16/12/2015 World Business Report

Global markets are braced for the most pivotal moment

to raise interest rates for the first time in nearly a decade.

China will make its case for more control at the World

Internet Forum, home to the largest number of internet users and some of

Prada shares are sliding in Hong Kong as the company sees

Our team in the region will have the details.

Have we arrived at the day the US Federal Reserve will begin to

If so, it would be the first time in nearly ten years.

In fact, it's such a long time since the US central bank has been

in "tightening" mode that some stockbrokers have had to provide

special training to younger staff members on how to react.

Since December of 2008 the main cost of borrowing

in the world's biggest economy, has been held at a historic low of

America's car industry is back. Rock bottom interest rates breathed life

back into it. Dealerships like this in New Jersey once again buzzing.

The economy is coming back, stabilising. The fear factor is not

there. Consequently, they are hitting dealerships and getting what

they want. Enjoying life. With the US economy purring back to life,

rather than roaring, the central bank is poised to raise rates from

near zero. I will make it work. We are always trying to find a good

deal. But will hire rates, which strengthens the US dollar, stamp out

America's export revival? This man makes leather notebooks and wallets.

In Canada we've lost $125,000 in revenue this year. Simply because

department stores we sell to cannot afford the product at those costs.

Those inside here believe the economy is strong enough to survive

a rate hike. Good news and not just in America. The US consumer is the

Atlas to the rest of the world. It doesn't have the grace of credit it

did but the world is looking for it to export their goods to the US and

have asked by a lot of goods, which will happen in 2016 -- buy. The Fed

has kept rates near zero for seven years. A measure of how bad the

crisis was and how long the recovery has taken. But now here we are, the

widely expected interest rate rise won't necessarily be followed by any

more in the near future but it is a validation of America's return to

some kind of prosperity. With me is Justin Urquhart Stewart,

Director Seven Investment Management -- With me is Justin Urquhart

Stewart, Director of Seven Your thoughts. We were led up the

garden path by Janet Yellen and the Fed. This time everything has been

fed towards us. What will happen, this is good news. It shows the US

economy has recovered rather well. It is a key moment. You are coming

off the stimulus that was put in years ago after the financial

crisis. We are strong enough it would seem to go through it. Jobs

are good. Companies are much stronger. Deflation isn't there.

That is a concern. What about the impact elsewhere? What fireworks

will this cause? It will show we are in a state of further recovery. We

are onto the next stage. In the eurozone, well they have a lot more

QE to go. They have a weak currency as well against the dollar

especially. Things are looking positive for them. That shouldn't

have much impact. The UK does not mean interest rates will go up.

Interest rates are far more directly impacted. We have short term

mortgages and much more interest related rates. Whereas in the United

States people have 30 year mortgages. Briefly, concern for

emerging markets. Are you concerned about India, Rozelle? That has been

to do with the dollar which has gone up in price already and the weak

emerging market currencies have already occurred and it is already

fair -- Brazil. I think it is a positive sign. Thank you. -- already

there. Justin Welby back with us to talk more on the papers in a couple

minutes. -- Justin will be back. China has the world's largest number

of internet users and is home to some of

the world's biggest internet firms, but it's also home to the Great

Firewall, which hides away many Now China will make its case for

more control at the World Internet The three day summit

in the eastern city of Wuzhen will focus on major development

strategies, with foreign tech firms eager to get a slice of the massive

but tightly managed market. John Sudworth is at the

World Internet Conference for us. President Xi Jinping did the opening

speech, as it were. What did he say? Well, Sally, as you can see, Wuzhen

is a picturesque place. This is a conference with a laudable slogan,

and interconnected world governed by all. It is the word governance that

was central to she jinking's speech. He mentioned control and security

over and over again -- Xi Jinping. The concern I think four observers

is that China is using it to try to build an alternative view of the

Internet. The message is clear, as you say, 650 million users, it feels

Internet. The message is clear, as you say, 650 million users, it its

time has come. It wants to push cyber sovereignty, that individual

nations should decide what controls and what censorship they want to put

in place. And essentially, if and other nations want to join in and

profit from that, they have to abide by those rules. How is that message

being received? As we know, many Western companies have had a tough

time in China. Yes, well, it is interesting. There are

representatives of foreign tech firms here. We have tried to speak

to some. Unsurprisingly, perhaps, they are slightly bashful. There has

been a lot of focus on this conference, the campaign group

borders without borders -- Reporters Without Borders has told those to

boycott it. It gives the conference legitimacy. In some ways it becomes

compliant with Chinese efforts to censor the Internet. Those companies

are perhaps keeping a low profile. But the list of foreign heads of

government, senior political leaders who are here is a little telling.

The countries limited to just five, Russia, Pakistani, Kazakhstan,

Kurdistan and Katich is done, none of whom would be at the top of any

list of Internet freedom. Weak sales in Asia have sent

profits at the Italian luxury This is something we've talked a lot

about, the fact that luxury goods companies are struggling in your

part of the world. Indeed. Profits were down sharply almost 40% of the

quarter. That is sending Prada shares down to their record low

levels as much as 6%, down 40% from the IPO price in Hong Kong. As you

have mentioned this is because of the slowing growth in China that we

talk about and not just affecting Prada but other luxury brands. The

crackdown on corruption is also taking its toll. It has also been

affected by the strength of the Hong Kong dollar, which of course is

pegged to the US dollar. Hong Kong has always been the destination for

the mainland shoppers. The strong dollar has meant it has become

rather expensive and they are choosing to go elsewhere. That has

definitely been affecting them. Thank you. Let's quickly look at the

financial markets in Asia as we run up to that decision. That is with

regard to the Fed. A bounce back for Asian markets getting ready for the

announcement later in Washington. That is all from me for now. I will

see you soon. Doctors and nurses are being urged

to treat dying patients as individuals rather than making

"snap decisions" about their care.