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China to grant Sri Lanka tourism destination status
China has formally announced its decision to grant destination status to Sri Lanka enabling Chinese nationals to visit the country as tourists, Sri Lanka's embassy in Beijing said.

It said it had received an official communication from the China National Tourism Administration (CNTA) about the decision.

Talks in this connection will take place shortly and an agreement would be signed after negotiations. On completion of this process, Sri Lanka will become officially eligible to receive Chinese tourists. Presently 21 countries have been granted destination status by China. Last year around 10.5 million Chinese went abroad on vacation. "It is expected that the proposed agreement, once operational, would be a boon to the Sri Lankan tourism industry. According to Sri Lanka Tourist Board figures some 2,008 Chinese visited the country last year," the statement said.

Lionair sues for resumption of passenger services
The domestic civil aircraft operator Lionair recently filed action against the Director General of Civil Aviation seeking a licence to resume passenger services between Palaly and Ratmalana.

The petitioner alleged in the writ filed in the Court of Appeal that it was being unfairly denied a licence to operate domestic passenger services now that the ban on internal flights has been lifted.

Lionair also challenged the Civil Aviation Department's stipulated requirement that domestic operators need to have their aircraft registered in Sri Lanka.

Lionair has maintained that the existing air navigation regulations has no provision that such aircraft have to be registered in Sri Lanka.

The action comes in the wake of the removal of the ban on domestic flights and moves by other operators to start passenger services to Jaffna.

Private domestic flights were banned after a Lionair plane was shot down by the Tamil Tigers in September 1998. The civilian passenger shuttle service was then placed under the purview of the Sri Lanka Air Force which operated the Lionair aircraft and aircrews under its Helitours civil flights operation.

Now, altogether four operators appear to be in the fray to run the Jaffna air service - Lionair, SriLankan Airlines, Nahil Wijesuriya's Airlanka International and Expo Aviation.

Airlanka International recently advertised its domestic passenger air service to Jaffna although it is yet to get a licence to fly passengers.

Officials at the ticketing office said they were charging Rs. 5,900 for a return ticket and Rs. 3,000 one way for flights starting on April 20. The Lion Air flights cost Rs. 6,000 for a return.

Lionair chairman Chandran Ratnam said they were looking forward to resuming their flights to Palaly.

"We're making preparations to resume our domestic passenger flights to Jaffna" he said.

The carrier had applied for a licence from the Directorate of Civil Aviation, he said.
Lionair had done over 14,000 flights to Palaly and other destinations such as Koggala and Weerawila since 1994 and carried 561,178 passengers, Ratnam said.

Ratnam said he believed there would be room only for not more than two operators on the Jaffna route, particularly with demand expected to slacken with the reopening of the A9 highway.

HSBC profits fall in challenging year
Hongkong and Shanghai Banking Corporation reported lower profits last year largely owing to global economic problems, particularly the collapse of Argentina's economy.

Profit attributable to shareholders at $5.4 billion was $1.2 billion lower than the result achieved in 2000, HSBC Group chairman Sir John Bond said.

"2001 was a challenging year for the financial services industry," he said. "That HSBC performed well overall is a measure of the resilience of our business."

In many of the bank's major markets, the business environment deteriorated during the year.

The US economy slowed markedly with a corresponding impact on much of the rest of the world, especially those countries, including many in Asia, which export to it, Bond said.

"We grew revenues by $1.3 billion against cost growth of $1billion resulting in our operating profits before provisions rising $0.3 billion to $11.3 billion," he said.

"Adjusting for the impact of exchange rate movements the growth was 5.9 per cent. Our bad debt charge (excluding the $600 million Argentine additional general provision) absorbed 13.7 percent of our operating profit before provisions, rising by $0.5 billion to $1.4 billion," he said.

The bank took exceptional charges against its current exposure in Argentina amounting to $1.1 billion.

Commercial banking profitability fell in 2001 as a result of higher credit charges in Europe and the non-recurrence of 2000's provision recoveries in Asia-Pacific. Pre-tax profits fell 14 per cent to $2.4 billion.

Bond said the bank's wholesale banking activities produced "record results" in 2001.
Successes in corporate banking and in treasury and capital markets more than offset weak performance in corporate finance and equities business, he said. Pre-tax profits grew by $467 million to $4 billion.

Pre-tax profits from private banking activities fell by $135 million to $412 million.
However, the net inflow of funds was encouraging, amounting to $13.2 billion, Bond said.

The bank concentrated on integration and consolidation but also made 38 acquisitions and investments and completed 17 disposals, Bond said.
"We shall work to enhance our position in the commercial banking market and to build on our growing strengths in Personal Financial Services," he said, adding that the bank was "cautious" about the outlook for the year ahead.

Much will depend on the pace of recovery in the US with recent economic indicators providing mixed signals, Bond said.

"The robust consumer demand which has supported a number of western economies may prove hard to maintain as pressure on corporate profits leads to further industry restructuring and higher levels of unemployment," he said.
"Many of the world's largest industries and service sectors are still suffering from overcapacity, which will take time to absorb and may defer further investment."

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