January 7, 2003

Chinese officials say they plan to maintain fixed exchange rate for country's principal currency because it has helped China achieve strong economic growth; Prime Min Zhu Rongji says policy of pegging currency, called yuan or renminbi, to US dollar at fixed rate has raised record foreign exchange reserves, increased exports and improved China's 'national strength'; US and Asian nations had hoped China would allow currency to float as dollar, euro, Japanese yen and almost all other major currencies do (M)

Auto industry is growing increasingly intent on coming up with vehicles for ultrarich; latest among crop of new models aimed at chauffeured class is 1,000-horsepower prototype from Cadillac division of General Motors, the Sixteen, which was shown at North American International Auto Show in Detroit; car is pet project of GM vice president Robert A Lutz; other all-frills shown at show include Phantom, first Rolls-Royce produced by company's owner BMW, new inexpensive Bentley from Volkswagen, the Continental GT, which will cost $160,000 when it goes on sale in 2004, and Maybach from DaimlerChrysler; photo (M)

White House officials roll out statistics and new details of Pres Bush's sweeping tax plan day before he unveils it, in effort to head off criticism that it favors only the rich; White House spokesman Ari Fleischer says plan would provide 92 million taxpayers with average tax cut of $1,083 this year and that family of four with $39,000 in earnings could save about $1,100; Bush's proposal to eliminate taxes on corporate dividends paid to shareholders has electrified investors on Wall St; in focusing on dividend plan, which would cost federal treasury $300 billion over 10 years, Bush has selected one proposal within his economic plan that most emphatically benefits sliver of nation's richest households; most economists remain skeptical that plan would provide much of jolt to either corporate investment or consumer spending; wealthiest 1 percent of all taxpayers would receive 42 percent of savings from making dividends to shareholders tax-free, according to calculations by Tax Policy Center, nonprofit research group run by Urban Institute and Brookings Institution; calculations are based on tax data showing that overwhelming bulk of dividends are paid to people at highest income levels; breadth and boldness of Bush's proposal stuns lawmakers in both parties; charts (L)

Exhibition Illegal Art at CBGB's 313 Gallery offers free giveaways of music, visual art and video pieces, challenging copyright protections; photos; curator Carrie McLaren contends that free distribution is protected by 'fair use' provision in copyright law that allows for parody and commentary (M)

National Football League announces that its game officials erred in game between Giants and 49ers and that Giants should have had one more play to save themselves from second-worst collapse in league playoff history; Giants squandered 24-point lead in second half of game, losing to 49ers 39-38; league now says that when penalty for ineligible receivers down field was called on Giants after holder Matt Allen threw incomplete pass after botched field goal attempt, penalty should have also been called on San Francisco, and offsetting infractions would have resulted in one more play; Giants could have tried another field goal from same distance; game recalled; chart with game-by-game review of Giants' place-kicking unit during this season; photos (L)

News analysis: Pres Bush, in proposing to eliminate taxes on stock dividends, is gambling that millions of people who got into stock market for first time over last decade and are now suffering consequences will be vital both to renewed prosperity and to his own electoral success; economists say it is not clear that putting more cash in hands of investors and trying to give market lift will provide much help to economy in the short run; political analysts disagree about whether investors make up definable voting bloc that can be won over with break on investment income, or even boost to value of depleted portfolios; some Democratic critics even question existence of so-called investor class as anything other than excuse for Republicans to cut taxes again for wealthy; about half of all households now have some investments in stocks and bonds, and about two-thirds of voters are investors, making stock market increasingly compelling subject; Democratic critics claim Bush's focus on dividends came about because other options appealing to conservatives, like corporate tax cuts, are politically problematic for White House in aftermath of corporate accounting scandals; graph (M)

Britannic Group, British financial services company, will not pay year-end dividend and will instead use money to bolster reserves; graph (S)

Republican Party picks New York City as site of its 2004 national convention; this will be first time in heavily Democratic city's history that it will play host to Republican convention; Republican officials say they chose New York over Tampa and New Orleans in part because of enormous political and emotional symbolism that has become attached to city since Sept 11, 2001, and because New York offered best package of financial incentives, including pledge to raise $53 million in private contributions to defray estimated cost of $80 million for gathering; Mayor Michael R Bloomberg and Gov George E Pataki, both Republicans, lobbied urgently for convention to be held at Madison Square Garden, arguing that it would be psychological and financial lift to city during difficult times; recommendation by Republican site selection committee is expected to be ratified by members of Republican National Committee at its annual meeting in Washington this month; photo; maps and charts listing sites of Democratic and Republican national conventions since 1900 (L)

BHP Billiton's chief executive Brian Gilbertson resigns afet just six months on job; is succeeded by Chip Goodyear; photo (M)

New York Giants coach Jim Fassel says holder Matt Allen should have known to call timeout after bad snap instead of throwing ball downfield after botched field-goal attempt during playoff game against San Francisco 49ers; photo (M)

New York City Mayor Michael Bloomberg calls for additional cuts from most city agencies of 6 percent for fiscal year 2004; Department of Education and uniformed services are being asked to trim their budgets by 3 percent; administration hopes to save more than $500 million from this round of cuts; city faces budget gap in 2004 estimated to be between $2.3 billion and $3.5 billion (M)

Footlights column notes Metropolitan Opera Guild show Great Moments in 20th-Century Music; Euripides tragedy The Children of Herakles, directed by Peter Sellars at Loeb Drama Center in Cambridge; Twelfth Night, starring Simon Russell Beale, opening spring season at Brooklyn Academy of Music; photos (S)