14/03/2016 World Business Report


14/03/2016

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The Alternative for Germany party, the AfD, has won seats

:00:00.:00:00.

Those are the latest headlines from BBC World News.

:00:00.:00:00.

Now for the latest financial news with Sally

:00:00.:00:00.

Russia's energy minister is in Tehran to talk oil.

:00:07.:00:18.

But will he be able to persuade Iran to join a freeze on production,

:00:19.:00:24.

just months after crippling sanctions were lifted?

:00:25.:00:25.

America's top transport official backs Google,

:00:26.:00:27.

saying its self-driving car crash last month was not a surprise,

:00:28.:00:30.

Also in the programme: There is more gloomy news about the Chinese

:00:31.:00:48.

economy, and Moody's warns political risk has risen in Hong Kong.

:00:49.:00:51.

Russia's energy minister is due to begin talks

:00:52.:00:58.

in Iran over a potential deal to freeze oil production levels.

:00:59.:01:01.

Last month, a group of countries led by Russia and Saudi Arabia agreed to

:01:02.:01:04.

keep a ceiling on oil output, but only if other producers follow

:01:05.:01:07.

Initially oil prices slipped after the announcement,

:01:08.:01:12.

From record lows of $27 a barrel in mid-January,

:01:13.:01:18.

oil has been steadily climbing, and is now above the $40 a barrel mark.

:01:19.:01:22.

The International Energy Agency says prices have recovered remarkably in

:01:23.:01:24.

the past few weeks, and that lower production in the US is helping to

:01:25.:01:28.

But it is highly unlikely Iran will freeze its production right now.

:01:29.:01:36.

Its Opec envoy described a move as illogical, reportedly saying the

:01:37.:01:39.

country will increase output until it reaches pre-sanctions levels.

:01:40.:01:41.

With me is Richard Mallinson, geopolitical analyst at

:01:42.:01:43.

Good morning, Richard. So how are these talks going today, do you

:01:44.:02:07.

think? Iran definitely wants OPEC to do something to support the price,

:02:08.:02:11.

like all oil producers it has been suffering from low prices at its

:02:12.:02:15.

focus is on bringing production back. It has just had sanctions

:02:16.:02:19.

lifted and the last thing it wants to do is committed to keeping

:02:20.:02:23.

production at what it sees as unreasonably low levels compared to

:02:24.:02:28.

Saudi Arabia and Iraq. And what is Iran producing, as far as we know?

:02:29.:02:32.

There is conflicting data out there, isn't a? There is, the last few

:02:33.:02:37.

months we have seen exports pick up to around 3 million barrels a day

:02:38.:02:41.

compared to around 2.8 million a few months ago but a lot of the numbers

:02:42.:02:45.

which are coming out are very unreliable. We don't know how much

:02:46.:02:48.

of the oil they are currently selling is coming out of tanks and

:02:49.:02:53.

how much is additional pumping from their fields. And just explain the

:02:54.:02:58.

shift in the oil price. Is it as simple as saying we have seen it

:02:59.:03:02.

steadily rise because of the Russia Saudi Arabia discussions in

:03:03.:03:07.

February? I think all the talks and headlines over the last few weeks

:03:08.:03:11.

have helped change the mood at what has really underlined the

:03:12.:03:15.

improvement in prices has been the fact that non- OPEC supplies are

:03:16.:03:19.

starting to fall because of lower investment, lower spending by oil

:03:20.:03:22.

companies, we are seeing the results show up and that is going to

:03:23.:03:29.

rebalance the market. So what is Energy Aspect saying about the price

:03:30.:03:34.

of oil? At the beginning of the year there was a real diversity between

:03:35.:03:39.

$6 a barrel and $60 a barrel. Your thoughts? There are so many views

:03:40.:03:44.

out there at the moment. I think given the rally we have seen we are

:03:45.:03:49.

back to about the right levels for the current market conditions and

:03:50.:03:51.

that probably sees us through for a few months but in the second half of

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the year I would expect that tightness to really start showing

:03:55.:03:58.

through and prices to rise further past $60 a barrel by the end of the

:03:59.:04:03.

year. Thank you for giving us your take on that. We will keep a close

:04:04.:04:07.

eye on the talks going on in Tehran. Any news coming out of those

:04:08.:04:09.

we will update you. The US ratings agency Moody's has

:04:10.:04:11.

downgraded Hong Kong's outlook to negative, as the territory's

:04:12.:04:14.

political and economic links with Nice to see you. Just fill us in on

:04:15.:04:27.

this news that emerged over the weekend. That's right, Sally. Hong

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Kong officials are shaking their heads with disappointment by this

:04:34.:04:38.

downgrade by Moody's, and immediately today, they swiftly

:04:39.:04:45.

defended the territory's policy framework for the metals. A

:04:46.:04:49.

government spokesman described the assessment by Moody's as totally

:04:50.:04:53.

wrong and its view from the mainland in the city's policy formulation

:04:54.:04:58.

speculative and subjective. But if you take a look at the report by

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Moody's, the ratings service said the strong political link in bed at

:05:03.:05:06.

in the one country, two systems policy creates the risk that they

:05:07.:05:10.

will lose some of their independence as China's influence continues to

:05:11.:05:17.

grow. This it said would negatively affect policy effectiveness and

:05:18.:05:22.

credibility in Hong Kong and weak in its institutional strength relative

:05:23.:05:26.

to the mainland. When you speak to analysts they say that Hong Kong is

:05:27.:05:31.

very exposed to any deterioration in China, given that about 60% of the

:05:32.:05:35.

city's bank credit goes to mainland borrowers. With all this fact is now

:05:36.:05:39.

out, we will have to wait and see, Sally, if Rival rating houses SNP

:05:40.:05:45.

and Fitch will follow the weak lead of Moody's -- S

:05:46.:05:52.

In other news: China's industrial output has slowed to

:05:53.:05:55.

its weakest growth since the financial crisis, fuelling

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Production rose by 5.4% in January and February, the worst since 2008.

:05:57.:06:03.

The Bank of Japan has started its two-day policy meeting.

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In a surprise move in January, the central bank adopted negative

:06:06.:06:08.

interest rates for some deposits, in an attempt to encourage Japanese

:06:09.:06:11.

Later this week the Federal Reserve and the Bank

:06:12.:06:15.

The International Monetary Fund has suggested it supports

:06:16.:06:21.

the decisions of Japan and Europe to introduce negative

:06:22.:06:23.

IMF chief Christine Lagarde says unconventional monetary

:06:24.:06:26.

policies should continue if they are accompanied by structural

:06:27.:06:28.

Huge but peaceful protests have been taking place in cities across

:06:29.:06:40.

Brazil, to demand the resignation of President Dilma Rousseff.

:06:41.:06:42.

The opposition accuses her of mishandling the economy

:06:43.:06:44.

and involvement in a massive corruption scandal, which has also

:06:45.:06:46.

Last month Google revealed that one of its self-driving

:06:47.:06:59.

The incident highlighted just one of the fears people have

:07:00.:07:03.

about autonomous vehicles, the other being that cars without drivers

:07:04.:07:05.

Our North America technology reporter Dave Lee spoke to the US

:07:06.:07:10.

transport secretary about the impact self-driving

:07:11.:07:11.

I think there is no question that driverless technology presents a lot

:07:12.:07:33.

of potential for disruption on a number of fronts. And it is unclear

:07:34.:07:39.

to me now exactly how that future unfolds. What I do know is that we

:07:40.:07:45.

have the potential to reduce 80% of the crashes and accidents that

:07:46.:07:49.

occur. That is not to say that there won't be disruptions along the way.

:07:50.:07:55.

Recently the Google car crashed into a bus and it was the first time that

:07:56.:08:00.

Google accepted that it was the fault of the on-board computer, that

:08:01.:08:03.

it made the wrong call in pulling out on that bus. Is that a setback

:08:04.:08:10.

for the tech ology? Well, it is not a surprise that at some point there

:08:11.:08:16.

would be a crash. -- technology. Of any technology that is on the road.

:08:17.:08:20.

But I would challenge one to look at the number of crashes that occurred

:08:21.:08:24.

on the same day that were the result of human behaviour. I think the

:08:25.:08:28.

question here is and comparing the automated car against perfection, I

:08:29.:08:33.

think it is a relative comparison to what we have now on the roads, which

:08:34.:08:38.

is you and I and our eyeballs. Whenever we do a story about

:08:39.:08:42.

driverless or self driving cars everyone says but I love driving, I

:08:43.:08:46.

love to be out on the open road. How do you feel about that, personally?

:08:47.:08:51.

I think there will be an appetite for those of us who have grown up

:08:52.:08:55.

driving vehicles to continue to have fun doing that, but no, my kids

:08:56.:09:00.

don't know what a typewriter was. This generation of kids doesn't

:09:01.:09:05.

remember what it was like the role of a window in a car because all

:09:06.:09:09.

cars have automatic Windows today -- to roll up a window. Quite

:09:10.:09:17.

interesting cars have automatic Windows today --

:09:18.:09:17.

to roll up a window. Quite interesting to hear his take on the

:09:18.:09:21.

future for cars. Looking at market is very briefly, the week started on

:09:22.:09:24.

a bullish note following a strong close in Europe and the US on

:09:25.:09:28.

Friday. Lots of Central Banks meeting this week, the bank of

:09:29.:09:33.

Japan, the Federal reserve, the Bank of England, and there is a lot of

:09:34.:09:36.

momentum behind the thought about what central banks will do the best

:09:37.:09:41.

global economy. So it is all about getting back into markets this week,

:09:42.:09:46.

it would seem so far so good. Japan closes in around about 20 minutes'

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time. That is it from World Business Report. Stay with us, you are with

:09:52.:09:53.

BBC World News. The High Court is expected to decide

:09:54.:10:02.

today on a legal challenge from the Government, seeking to ban a one-day

:10:03.:10:05.

strike tomorrow by sixth-form Ministers say the dispute,

:10:06.:10:08.

which is about the funding of colleges, is political, rather

:10:09.:10:11.

than being a genuine trade dispute.

:10:12.:10:15.

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