21/06/2013 World Business Report


21/06/2013

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after he was found guilty of abduction.

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Those are the latest headlines from BBC World news. Time for the money

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news and what business report. -- Turmoil on global markets as

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investors face a world without the Federal Reserve stimulus. From

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stocks to bonds to commodities, nothing is spared the sell-off.

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It is a billion-dollar industry and growing fast, but will Brussels

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star that the boom in electronic A warm welcome to World Business

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Report. Also coming up in the programme: Talks in Beijing as

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Europe and China tried to head off a damaging trade war.

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Financial markets around the world have been in turmoil as investors

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come to terms with a new reality that the era of massive support

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from the US Federal Reserve is coming to an end. For years the

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board's most powerful central bank has been pumping billions of

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dollars into the financial system, keeping borrowing costs at rock

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bottom and pushing up the value of assets around the world.

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Confirmation from the Chief of the Federal Reserve that he is going to

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be winding down what we have been going quantitive easing it as the

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US in Proops has sparked a global sell-off in those assets. Major

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stock markets from Europe to India to South Africa also force of

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between 3-4 %. The S&P 500 had its worst day since 2011. Gold, silver,

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copper and oil also all plunged, as have bond prices. In just a moment

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we will be going to Asia, where markets are stabilising a little

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bit. But first this report from the New York Stock Exchange.

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US markets have been reacting poorly to the news that the US

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Federal Reserve may in fact start scaling back its stimulus programme

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a little earlier than anticipated. Since we heard from the chief on -

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the chief of the Fed, market in the US have been falling. On Thursday,

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the S&P saw its worst day since 2011, dropping by 2.5%. The Dow

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Jones also dropping by 2%. The markets have been craving clarity

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from the chairman, wanting to know when it would start scaling back it

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stimulus programme. Markets have heard what the chairman has to say

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and they have not like it one bit. In speaking with traders on the

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floor of the New York Stock Exchange, the sense is the sell-off

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will in fact continue. We're just a few weeks away from the Fourth of

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July holiday in the States, which is usually a slow period for market.

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Unless we hear some positive economic data in the next few days,

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the downward trend we are seeing is here to stay for the next little

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while. Let go straight to our reporter in

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a Singapore Bureau. How are things going in age at the moment? As you

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mentioned there is some stability in Asian markets in midday trading,

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but they are still at their lowest levels in almost ten months. Stocks,

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currencies, commodities being sold. Investors continued to digest the

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plan to scale back stimulus measures in the US. China's central

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bank offered some comfort as it told major state banks to resume

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told major state banks to resume supplying funds after tightening

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liquidity on Thursday. This is a little bit of fresh air for many

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investors who have been selling off their stocks over the past trading

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days. Australia currently training earlier losses. South Korean shares

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also curbing some of the losses also curbing some of the losses

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after it losing 2.5% in early trading. And Kong and Shanghai and

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shares are still down, but only by a few %. Japan's stock average, the

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Nikkei 225 down by 2%. Now law by 1%. Analysts say stocks are

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tumbling, but over the longer term, financial markets will regain

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stability as the US economy regains sustainable growth.

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The markets are still jittery. Let's talk about the smog. You and

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I were talking about it yesterday. I can see from the window behind

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you looks like it is getting worse. That leads on to the discussion

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about the economic impact of it. Just to give you some background.

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The smoggy is really bad. It has failed to new record highs. Now let

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401, a very hazardous and unhealthy level. Singapore has never

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experienced this kind of days. Even in the studio I still have to wear

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my mask after this broadcast. One economist said that the tourism

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industry, which makes up 5-6 % of GDP, will be hardest hit. The

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initial impact will be over $400 million. Other analysts say if the

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Government implement a stop work order, it will not only hurt

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tourism but also the construction and manufacturing industries. The

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economic cost could be in the range of $1 billion.

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I think if you can his best to stay Let's have to Beijing, where

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European Union leaders ended China's leaders will be trying to

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defuse a simmering trade dispute at a meeting later today. The row over

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China's solar panel exports is expected to be raised on the

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sidelines of annual trade talks between the two countries.

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Our correspondent has more. EU-China trade has mushroomed to

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more than $1 billion per day. When the one hand, a triumph of co-

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operation. The sheer volume of goods now flowing in both

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directions means that on the other end the disagreements become more

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acute. On the official agenda of the annual trade committee talks

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being held here in Beijing are the usual for the subject. Market

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access barriers and intellectual property protection for example. EU

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officials say that another, more specific and explosive issue will

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be discussed on the sidelines. The EU imposed tariffs on Chinese solar

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panels exports earlier this month following a finding that they were

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being dumped at artificially low prices. China has now launched an

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investigation into the prices of European wine exports. Some

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European big exporting countries are urging the EU trade

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commissioner to find a negotiated settlement before the issue spirals

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into a full-blown trade war. Let's move on to these. They are a

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billion-dollar industry and they are growing fast. Their supporters

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say they are a safer alternative to smoking. Electronics cigarettes you

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a battery-powered device to turn nicotine based liquid into vapour.

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They have divided regulators and anti-smoking activists. There is a

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debate on their health. Today EU health ministers will discuss

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proposals that could see some electronics regret we classified as

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medicinal products and that would subject them to extensive health

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testing and in some countries require that they be sold only in

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pharmacies. Catherine Devlin is from the trade association. She

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drew to be now from the Welsh capital, Cardiff. Are you worried

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about the outcome of these talks? Actually, No. Oddly I am

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increasingly confident because the MEPs and council members are

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actually in forming themselves of the facts of this issue. As they do

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that more and more, they can only reach the right conclusions, which

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is that electronic cigarettes can never be Medicinal Products. He

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would have to break them and redesign them to turn them into

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medicines. I am confident that we will end up with sensible

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proportion of reclamation -- proportional regulation that works

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to make sure everything is safe. Also, almost more importantly, we

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will keep them in the hands of smokers that have made the switch

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and want and need them. You say that there is no chance that

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electronics cigarettes will be classified as medicinal instruments,

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and yet you stand by the claim that they are vastly healthier than

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normal cigarettes? Absolutely. It does seem a bit incongruous, but

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the fact is that if you wanted to turn an electronic cigarette into a

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medicine, it could no longer be an electronics cigarette as they are

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currently working. Millions of smokers around the world have made

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the switch and are now no longer smoking tobacco, but are instead

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using electronic cigarettes. That has to be good for public health.

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The unfortunate thing about the netizens programme is that it would

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require delivery of controlled dosages and that is not what

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smokers are looking for. That is not what they get from the

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