01/05/2012 World Business Report

Positive news from China's manufacturing sector and interest

rates in Australia on the move. It is time for World Business Report.

The headlines: China's manufacturing sector expands for

the fifth month in a row, easing concerns of a sharp slowdown.

Australia's Reserve Bank is set to announce another possible cut in

interest rates. The factory of the world, China, is

seen steady growth again. Its manufacturing sector expanded

slightly to its highest reading in a year. Can we put behind us fears

of a sharp slowdown in China? We will speak to power representative

in Beijing. Tell us about the indication, because it is going up

but not as much as some economists hoped for. This index indicates the

level of economic activity taking place in an economy. The figures

suggest activity has increased slightly bin China. It has done so

for the last five months. It suggests that the Chinese economy

is not doing too badly. The figures, as indicate, are slightly below

what some market analysts expected. They are still quite good. The

economy is expected to slow down this year because the rest of the

world is having trouble and are buying fewer goods from China. The

figure indicates it is not going too badly, it will not badly affect

the Chinese economy. The government has got two problems - inflation

which leaves it to restrict activity in the economy. They

appear to have that under control. Their main concern now is not to

hamper growth too much. They have been releasing credit, the

encouraging firms to expand economic activity. The figures

suggest that will continue. They do not want growth to slow down too

much. They don't want companies going out of business, laying off

people. They recognise the economy might slow down. They don't want it

to be too sharp a slowdown. Often when we have news about China's

economy there is a quick reaction but there have been market closures

because of May Day. Little reaction on the markets, perhaps, but

analysts have been speaking about it. The figures suggest that things

are OK with the Chinese economy but some of the longer term problems,

problems about growth have not been fully sold. Good news but still we

have got to wait to see what is to come.

Some use of we have heard in the last few moments from the central

bank in Australia. It has announced it has cut interest rates by 0.5%

to 3.75 %. That is the third cut in the cost of borrowing in seven

months. It has been prompted by worsening economic data in

Australia. We will get immediate reaction now from our correspondent

in Sydney. This is a bigger Cup than expected? It is. -- bigger cut.

The cash rate is down by 0.5%. We have not seen such a sizable

reduction since 2001. A very bold statement. The Reserve Bank has

been under pressure to ease the cost of borrowing. These show that

house prices in Australia fell last month and the manufacturing sector

continues to shrink. The Reserve Bank is taking this bold approach.

It has quite an impact when they do this, doesn't it? Quite a few

Australians who have got mortgages are on variable deals? Yes. This

0.5% reduction will be good news for about one-third of Australians

who are paying a mortgage. Another one-third are in their own homes

out right and another one-third are renters. For a sizable chunk of the

Australian population with a mortgage, this is very good news

indeed. The bank has been weighing up various economic indicators. Its

job is to guide the Australian economy. There has been weak

domestic GDP growth. It is worried about the non mining sector,

principally manufacturing and tourism. Inflation is that 1.6%,

that is outside of the Bank's target range of between 2-3 %. That

is why we have had this surprise cut in interest rates in Australia

today. Thank you very much. The Reserve Bank of Australia

cutting interest rates by 0.5%. Two years on from the disastrous

oil spill in the Gulf of Mexico, BP is announcing its latest figures.

It sold assets to pay for the crisis and margins have been

squeezed. It is promising investors it will refocus on expanding

production this year. BP is on the road to recovery, two

years after being plunged into crisis. It turned a $5 billion in

2010 in to wait $24 billion profit last year. It has reinstated its

dividend and gained record amounts of exploration site. In March it

agreed to a 7.8 billion dollar deal. This will assist those affected by

the Gulf of Mexico oil spill. Looking at how much further along

they are with the payment to third parties, in particular how the --

one company and a joint venture. While the oil and gas production is

below pre-crisis level it is poised to make up ground. BP has not only

resumed deep drilling in the Gulf of Mexico a of Mexico acured more than

50 new drilling licences in nine countries. It has benefited from

the higher oil price. This is the key to their plans for the future,

especially when it comes to settle in this litigation issues. BP is

testing its shareholders' loyalty. Without a manager Project on the

horizon, the share price continues to trial rivals.

Avon is calling today with its numbers highly scrutinised. It has

been battling poor sales and is the target of a rival. Plenty there for

the new chief executive to get your teeth into. This will the company's

first set of results with her at the home. What can she do to turn

the company around? In the 1950s, a Evonne perfected

the art of women selling beauty products to other women. -- Avon.

It is not that different today. This is one of the many part-time

sales reps in the United States. She fits the work around domestic

commitments. I do not neglect my family and I am happy. I am doing

this kind giving full time to my children. She lives and works from

this brand new housing complex about one hour's drive from New

York. Most of her business she gets by banging on doors but is also

experimenting with the internet and Facebook. The brand is having

trouble staying relevant. The list of woes is long. They have lost out

to competitors who are more nimble with social media and the internet.

The company is accused of breaking US anti- bribery laws overseas. The

share price is half the level of eight years ago. Analysts still

believe there is a business that can work. As women abroad start to

work and have more disposable income, one of the things they want

to spend money on his themselves. There is a lot of growth

opportunity still and they have to get themselves back on track

operationally. I am hoping the new management can turn the ship around,

so to speak. The company has just appointed a new chief executive. It

has rebuffed a takeover bid from a small rival. The turnaround is

still very much a work-in-progress. I would like to see him being made

A number of markets are closed due to May Day. Australia cut interest