15/11/2012 World Business Report

electricity. It is now time for the latest

financial news with World Business Here are the headlines: As the

challenge his mount for China's new leaders, we ask what the changeover

will mean for the world's number two economy.

Bad loans are on the rise at China's banks. The worst run of

figures since records began. And the eurozone's economic slump

continues. Growth numbers may confirm fears it is even fizzling

Good to have you do this. China's new Premier has been addressing the

Chinese people following the announcement of the new leadership

in the world's second-largest economy. He said they face serious

challengers and strengthening the economy is top priority. New

Saturday from China's banks indicates feeling grew that it may

be hard. -- fuelling growth. It has been a momentous day for China.

This news coming out about loans is not good at all, is it?

Absolutely. It is signalling trouble to come for the country's

new leadership. These delinquent loans increased for a fourth

straight quarter. The longest streak of deterioration since the

data became available eight years ago. It highlights growing

pressures on profitability as the economy continues to weaken. Non-

performing loans rose by a whopping $3.6 billion in the three months to

September to about 480,000,000,001. It comes from all financial

institutions. Chinese lenders are grappling with rising defaults and

we can loan demand after economic growth slowed for a seventh quarter.

Combine that income from all these banks -- combined income from all

these banks slumped down from 23%. We are seeing a growing downturn in

the profitability of the banks. Let's have further analysis now on

what the challengers are for the leadership in China. We go live to

a bureau in Beijing. We just heard that this rise in bad loans at

China's banks is not a good sign. That is certainly not very good

news. If we step a little bit back, today is a very exciting moment

because we just learned who the captain and the captain's bilby for

China's next 10 years. The government will be faced with a

whole series of economic and political challenges. Financial

reforms is one of the things they will have to target. Apart from

that there will be other things they need to look at, which

includes more liberation on immigration system. Social welfare

is important as well. It is important to remember that the new

government will be the one that is sitting on the seat making all

these changes. The background is really that China is now the second

largest economy in the world and it is going to be an economy that will

probably have its lowest economic growth since the night -- late

1990s. It is an exciting moment and we have just seen who is in charge,

but we knew he would get the top job. But what about the team as a

whole? That was shrouded in secrecy. Given that announcement, what can

you make of their plans for the economy? Justin Howe were ago we

saw through the final seven men are who are making into the important

panel. We see that this is a panel that is a mixture of those who

embrace the conservative approaches and those who would embrace the

liberal ones. If anything, the leader is still the important one.

We have not heard a formal work agenda from him yet, but judging

from past experience, it is important to know that his work in

the coastal provinces tell us that he is someone who is sympathetic to

those who advocate for more fresh and open market reforms. That is

always a pleasing sign. I'm glad to see you worry and read today. Will

we will leave it there. Thank you for your time.

As you have been hearing on Wednesday we saw a wave of petty

austerity protests and strikes across Europe. -- NT austerity.

Today GDP data it will be announced. In a few hours we will start to get

a sense of the depth of the slump in the eurozone as a whole. The

region's economy is predicted to contract again down 2.2 % when

compared to the second quarter. When you look at it conveyed to a

year ago, we are seeing a contraction of 0.7%. Some experts

are warning that these predictions are wildly optimistic, given the

factory surveys for September which prevent --. The bigger slump in

almost three years. The big worry is that the stronger parts of

Europe no longer hold up against the broader economic crisis. The

figures for France come out in an hour. They are expected to show

absolutely no growth at all in the third quarter. If we look at

Germany, this is even more worrying, they will reveal growth slowing to

just 0.2%. Not surprisingly the data is expected to confirm further

contentions for the economies of Italy and Spain. We go to a senior

economist from Brussels. Are you are in agreement with those

figures? Some economists believe the figures will be a lot worse in

the third quarter than what I have just spelled out. I more or less

agree with the figures. The risk is there that they could get worse.

The hall fear is the German economy remains rather stable and issued

help the eurozone as a whole to mask the enormous slump in the

southern countries. Your outlook, because this week we were focused

on Greece with their budgets creeping through the night before

in the Parliament. The year ahead for the eurozone will be very

difficult, won't it? Obviously the year ahead will be a tough one. In

the know at near-term it will probably get worse before it gets

better. The German economy could enter a period of contraction

towards the end of the year. This means that the eurozone economy

will probably and the rebound in the first half of next year at the

earliest. This puts enormous pressure on the reform agenda and

also on the elections. A are you optimistic or you pessimistic about

the outlook? Clearly we have the difficult year ahead and also, with

Greece, they have more time and therefore there is a whole

discussion going on about debt restructuring for Greece. I think

I'm moderately pessimistic. The worst-case scenario, Greece leaving

the eurozone or even a break-up of the eurozone, this has been

abolished. It means the eurozone will stick together, but at the

same time, the reforms that are undertaken in all countries, the

slowdown of the global economy, means that the will remain in a

very difficult economic environment, therefore growth will not return

any time soon, but the worst case is the break-up and that will not

happen. Most people would agree with you. When do you think we

might see some sort of turning point when it comes to the

following eurozone data as a region? And 2013. All we will still

need some time to see the structural reforms. Any country

like Spain will show some positive signs. At the same time, if the US

and Chinese economies would be able to pick up again in the first half

of the year, then Germany could benefit and there should also help

stabilise the eurozone economy. There is some hope, but in terms of

domestic developments, it is hard to see the eurozone countries

growing again any time soon. We have third-quarter earnings

results coming through, continuing in the US. We will hear from Wal-

Mart today. Wall Street is expecting better profits because of

a rush of sales on the east coast. It may also give an update on the

plus the -- cost of its ongoing investigation into foreign bribery.

Results from Dell. The once dominant PC maker is focusing on

large corporate customers. The enterprise market. Wall Street will

be looking at how hard the PC industry is being hit by the rise

of tabloid computers. The markets are quite mixed, as you

can see. Japan bucking the trend. Elsewhere we are seeing a bit of a

mixed picture emerging. If we take a look at the currencies quickly.