08/11/2012 World Business Report

headlines from BBC World News. Now Hello and welcome to World Business

Report. Stock markets worldwide see heavy losses as investors fear

political deadlock in Washington will derail the US economy. Share

prices are tumbling after the current rate to the US. Mrs worries

about the so-called fiscal cliff. Plus, the battle to save the euro

continues. A narrow yes vote in Athens gives breathing space to the

European Central Bank as it holds its monthly policy meeting. As

President Obama moves back into the White House for his second term,

fears of budget deadlock between the president and Republican-

controlled Congress take centre stage on financial markets. In Asia

we are seeing heavy losses on share markets today as concerns mount

that $600 billion in spending cuts and tax increases in the US -

otherwise known as the fiscal cliff - are due to kick in on 1st January.

There are widespread predictions they could top the US back into

recession unless a deal is struck in Washington beforehand to change

the economic deadlines. On Wall Street some 300 points was wiped

off the Dow Jones Industrial average in the biggest sell-off in

a year - seeing all the main indices in the US down around 2.5%.

It is still going downwards in Asia? That is right. Asian investor

is a big specked by this latest development. A rating agency is

threatening to downgrade the US credit rating if a solution is not

settled. They said the US government triple-A rating would be

at risk if Congress and the President did not forge an

agreement immediately. Also not helping sentiment either the

European economy further deterioration. In China, a once in

a leadership change is not having much of an impact. Nothing concrete

on the Chinese economy. The focus is on the latest inflation and

industrial production data which will be coming out of the mainland

tomorrow. These developments have underpinned the safe-haven dollar

and the yen as well as US Treasuries. Equities have been sold

down from South Korea to Japan, Hong Kong and Australia. In the oil

markets, prices had rebounded after falling $4 overnight amid concerns

for fuel and European slowdown. They raised the persistent worry of

a slowdown in the global economy and that is what is hurting it

Asian markets today. As you've been hearing, late last night Greece's

parliament narrowly approved a new austerity package needed to unlock

the next tranche of EU IMF bailout money - already some 5 months

overdue. Without the 30 billion euro cash injection - Prime

Minister Antonis Samaras warned the country will run out of money on

November 16th. There have been violent protests in Athens but

there is likely to be relief in Frankfurt this morning where the

European Central Bank holds its monthly meeting. It is difficult.

In Greece, there is social unrest and yet relief that a European

central bank that there is this an break free? Absolutely. The deal

forged last night and on the Greece's books balanced till 2013.

Having enough room to get through. That should reassure the third that

things increase should make it through. The European Central Bank

are remaining in a white coat. They did say they were available to help

but as yet, Spain has not asked for help. Spain is probably going to

borrow all it needs this year, it has already issued 95% of what it

needs. Things are quite stable for Spain at the moment. The question

is that in 2013 when Spain has to borrow large amounts an investor

for workers will pick up again -- investor focus. That is when it

will pick up again and Spain will have to make a decision. For the

remainder of this year, and we do not have long, Spain is a cat but

in 2013, in Germany they have elections. Pressure on Angela

Merkel. We had these fiscal cliff in the US. We also so data that

suggested the eurozone economy, Germany particular, is weakening as

we move into the final quarter of the year. Even the assumptions

underpinning the fiscal projections that we're seeing bought 2012 and

13, they might be a little weaker and borrowing costs might increase

further. Thank you for your thoughts. China is in the process

of choosing its leaders for the next decade as the Communist

Party's 18th National Congress gets under way in Beijing. The congress

will run for a week, after which Hu Jintao is expected to be replaced

as leader by Xi Jinping. China's decade long economic boom now faces

a variety of headwinds. As Nigel Cassidy reports - the new

leadership will have to re-think the country's economic strategy.

Made in China may still be on the labels but that is changing. Expat

had slumped, pays a rising faster than productivity and returns are

not sufficient to meet the aspirations of an educated

population hungry for higher wages and better working conditions. I am

not at all satisfied. Entrepreneurs like me work a lot. Prices are

going up. Some Chinese companies are losing money. They can be given

credit and the latest technology by what the government cannot do is

innovate and produce products and services that people want to buy.

By going global can China find new markets, a better return for some

of its three trillion dollar cash resort and the management skills it

may lack at home. Acquisitions of utilities like ports in Greece, a

remand 13,000 overseas investments worth more than 420 billion US

dollars. Like China buying 10% of London's Heathrow Airport. We need

to understand the situation. The labour relations in the host

country. The as a buying spree may accelerate under the new leaders.

These are very high-margin market. There will be keen to break into

them. In addition, you have a lot of talent in the West, a lot of

experience in building companies and brand names. It think a lot of

these Chinese firms are looking to move on to the international stage

and they the acquisition of foreign companies as a good way of bringing

in the skills and experience they need. At trick like these mirror

the economic miracle. Now they are reeling from demand. Bike

enterprises in countries with slower growth -- buying enterprises

in slower countries may be the answer. Germany's number two bank

Commerzbank is set to reveal a shake-up involving major cuts when

it announces third quarter results later. On Wednesday it was reported

in the German press that the bank plans to slash up to 6,000 jobs, or

10%, of its workforce. Commerzbank, which received an 18 billion euro

bailout after the financial crisis, has been battered by the weak

eurozone economy and write-offs of Greek debt. Spain sells a new 20

year bond later today in a key test of investors' long term confidence

in the country. Madrid has so far resisted pressure to seek a

financial bailout. At the G20 meeting in Mexico over the weekend,

Economy Minister Luis de Guindos told reporters the country is well

financed for this year. India's Kingfisher Airlines says it lost

almost 140 million dollars in the three months to September after a

steep decline in revenues. The debt-ridden airline has been