Taiwanese investors have shaken off the effects of March's Chinese sabre rattling. Taiwanese investment on the mainland declined for the first few months after Chinas military maneuvers, but rebounded to a three-year high of $230 million in July. Taiwan seems to be confident of the prospects for long term Chinese stability.

The head of Australias Reserve Bank has predicted the establishment of an Asian Bank of International Settlement, linking Japan, New Zealand, Indonesia, South Korea, Malaysia, Singapore, Thailand, China, Hong Kong and the Phillippines.

Rumors are spreading that Japanese Prime Minister Hashimoto may call a snap election this fall. In fact, Liberal Democratic Party candidates have already started campaigning. The key reason for the snap election appears to be a split between LDP and SPD legislators over U.S. forces in Okinawa.

China has been expanding its involvement in Central and Southwest Asia, and has recently extended that interest to Iraq. Chinese and Iraqi officials signed a economic and trade cooperation agreement in early August.

The Ministry of International Trade and Industry has issued a report stating that Japan's storage capacity for nuclear waste will be exceeded in a few years. Expansion of nuclear storage facilities face stiff opposition. The solution being looked at is the construction of reprocessing plants overseas.

India and Pakistan continue to pose major stumbling blocks to the passage of the Comprehensive Test Ban Treaty (CTBT). A recent gathering of opposition political and religious parties in Pakistan blasted Prime Minister Benazir Bhutto's government for its weak stance on the Treaty.

A new government in Bangladesh means new opportunities for investors. Shortly after the new regime took office in July, they announced the end of lock-in restrictions which had stunted foreign investment since their imposition in 1995. Restrictions remain which limit foreign investors' purchases of initial primary offerings to 33 percent.

The U.S. embassy in Manila has denied rumours of alleged negotiations to establish a Navy base on Mindanao. While there is no solid evidence to refute the embassy statement, such negotiations would not be unexpected. The U.S.

Berlin Bank and the German Investment and Financial Establishment recently signed a long term loan of two million marks to Chemia Co., a Syrian chemical company. Next month, the German manufacturing firm Bosch will send a delegation to Israel to investigate investment possibilities.

Hungary's recent declaration in favor of autonomy for Hungarian minorities in Slovakia and Romania has been condemned in both countries as interference in their internal affairs.