Contracts

Manufacturing contracted for a second month in August, according to the Purchasing Managers' Index released today by the China Federation of Logistics and Purchasing.

In a country where the number of new job-seekers each year exceeds the number of jobs created by 20 million, a decline in economic growth to even 8 percent would be tantamount to a recession, says Tao Dong, chief Asia economist with Credit Suisse AG in Hong Kong. Anything “below 9 percent would make the authorities quite nervous,'' he says.

That figure is significant for China's neighbors as well. For every 1 percentage point that China increases its growth rate, the rest of Asia will be boosted by half that, says Huang Yiping, chief Asia economist at Citigroup Inc. in Hong Kong.

Among countries with the most at stake are Taiwan, which shipped almost 36 percent of its total exports to China last year; South Korea, which sent 25 percent; and Japan, which shipped 19 percent, according to UBS AG.

Replacing the U.S.

Japan, whose economy shrank at an annual rate of 2.4 percent last quarter, would be even worse off without strong demand from China, which replaced the U.S. as Japan's biggest customer in July. Komatsu Ltd., Japan's largest maker of earthmovers, reported in July that sales in China gained 37 percent in the quarter, while revenue from North and South America declined.

“With Europe and the U.S. starting to struggle, and Asia starting to buckle, you don't want all engines sputtering at the same time,'' says Rob Subbaraman, chief Asia economist at Lehman Brothers Holdings Inc. in Hong Kong. “It will be more and more helpful if China can keep its economy on an even keel.''

China's spending will also help demand for commodities — from iron ore mined in Australia to copper produced in Chile. China is the world's biggest consumer of coal, steel, aluminum, iron ore, nickel ore, copper and natural rubber.

“Raw-materials demand in China is going to be very strong for decades to come,'' Marius Kloppers, chief executive officer of BHP Billiton Ltd., said Aug. 18. China's appetite for steel will double by 2015, said Kloppers, whose Melbourne-based firm is the world's biggest mining company.

`Aggressive' Price Gains

Price gains for copper through 2010 will be “aggressive'' because of limited supplies and Chinese demand, Citigroup said in an Aug. 18 report.

As one of the last remaining engines of growth, China may help keep the global economy from slipping into its first recession since 2001-2002. Economists at the International Monetary Fund deem anything less than a 3 percent world growth rate as a global recession.

“Continued robust, albeit slowing, growth in China and the rest of the emerging markets is a major driver of our view that the world economy will grow by a healthy 3.6 percent next year after 3.9 percent in 2008,'' said Binit Patel, international economist with Goldman Sachs in London, in an Aug. 21 report.

China has ample funds to pay for pro-growth policies, with outstanding debt of only 15.7 percent of GDP, compared with 75 percent in India, a budget surplus and the world's largest currency reserves, at $1.8 trillion.

“This is one country that's been saving during the boom time,'' says the World Bank's Dollar. “If exports drop off sharply and consumers get cautious, they can come in very quickly with government spending or tax reductions.''

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