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"Chinese state-owned enterprises generated aggregate pre-tax year-on-year growth of just 1.5 per cent in the first five months. Even striiping out oil refiners - which bear the cost of Beijing's fuel subsidies - leaves the number well below 2007's 30 per cent growth rate.
Much of the pain comes from margin contraction and reflects the region's deteriorating terms of trade (the price of exports, relative to imports). So far this year commodity costs have risen 23 times faster than export prices (...)."
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"Borrowing costs, which are likely to rise further as the region's central banks attempt to stem the surge in inflation, will make an ever bigger dent in the bottom line of big borrowers, among them the Indian companies making acqusitions overseas and Chinese real estate companies."
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