26/09/2014 World Business Report

European anti`smoking rules. Those are the latest headlines from

BBC World News. Now for the latest financial news with World Business

Report. Peace talks in the gas war ` Europe tries to strike a deal to

keep Russian gas flowing this winter. Plus, the greenhouse effect

` how builders are rethinking housing design to cut carbon

emissions. Welcome to World Business Report.

I'm Ben Thompson. In a moment, China's phantom trade deals `

regulators uncover a multibillion`dollar fraud by

mainland companies. But first, can Europe avoid a gas

crisis this winter? A tense day of negotiations lie

ahead in Berlin today for the European Union, Ukraine and Russia,

as they try to resolve a row that has threatened to leave millions

without heating as colder weather approaches. Russia is Europe's

biggest energy supplier and half of the gas it supplies comes via

Ukraine. Russia halted gas supplies to Ukraine in June over what it said

was unpaid debt. Europe has been supplying the country through the

back door by rerouting gas that comes in via Slovakia. That's

angered Russia. The state`controlled gas company Gazprom said last

Wednesday that it was unable to meet rising gas demand from Europe while

it built up stockpiles ahead of winter. On Thursday, Ukraine's Prime

Minister called for a reform of the energy market so gas supplies can no

longer be used as a political weapon.

There is a huge challenge for Ukraine. Not only Ukraine but EU

member states. This challenge is energy dependence. We understand

that Russia is still one of the key suppliers of natural gas to Europe,

the EU and Ukraine. We understand as well that if we act in concert, if

we stayed united, and if we craft transparent and market`based rules,

no one, including Russia, will use natural gas as a weapon against our

economies and against our country. What good all of this mean? ``

could? Richard Tooby is a Russia analyst at Oxford Analytica. In such

a climate of political tension and military tension in the region, can

a deal be done? I think that it will be very

difficult, these negotiations. The military situation on the ground has

improved to some extent. The other day, Nato said they had seen

significant movement of Russian forces out of the Donbass region.

There is now a peace plan that has been implemented and violence has

reduced. There is still sporadic violence. There is a feeling from

both sides that there has to be a deal and even if we don't see one

today, I believe this will be the beginning of the process that makes

sure we do get to a deal. Is it fair to expect a deal, given the

sanctions being imposed on Russia? One might say it is within their

rights to refuse to sell gas. It is very much in Russia's interest to

co`operate on this. It is so important for them to maintain the

confidence of the European market. For all the talk about Russia

diversifying in China, this $400 billion gas deal with China this

year, Europe remains a very important market for them. And the

fragility of the Russian economy at the moment makes them feel like they

will have to make a deal. Time is short. Winter is coming and gas is

in demand. There is not much time to get this done. What timescale are we

looking at? In some Western European countries, the risk is less because

European countries have been pumping record amounts into gas storage.

Some countries will be able to cope for maybe six months if it is a

normal winter. The big problem will be for Ukraine itself. Gas is at 51%

of normal levels at the moment. That would be the issue. If it were to be

a really tough winter. Thank you. Now to the last in our week`long

series on climate change and its economic impact. In the UK and

throughout much of Europe, housing alone generates more than

one`quarter of all CO2 emissions, so builders and architects are

embracing new technology to make houses both greener and more

attractive to buyers. Nigel Cassidy reports from Chichester on the south

coast of England. These sustainable homes may not look

so different but the carefully selected systems and appliances

combine to minimise emissions. Over 800 will be built in and around the

solid redbrick buildings and abandoned hospital. The developers

worked with a social housing provider and the UK Homes and

Communities Agency. The carbon dioxide savings mean that every home

gets hot water fed from a landmark tower in the middle. Emissions have

been minimised around each home and have been offset around the

development. We try to make sure that the technology we use is of

direct benefit and is not some then which is surely giving us that zero

carbon emission credential while not being something the customer would

notice. This site was originally a hospital, so this is the original

water tower that supplied the water to the hospital. We have utilised it

as the chimneys for the energy Centre. This is the energy Centre.

This is the old idea of district heating brought up`to`date and this

is what all people will have in their homes. It runs on hot water.

You can control your central hearing `` central heating and hot water

from your barbs and taps. It has boilers. The hot water runs through

these pipes and pumps to this Jimmy tank. And there `` this will

eventually generate electricity that can be sent to the grid. Homeowners

get lower monthly bills. The house holds its heat extremely well so

there is not much concern to have the central heating on. And the hot

water supply is consistent at a safe temperature and at a good pressure

as well. Until now, it has been a regulation that has forced climate

saving measures. But ideologically friendly homes can be cost`effective

as well. `` ecologically friendly homes. On Thursday, financial

regulators in China revealed they have found more than $10 billion

worth of fake trade transactions, import and export deals that never

actually happened. They were used by Chinese companies to avoid capital

controls and sneak money in and out of China. Regulators say there has

been a crackdown to stamp out the practice but how widespread is it?

This all revolves around fake invoices. Yes. Partially. $10

billion double sound like much but this could be the tip of the

iceberg. `` does not sound like much. Companies use iron ore or

copper as collateral against bank loans that they then put into

unrelated sectors like property. This means that global figures may

be inflated. If that is so, that means actual demand for commodities

is much lower than thought. This is a serious problem in China, where

the currency regulator said 50 cases had been handed over to the police

for prosecution. This emerged after an investigation lasting longer than

one year. The investigation said that companies forged and a legally

documents for exports and imports across the country. `` illegally

used documents. This is a very worrying development. One we will be

watching. Thank you. And looking at the market numbers. This has

translated into a weak start for Asia. In the US, there was a

sell`off on Apple shares. See you soon. Thank you. Detectives

investigating the disappearance of 14`year`old Alice Gross have

cordoned off part of a park in West London, close to the canal towpath

where she was last seen. Scotland Yard say they will search the area

to decide whether it is relevant to their