13/09/2011 World Business Report


13/09/2011

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says he is ready to support Egypt's transition to democracy.

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Those are the latest headlines. Now for the latest financial news.

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Hello and welcome to World Business Report. These are the headlines:

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Looking east for help. Italy turns to China, as the eurozone debt

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crisis put French banks under pressure.

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Cutting 1.2 trillion dollars from the US debt, the first item on the

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agenda for America's super committee.

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Hello. Italy is turning to China's largest sovereign wealth fund.

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Meetings have taken place between the China Investment Corporation

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and Italian officials, according to the Financial Times. As well as

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buying bonds, they have also covered talks on strategic

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investments in Italian companies. There are fears that the eurozone

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crisis is spreading to Italy. Michael, China is reported to be in

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discussions with Italy, but because it also purchasing Spanish and

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European assets. Why is it doing that?

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Are the first thing to mention his there has been no confirmation from

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China yet about those reports in newspapers about Italy approaching

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China perhaps to buy Italian bonds. Why would it do this? Quite simply,

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China has a lot of money, more than three trillion dollars worth of

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foreign reserves, which it has built up over the last few years

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because of its trade surpluses. It has money to spend, and it is

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looking to invest it. Most of that money is invested in the US

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denominated vehicles, like US Treasury bonds. But it does have

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money invested in Europe, in Europe bombs. Of course, Italy, which

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needs to raise money would perhaps go to China, which has money to

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spend, and suggest they spend money in Italy. This news is not perhaps

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altogether surprising. China has bought assets in Greece,

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it is reportedly looking to buy more assets in Italy. Is the

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Italian government right to be worried about the colonisation of

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Europe by China? I think it is perhaps a more

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immediate worry, the need to raise money. In the past, this issue has

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been raised, particularly in America, because so much of China's

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foreign reserves have been invested in America. People there have

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raised the idea that China is essentially America's banker, and

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what does that mean for negotiating trade deals? It could affect their

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relationship in all kinds of ways. That could also happen in this

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particular instance, but at the moment, Italy seems to be in need

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and China has money. You also have to remember that it is perhaps in

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China's interests to keep the eurozone stable. China does

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hundreds of billions of dollars worth of trade with Europe every

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year. If there is a crisis in the eurozone, a fall down in demand in

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the economy, then people would buy as many Chinese goods and that will

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affect the Chinese economy. So it is not simply a truism on the part

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of the Chinese government if this news turns out to be true.

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Thank you. Those reports about it of returning

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to China helped supermarkets on Monday after dramatic falls in

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Europe after France's three biggest banks bore the brunt of the latest

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debt crisis sell-off. There are reports all three may suffer a

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credit score at downgrade by Moody's later this week. Analysts

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say the real cause of default is speculation that Germany may decide

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it is better to let Greece default rather than attempt a second bail

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out. The German economics minister spooked the markets earlier this

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week by talking about an orderly bankruptcy of Greece. That is

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something that Germany's finance minister said he could not rule out.

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TRANSLATION: I think, basically, you cannot exclude anything. I have

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already said this would be a bad government if it did not prepare

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for things which you can't imagine. The financial markets are showing

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an exaggerated nervous reaction. The real economic situation is not

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as bad. I am joined now by the editor of

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Investment weekly. Let's talk about those French banks. The investors

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seem to have lost confidence because of their exposure to debt.

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Are we likely to see one of them go bust? I suspect we probably will.

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They have been rumours all through the summer that the three main

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banks have talked about struggling a considerably. We are coming up to

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the third anniversary of the collapse of Lehman Brothers, and

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people are saying that we should let other big institutions fail,

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too. So I would not be surprised if one of the French banks does go. It

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will be very painful if it does. It might be taken over by one of the

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bigger banks. We could talk about a lot more. We will talk to lay debt

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in the newspaper review. Thank you.

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The clock is ticking for a new group of lawmakers in Washington,

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DC who have a tough task. A committee has been created made up

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of Republicans and Democrats, who will meet this Tuesday, to try to

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have read a deal that will cut the federal deficit. They have just ten

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weeks to do it. It is called the Super committee,

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and its 12 members face a daunting task - they need to cut the US

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deficit by more than one trillion dollars over the next ten years.

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With the jobless rate stuck above 9%, Americans are impatient. They

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want to make sure that budget cuts don't get in the way of job

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creation. The 12 members of the so- called super committee, six

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Democrats and six Republicans, are charged with making sweeping cuts

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to the US federal budget by late November. That is a tall order.

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Many are worried that these cuts will imperil the already fragile US

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economic recovery. Others say that the proposed cuts will not be

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enough to get the economy back on track. This man is one of the most

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high-profile economic advisers in the US. He is sceptical about US

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efforts to resolve its debt crisis. A right way to create jobs and rain

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in the deficit would be higher taxation, especially on companies

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who are walking away tax-free through international tax agents,

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as well as higher taxation on the rich. It would give revenues to the

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government so it could invest in crucial areas. Some experts believe

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the committee members will succeed because their mandate is within

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their reach. Are they? The lawmakers should be doing more.

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trillion dollars is a lot of money. But over ten years, it does not

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come close to solving our fiscal problem, or two to -- stabilising

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our debt. Trying to cut the deficit while creating jobs is proving to

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be one of President Obama's biggest challenges.

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World leading carmakers will show off their latest models at the

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Frankfurt Motor Show this week. It comes after a year of strong car

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sales would have helped revive the motor industry. But the growth of

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car sales in China seems to be slowing. Economic weakness and

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record debt levels in Europe and the US are also causing concerns.

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The chief executive of forward Europe joins us now. Your company

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did get through the crisis without going bankrupt, and you are now

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looking to China and Russia, particularly a joint venture in

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Russia. How difficult is it to work with the Russians? We have signed

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the manner Matt -- memorandum of understanding with the largest car

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manufacturer in brush it with a view to completing that and

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starting the joint venture in the next few weeks. We found the

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discussions both with the Russian government and with the company to

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be very fruitful, and joint ventures always have some issues to

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resolve, but I think it was very professionally approached and I am

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very comfortable with the Russian company. Let's briefly look at the

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new car that is coming out. Apparently it will act as your

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personal assistant as well as driving you anywhere where you want

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to go? It is not a car that we will launch. We have been quite precise

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on that. But a number of key design features will be used in the future.

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There is a lot of technology in the car, some of it to the report in

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the near term, some of that deliver ball in the longer term. It engages

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and interacts with the driver. look forward to tested it. Thank

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:09:53.:10:06.

you. The now for some it more news from

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the UK: David Walliams has raised nearly �1.2 billion for Sport

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Relief after completing his 140 mile swim along the River Thames.

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He battled a stomach upset, rescued a dog, and avoided being attacked

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by Swans. Thousands turned out to cheer him on for the final stretch,

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which he said was one of the most gruelling.

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He is famous as a comedian and accomplished actor, charity

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fundraiser, and something of a socialite. But David Walliams's 140

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mile, eight days from along the Thames, has propelled him into the

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world of the superhero. The extraordinary feat started here the

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river's source and ended in Westminster. Along the way,

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cheering crowds helped him as he battled freezing, muddy workers,

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strong tides and dangerous undercurrents. He even rescued a

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drowning dog along the way. It is very hard to move your body through

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the water when you feel like you are going to throw up. He has

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previously swum the Channel and the Straits of Gibraltar for charity.

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For this challenge, he also had to battle all of the sewage that was

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washed into the Thames after the weekend's heavy rains. I don't know

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if I will get into the water again. The bathers the only water I want

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to see for quite a while! The money raised will kick-start the 2012

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Sport Relief campaign, and also undoubtedly raise its profile, as

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it continues its tradition of raising millions to help improve

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people's lives in the UK and the most deprived parts of the world.

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Well done David Walliams. Coming up at 6am, Breakfast. The

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team will be at the opening of the biggest urban shopping mall

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anywhere in Europe, as West Field Stratford City opens for business.

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You are watching BBC World News. The headlines: The head of Libya's

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transitional government has told thousands of supporters that the

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country will avoid extremist ideology and promote moderate Islam.

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He was delivering his first public speech since arriving in Tripoli.

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Chris's power workers' union says it will sabotage government plans

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to impose a new emergency property tax designed to save the country

:12:38.:12:43.

from bankruptcy. Kenya's Prime Minister has appealed

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for calm after a fuel pipeline exploded, killing at least 120

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people. The Turkish Prime Minister says he

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is ready to support Egypt's transition to democracy. He is in

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Cairo, on the first stock of his tour of North Africa. He has said

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he wants to place himself as a man who can help reshape the Middle

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East, and this is very new. In the past, Turkey and Egypt were not

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particularly close, and in the recent past, Turkey had no

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influence at all in the Middle East. But the welcome the Turkish Prime

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Minister got yesterday tells you how much his profile has risen.

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