India’s food price inflation in the third week of December rose at its slowest pace in more than five years. The wholesale price index-based food inflation rate for the week ended Dec. 17 came in at 0.42 percent year over year, compared with 1.82 percent the previous week. It marked the eighth consecutive weekly decline for the inflation rate and the lowest reading since April 2006. However, the country’s headline inflation was more than 9 percent for the 12 months through November. India’s economic growth came in at 6.9 percent in the July to September quarter, the slowest pace of growth in more than two years.


Chinese official data revealed that regulators granted nearly USD1 billion in quotas for foreign investments into the country’s capital markets since October, a sign that Beijing is eager to encourage inbound investment to stem capital outflows. China’s Qualified Foreign Institutional Investor (QFII) program–which allows foreign institutions to invest in Chinese stocks and bonds–has extended quotas totaling USD1.92 billion in 2011, the smallest amount since 2007. The relatively low yearly figure for QFII approvals was partly due to a freeze in approvals from May through October. But the pace of approvals picked up noticeably in October after investors began to withdraw funds from China, analysts said.


China’s State Council appears to have given a key approval that will pave the way for the country to build a controversial USD3.8 billion hydroelectric dam on the Yangtze River. China’s cabinet approved changes that would reduce the size of a Yangtze River preserve that holds rare and endangered fish species. The decision, which was made public without fanfare in mid-December, is likely to pave the way for the construction of the Xionanhai Dam–an infrastructure project that has drawn criticism from environmental advocates. The dam must still receive approval from China’s Environment Ministry, but analysts said the State Council’s ruling strongly suggests the project will move ahead. The Xiaonanhai Dam, which will be located near China’s largest city of Chongqing, will produce 1,760 megawatts of power. Critics say that the relatively small size of this dam doesn’t justify the environmental impact and the forced relocation of an estimated 400,000 people. Xianonanhai is one of 19 dam projects that have been proposed or are under construction on the upper reaches of China’s Yangtze River. China already has 26,000 hydroelectric dams, more than any country in the world, as the country builds infrastructure at a blinding pace to fuel its economic growth.


China and Japan agreed to promote direct trade of the yen and the Chinese currency, the renminbi, in a move that will ease trade between Asia’s two largest economies. Due to China’s currency controls, Japanese and Chinese companies that seek to settle accounts must first convert their currencies into US dollars. China and Japan’s bilateral trade stood at USD340 billion in 2010. The decision, though initially small, is a symbolic move that indicates Beijing’s intention to eventually make the renminbi and fully convertible currency. A fully convertible currency would reduce trade friction between the US and China and establish the renminbi as a global reserve currency.


South Korea’s current account surplus in November rose to a 13-month high due to strong exports, the central bank said. The current account surplus rose to USD5.05 billion in November, up from USD4.13 billion the previous month, marking the highest surplus since October 2010. The current account–the broadest measure of the country’s international trade–marked its 21st straight month in surplus, despite a 5.1 percent yearly decline in exports to Europe. Total exports rose 12.6 percent year over year to USD47.1 billion, as imports rose 10.4 percent year over year to USD42.6 billion.