Morning Market Roundup: Russian & Japanese Energy, Feds Sell AIG Stake, China Output Down

Here’s what’s important in the business world this morning:

Russia & Japan: Russia and Japan are putting energy cooperation ahead of a longstanding territorial dispute as they move ahead with a long-awaited liquefied natural gas project in this far eastern seaport.

Russian President Vladimir Putin and Japanese Prime Minister Yoshihiko Noda oversaw the signing of a memorandum for the $13 billion project with Japan's Agency for Natural Resources and Energy on Saturday, on the sidelines of a Pacific Rim summit, Russian oil and gas giant Gazprom said.

The project "will have a great meaning for developing the eastern part of the Unified Gas Supply System of Russia as well as raising Russian gas supplies to Asia-Pacific markets including Japan," Alexei Miller, Gazprom's chairman, said in a statement.

Feds & AIG: The U.S. government is selling more of its shares in insurer American International Group Inc., in a move that should decrease its holdings below a majority stake for the first time since the $182 billion bailout in 2008.

The sale is the latest step to recoup taxpayer money spent on the largest bailout of the financial crisis.

AIG said Sunday that the Treasury Department is selling $18 billion worth of its common shares to institutional investors.

If there is more demand, the government will grant the underwriters a 30-day option to buy up to $2.7 billion more of its stake in the company.

AIG said it will buy back $5 billion worth. The price is not yet determined.

The move should reduce the government's stake in AIG to less than 20 percent of the insurer's total outstanding stock. Right now, Treasury holds about 53 percent of the company, or more than 871 billion shares of common stock, worth about $30 billion.

China: Growth in China's factory production slowed to a three-year low in August, suggesting Beijing might need to launch more stimulus efforts to reverse a painful slowdown in the world's second-largest economy.

Inflation climbed to 2 percent as food prices rose, and further increases could complicate efforts by the government to revive growth as Europe struggles with a debt crisis and the U.S. economy remains sluggish.

Growth in industrial production weakened to 8.9 percent from July's 9.2 percent, according to National Bureau of Statistics figures released Sunday. August's growth was the most anemic since May 2009, when factory production grew 8.9 percent.

The government has cut interest rates twice since the start of June, but authorities are moving cautiously after Beijing's huge stimulus during the 2008 global crisis ignited inflation and a wasteful building boom. Growth slowed to a three-year low of 7.6 percent in the second quarter.

Markets: Financial markets have started the week on a fairly flat note as traders wait for further developments in Europe's debt crisis and the U.S. Federal Reserve's latest policy meeting.

Traders will have a number of events to monitor in Europe over the next few days including a meeting of euro finance ministers as well as the German Constitutional Court's verdict on the legality of Europe's planned permanent bailout fund.

Following sizeable gains last week, stocks are taking a breather Monday. In Europe, Germany's DAX was up 0.1 percent at 7,222 while the CAC-40 in France was unchanged at 3,519. The FTSE 100 index of leading British shares was also flat at 5,794.

The Associated Press contributed to this report.