Clouse, Thomas, Global Finance
With China's 4 trillion renminbi ($585 billion) stimulus package starting to show real results, the World Bank has upped its estimate for the country's 2009 GDP growth from 6.5% to 7.2%. China's fixed-asset investment increased by 32.9% in the first five months of the year, and consumer sales remained strong, up by 15.2% year-on-year in May. The World Bank also warned, however, that the effects of the government stimulus might not carry over into next year, especially if the global economy continues to struggle. Chinese exports continue to fall, decreasing by a record 26.4% year-on-year in May.
China's state-owned aluminum company Chinalco suffered a blow as Australia- and UK-based mining giant Rio Tinto pulled out of a $19.5 billion deal that would have given Chinalco access to some mining deposits and an 18% stake in the company. Rio Tinto will instead pay $195 million to break the agreement with Chinalco and, in a separate move, is entering a joint venture with long-time competitor BHP Billiton. The decision to terminate the Chinalco contract likely stemmed from rising raw-material prices and thus stronger business performance by Rio Tinto. …