Finance news. My opinion.

John Morse Jr., The Washington Post Co.’s chief financial officer, will retire at the end of the year.

Morse, 61, has been the Post’s top finance officer since 1989. A successor will be named soon, the company said in a statement.

"Nineteen years is an extraordinary tenure for a CFO, but in Jay’s case I wish it were longer," said Donald Graham, the company’s chief executive officer, in a statement. "I’ve often said that Jay was old-fashioned in his regard for standards before it became fashionable to be so."

During Morse’s tenure at the Post (NYSE: WPO), revenue triple to $4.2 billion in 2007 http://fcrwizard.com.

Before joining the company, Morse was a partner at Price Waterhouse. He is currently on the boards of Host Hotels & Resorts Inc. and the Northern Virginia Technology Council. He is also president of the College Foundation at the University of Virginia.

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Edward Kang spent 15 years building textile maker Ever-Glory International into a symbol of China's world dominance in cheap clothes, shoes and toys. With $70 million in annual sales, the company has won customers including Levi Strauss & Co. and Tesco Plc.

With rising labor costs and the yuan's appreciation against the dollar threatening profits, Kang, 45, considered moving from Nanjing, near China's Pacific coast, to the interior to take advantage of a government program to entice businesses into lower-wage provinces. He decided instead to shift 40 percent of his manufacturing capacity to a new plant in northern Vietnam's port city of Haiphong within five years.

The provincial Chinese workers didn't have the appropriate experience, and transportation to distant ports was too expensive, Kang says: “If we cannot meet customers' price expectations, they will say `Bye-bye, Ever-Glory.'''

Thousands of companies are arriving at similar conclusions. With Vietnam, India and other Asian nations mounting aggressive campaigns for foreign investment, a third of the manufacturers in Guangdong province — which produces 30 percent of China's exports — will be closed in three years, according to an April 29 report by Tao Dong, chief Asia economist at Credit Suisse in Hong Kong.

“The end of an era in terms of China's mighty export industry has just begun,'' he said.

Foreign Shores

The factory closures and departures to foreign shores aren't likely to dampen growth in the world's fastest expanding major economy, as China increases its production of higher- value goods — computer chips, electronic gadgets, automobiles.

What it does, in the world's largest Communist country, is increase the disparity between residents in the wealthy coastal areas and the more than 700 million people in inland provinces — more than half China's population — who may find themselves excluded from the country's success story.

“It is absolutely key that China push its development model westward,'' says Stephen Roach, chairman of Morgan Stanley's Asia division in Hong Kong. “The jury's out on whether they will pull it off.''

China's shipments of higher-technology products surged 412 percent since 2002 to 347.8 billion yuan ($47.6 billion) last year, or 28.5 percent of total exports, fueling 11.9 percent growth in gross domestic product. The economy is forecast to expand 10 percent this year and 9.5 percent in 2009, according to 21 economists surveyed by Bloomberg.

Cheap Labor

Growth is concentrated mainly in four provinces on China's southeastern coast: Guangdong, Jiangsu, Fujian and Zhejiang. Clothing, shoe and toymakers there sparked China's manufacturing boom, with much of the initial push coming from foreign companies attracted by cheap labor, easy access to ports and special economic zones that offered duty-free imports and other tax incentives.

China won more than 65 percent of the $792 billion in investment received by 21 Asian countries during the past five years, according to the Asian Development Bank. Such dominance prompted Singapore's founding father, Lee Kuan Yew, to say in 2002 that China is “a vacuum cleaner for foreign direct investment.''

About 90 percent of the money has gone into the coastal southeast, which accounts for 60 percent of the country's total exports. That's helped to double average monthly pay in the Guangdong province city of Dongguan, China's largest manufacturing center, to 2,594 yuan in December 2006 from 1,284 yuan in 2001, according to New York-based CEIC Data, an economic-research firm.

Poorest Regions

So far, the rest of China hasn't shared in the prosperity. Incomes in western China's poorest regions are one-tenth those of the richest areas on the east coast. The average monthly wage for the city of Gansu in the northwest is 1,437 yuan.

To help encourage investment and narrow the disparity, the government adopted a “Go West'' policy in 2000 free credit report and score. It spent 1 trillion yuan through 2005 on 70 major infrastructure programs including a 1,140 kilometer railway to Lhasa, Tibet's capital, according to China's National Development and Reform Commission. In mid-2006, the government added 168 billion yuan for regional airports, hydropower stations and other projects.

Even with the improvements, power failures, substandard roads and congested railways reduced production in 2004 by 9.5 percent in Kunming, the capital of Yunnan province in the southwest, according to a World Bank report. Such issues cut output during the same period only 2.3 percent in Shanghai, on the Pacific coast.

`Fragmented and Inefficient'

The transportation industry remains fragmented and “inefficient,'' Beijing-based World Bank economist Zhao Min wrote in a recent report. Better integration of rail lines, waterways and roads “could considerably reduce'' costs and increase “the competitiveness of the interior regions,'' she said.

Other disadvantages: The expense of setting up a business in the inland southwest is nearly three times higher than in the coastal southeast, and obtaining credit takes more than twice as long, according to the World Bank in “Doing Business in China 2008.''

The yuan's 4.45 percent rise against the dollar in the first four months of 2008, nearly twice the rate of last year's appreciation, is also eroding profits because China's exports are priced in dollars. The currency climbed 7 percent in 2007.

Investment Intentions

Foreign companies announced last year that they intend to invest $11.6 billion in central and western China, up 30 percent from $8.9 billion in 2003, according to Belfast-based FDI Intelligence, a provider of data on foreign direct investment. That's well below companies' investment intentions for Vietnam, which totaled $40.1 billion in 2007, up 354 percent from 2003, and for India, which rose 174 percent to $52.6 billion, FDII said.

Zhejiang Hefeng Shoes Co., with one factory in Zhejiang province employing 1,000 people, is examining relocation options that include Vietnam, according to export manager Ray King. “Customers say our prices are crazy,'' he says. “They always say other suppliers in Vietnam and Thailand are cheaper.''

Vietnam and India have become more aggressive in luring low-cost industries. Vietnam joined the World Trade Organization in 2007, giving it greater access to world markets. PricewaterhouseCoopers last July ranked it as the most competitive destination for manufacturing businesses among the world's top 20 emerging markets; China was second.

Low Wages

Vietnam's laborers earn an average of 1.669 million dong ($104) a month, 41 percent less than China's lowest-paid workers in the central province of Jiangxi, according to World Bank data.

India's wages are lower than Vietnam's, averaging 3,843 rupees ($87) a month, according to CEIC. India is copying China's special economic zones, building more than 400 that will provide low-cost land and rents, five- to 10-year tax breaks and duty-free imports.

It has been a member of the WTO since Jan. 1, 1995, and ranked 7th in the PricewaterhouseCoopers report, behind Vietnam, China, Poland, Chile, Malaysia and Thailand.

The labor-cost comparison became even more favorable for Vietnam and India in January, when a new Chinese labor law required companies to pay minimum wages and severance pay. The law contributed to a 22 percent increase in labor costs during the past year, according to the Federation of Hong Kong Industries.

The absence of such laws “anchored China's status as the world's factory,'' Tao said in the Credit Suisse report. That advantage “has gone overnight.''

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The McClatchy Co. continues to slash its estimated value of its investment in The Seattle Times Co., as both the local daily and the newspaper industry continue to reel from lost revenue.

The Sacramento-based company said its 49.5 percent stake in the Times has a carrying value of $12.06 million, down 38 percent from the value McClatchy (NYSE: MNI) calculated in December, according to a Securities and Exchange Commission filing late Friday.

The write-down follows series of similar moves in the past 18 months.

McClatchy had valued its interest in The Seattle Times Co. at $102.2 million at the end of 2006 and $89.9 million in June http://pay-day-home.com. In December, McClatchy dropped its estimated value of the investment to $19.3 million.

McClatchy is the nation’s third-largest newspaper company, with 30 daily newspapers and direct marketing and direct mail operations.

The company reported a first-quarter loss of $993,000, compared to $14.5 million a year ago.

McClatchy reported first-quarter revenue of $488.3 million, down 13.8 percent from first-quarter 2007. Advertising revenue fell 15.3 percent from the first quarter of 2007, and circulation revenues were down 5.6 percent.

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Australia's central bank raised its inflation forecast and said economic growth will slow as consumers reduce spending amid record gasoline prices and the highest borrowing costs in 12 years.

There “is evidence that demand has slowed, but it will take some time for this to have a substantial impact on inflation,'' the Reserve Bank of Australia said in its quarterly policy statement released in Sydney today. Inflation will peak late this year at 4.5 percent before falling below the bank's 3 percent limit in 2010.

The nation's currency fell on speculation Governor Glenn Stevens will refrain from interest rates again this year, after boosting its benchmark to 7.25 percent in March, the fourth increase in seven months. The government has said it will cut spending in next week's budget to ease pressure on prices, which surged at the fastest pace in 17 years in the first quarter.

“The Reserve Bank remains on hold for a prolonged period,'' said Rory Robertson, an interest-rate strategist at Macquarie Group Ltd. in Sydney. “Right now they've got reasons to think they have done enough, but obviously there are risks, particularly with the commodity price boom being so large.''

The Australian dollar pared earlier gains, falling to 94.03 U.S. cents at 4:34 p.m. in Sydney from 94.41 cents immediately before the report. The two-year government bond yield declined 5 basis points, or 0.08 percentage point, to 6.37 percent.

China Demand

Rising demand from China for resources including iron-ore and coal may offset the impact of slower domestic spending on the $1 trillion economy, now in its 17th year of expansion.

“It is possible that the recent weakness in consumer sentiment and domestic spending will prove to be mostly temporary, especially in light of the large boost to national income'' from exports, the bank said today.

The nation's terms of trade, a measure of export income, will rise by around 20 percent this year as new coal and iron ore contracts take effect, “well above the average increase over the past four years, and higher than appeared likely a few months ago,'' the central bank said.

Demand for exports is prompting companies including Rio Tinto Group to spend A$57.9 billion ($54 billion) developing mines and oil fields, stoking a record 18-month employment boom that has generated 456,000 new jobs.

Skills Shortage

Australia's labor market conditions “remained strong,'' today's report said, reinforcing figures published yesterday showing employment rose in April by twice as much as economists forecast. The jobless rate was 4.2 percent last month, close to the lowest in more than three decades.

Concern that a shortage of skilled workers is driving up wages and stoking inflation was a key reason Stevens and his board raised borrowing costs in March, February, November and August faxless payday advances.

There is a risk that expectations for higher inflation may become “entrenched at higher than acceptable levels,'' driving up wages and prices, the bank said today.

Core annual inflation surged to 4.4 percent in the first quarter from 3.8 percent in the previous three months, a report showed on April 23. The bank aims to keep annual prices increases between 2 percent and 3 percent on average.

“The high rate of underlying inflation in the March quarter indicates that demand pressures that have been evident for some time are continuing to have a significant effect on pricing, and are allowing increases in input costs to be passed through into final prices,'' today's report said.

Growth Forecast

The jump in consumer prices has occurred “in an environment of limited spare capacity and earlier strong demand,'' the bank said. “A significant slowing in the growth of demand from the rapid pace of 2007 will be needed in order to return inflation to the target over time. There are signs that such moderation is now occurring.''

The central bank cut its forecast today for growth in June 2009 to 2.75 percent from the 3 percent predicted in February. Gross domestic product will expand 2.5 percent in June 2010, compared with a previous outlook of 3 percent.

Recent reports support the central bank's view that the nation's economy is losing momentum. March home-building approvals fell six times as much as economists forecast, sales of newly built houses dropped for a second month, consumer confidence plunged in April to the lowest since 1993, and companies remained pessimistic for a third month in March.

Mortgage Rates

GDP slowed to 0.6 percent in the fourth quarter from the previous three months, when it expanded 1.1 percent. The first- quarter GDP report will be released on June 4.

Households, grappling with higher gasoline and food costs, are also facing extra increases in mortgage rates by commercial banks. The nation's five largest lenders, led by Commonwealth Bank of Australia, have added an average of almost 90 basis points, or 0.9 percentage point, to home-loan interest rates this year. The Reserve Bank has added only 50 basis points in that time.

“A noticeable restraining impact is being exerted on household and business borrowing and on all overall domestic demand,'' today's report said. Borrowing by companies has slowed significantly, it said.

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Kauai Veterans Memorial Hospital recently received state approval to provide magnetic resonance imaging services.

The State Health Planning and Development Agency approved the Waimea hospital's application for a certificate of need to provide MRI services for the west side of Kauai. Equipment and installation is expected to cost nearly $400,000.

Kauai has just one MRI scanner, at Wilcox Memorial Hospital in Lihue, and officials at Kauai Veterans said the service was sorely needed on the west side, where they expect to conduct more than 2,000 MRI scans a year http://payday-badcredit.com.

Kauai Veterans Memorial Hospital is part of the Hawaii Health Systems Corp., the state's 13-member public hospital network.

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A&B Properties Inc., the real-estate subsidiary of Alexander & Baldwin Inc. has received final-zoning approval for Maui Business Park Phase II, a 179-acre master project scheduled to begin construction in 2010 in Kahului, Maui.

On Friday, Maui Mayor Charmaine Tavares signed an ordinance, which passed by the Maui County Council on April 18, rezoning the property to light industrial.

To promote sustainability, A&B will develop a nonpotable water system for the project and will use energy-efficient building design and recycling programs faxless payday loans.

A&B will contribute at least 20 acres for one or more wastewater treatment plants and will build a new bypass road to ease traffic on Dairy Road. In addition, the company will give 40 acres of land for affordable housing, seven acres for a community center and three acres for a park.

Honolulu-based A&B (Nasdaq: ALEX) has ocean transportation, real estate and coffee and sugar operations.

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Home furnishings retailer Linens ‘N Things filed for Chapter 11 bankruptcy protection Friday and said it will close 120 underperforming stores as part of its restructuring, including its store in Beaverton.

Clifton, N.J.-based Linens Holding Co., parent of the chain, said the Chapter 11 filing was largely the result of the economic downturn.

"The significant deterioration in the mortgage, housing and credit markets and the resulting impact on the retail marketplace, particularly the home sector, has overwhelmed the operating and merchandising improvements that we have made over the past two years," said Robert J. DiNicola, Linens Holding executive chairman, in a release. "We are making the strategic decision to use a Chapter 11 filing to proactively address our capital structure and ensure that our stores will remain well stocked while we work through the steps to align the capital structure of the company with the realities of today’s business environment."

Linens ‘n Things logged $2.8 billion in sales in 2007 direct payday loan cash advance. It operates 589 stores in 47 U.S. states and seven Canadian provinces. In addition to the store in Tanasbourne Town Center in Beaverton that will be shuttered, the chain has six others in Oregon.

The company’s Canadian stores, which are among the strongest performers in the chain, are not included in the filing and there are no plans for a bankruptcy filing in Canada, Linens Holding said.

The company has secured $700 million in debtor-in-possession financing from General Electric Capital Corp., which Linens Holding said will ensure healthy merchandise flow as it gets ready for the back-to-school and holiday selling seasons.

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Hawaiian Airlines announced a significant boost in interisland fares on Wednesday, along with increased service fees and a $25 charge for checking a second bag on Mainland flights.

The airline is raising interisland fares by $5 to $20 each way beginning Thursday. Hawaiian’s lowest fare will increase from $49 to $54. The company said an additional $5 will be charged to customers flying between Honolulu and Hilo and Kona to cover the fuel costs for the longer flights.

The airline said it had to raise prices to help cover dramatic increases in the price of jet fuel. The move is the first since the shutdown of Hawaiian’s primary interisland competitor, Aloha Airlines, on March 31.

"The sudden shutdown of airlines locally and nationally these past few weeks shows how critically important it is for Hawaiian to cover its costs," said Mark Dunkerley, Hawaiian Airlines president and CEO.

Customers who choose to buy tickets over the phone through Hawaiian’s reservations department will also pay an additional $5 each way, an effort by the airline to get more customers to book their flights online.

Hawaiian also announced it will begin charging passengers a $25 fee each way for checking a second bag on domestic flights between Hawaii and the Mainland. The fee will not apply to interisland flights or to transpacific international flights to the Philippines, Australia, American Samoa and Tahiti. The baggage fee starts June 10.

Hawaiian joins a number of its larger competitors in charging for the second bag, which is seen as a way of generating new revenue and cutting down on weight aboard flights, which saves fuel cash advance loans.

Also on Wednesday, Hawaiian Holdings reported a loss of $19.9 million, or 42 cents per share, on operating revenue of $251.2 million during the first quarter.

The parent company of Hawaiian Airlines (Amex: HA) cited record fuel prices as one of the reasons for the loss.

Aircraft fuel costs increased 53.5 percent year-over-year to $91 million and represented about 33 percent of operating costs, the company said.

"Like every other U.S. carrier, record fuel prices and excess capacity were the major negative influences on our first quarter results," Dunkerley said. "Since Aloha and ATA did not cease operations until after the quarter’s end, our results for the period were not affected by these material developments."

Dunkerley said the airline is better positioned to meet the rising fuel costs now that capacity has been reduced by the Aloha and ATA shutdowns and demand for the company’s services have not slowed. Hawaiian reported an operating loss of $22 million in the first quarter of 2008 compared to a loss of $16.1 million in the first quarter of 2007.

Shares of Hawaiian Holdings closed up slightly on Wednesday to $7.95.

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