05/03/2014 World Business Report

latest headlines from BBC World News. Now for the latest financial

news and World Business Report. Setting the years agenda - China's

leaders gather in Beijing, as investors hope a new round of

economic reforms will be announced. -- year's. Growing pains -

Australia's economy grows 0.8% as mining takes a back seat and

domestic consumption rides to the rescue.

Welcome to World Business Report. I'm Maryam Moshiri. First, some

breaking news coming from the newswires. We are expecting

elections to start in India. The latest report coming out suggests

the polling will start on the 7th of April in India. That is a breaking

news. Elections happening at an important time for the government

during this time of economic trouble in India. More on that story that

India will have polling for its elections on the 7th of April. But

first, China's parliament has started its annual congress today in

Beijing. Some three thousand delegates will attend the National

People's Congress for the next ten days. In the first session delegates

heard from President Xi Jinping and Premier Li Keqiang, and from an

economic point of view there were a few key topics that were touched on.

In the opening remarks, the leaders confirmed that China's growth target

for the year will stay at 7.5%. They also said that they want private

companies to take a bigger role in the economy and will continue to

open up state owned enterprises. The government has also increased its

defence spend by another 12.2% taking the total spend to well over

$120 billion a year - China now has the second biggest defence budget in

the world - the US is the only country with a larger military

spend. And finally, as the week goes on, we are to find out more details

on how the government plans to tackle local government debts and

improve its current fiscal position. What are the main topics on the

agenda we need to look out for? Having to do with economic reform.

As you said, the growth target remains at 7.5% but it is also the

case this is a better slogan and there are doubts as to whether China

can achieve that without the regulation improving the efficiency

of private firms and trying to break the grip on state enterprises. What

sectors might be privatised is important. The other thing is what

will happen to the financial. One of the big concern is for China is that

in order to achieve its growth rate it is allowing credit to stop the

government almost turning a blind eye. To grow as support investment.

If that was to happen, that would be worrying. In Li Keqiang's speech we

got eight flavour of it. They may unleash some credit but that goes

against the idea of trying to rein back local government debt. Informal

lending is a big cause of that. Looking at that target, most Western

economies would be jealous but China needs to find a balance between

growth but also trying to pare back on to strong economic growth?

Essentially, 7.5% would be very high if you were a rich country like

Britain or the US. But for developing countries, where average

incomes are a 000 dollars per year, that is a growth rate needed in

order to move them into middle income status. -- $8,000. It is a

hard thing to do to sustain eight growth rate that would be nine -

10%. Now that China is getting closer to the middle income level,

growth is slowing down. That is a hard transition to manage. If it

slows down too quickly, China will not be able to break through the

middle income. If it grows too quickly, via shadow banking

financing and unsustainable investment, it is building up a

credit bubble that could burst and that is ultimately the issue

underpinning concerns. How sustainable is the growth funded by

credit? Another big issue coming through this Congress is corruption.

One of the things they are not doing is allowing big banquets and

receptions. The Chinese government wants to emphasise they are more

transparent, less corrupt and dealing with fundamental issues.

Companies should be confident, therefore, in the coming weeks.

Interesting times. You will have the latest from the Congress throughout

the week. Australia has reported slightly better-than-expected growth

for the last quarter of 2013, boosted by exports and domestic

consumption. Official figures show that the economy expanded 0.8% in

the three months of 2013. Most forecasters predicted growth of

0.7%. Rico Hizon joins me now for more on this. The mining sector only

contributed 0.1% to the economy. Revival in consumption and of

resource export are setting this. This is a sign that is been

weathering a slowdown in the mining sector. Household consumption is

coming back after a long slow down. Taking it biggest increase in the

years. Housing prices boosting consumer confidence. As for goods

exports, a lot of it is heading to the mainland. An increase of 45%.

The Treasurer said that despite positive reports, the numbers

highlight the growth challenges the economy faces in the next couple of

years as some mining programmes come to an end. Can the growth be

sustained? The aim is to maintain economic growth of 7.5% in China.

This is good news for Australia which could lead to purchasers of

more resources. One ink on as a spoke to say it could lead to

sustained economic growth this quarter and going forward. How much

is borrowed from future exports. This could be on the margins but

there could be enough exports to support offset the mining sector

slowdown. The better than expected data helped the Sydney stock market

but also the Australian dollar. Always good to get an update from

you. Thank you very much. In other news: Fast food giant McDonalds has

said that growing concerns over income inequality may force it to

raise its wages. It said the public focus on the issue may intensify

over the coming months. But it warned that higher wages might

impact its profit margins if it cannot offset them by raising prices

as well. Fast food companies have been under increasing pressure to

raise wages and workers at various outlets, including McDonalds, have

held strikes in recent months. Japan is considering taxing transactions

involving the digital currency bitcoin. The Nikkei newspaper

reported any taxation would become the basis for guidelines applicable

to similar currencies in the future. The move comes following the

collapse of the Tokyo based Mount Gox bitcoin exchange last week. A

judge in the United States has ruled that lawyers representing Amazonian

villagers used fraud to secure a multi-billion-dollar pollution

judgement against the oil company Chevron in Ecuador. It's a major

setback for the Indigenous group, who cannot now use US courts to

collect the award. We have had the breaking news that the elections in

India will start on the 7th of April. The rest of Asia doing

particularly well. Using tensions between Russia and Ukraine having an

impact on US and Asian markets. That is it from me. Bye-bye.

In other news: A teacher has been suspended from a school in West

Somerset over claims that she stuck tape over the mouths of every pupil

in her class after she had told them they were too noisy. An

investigation is now under way following the alleged