02/01/2012 World Business Report

Korea but has cautioned that any provocation would be dealt with.

Welcome to World Business Report. The headlines: China's factories

rebounded in December but will this be another year of slow growth?

Will 2012 break the euro or make it stronger? 2012 has started up with

some encouraging economic news from China. Manufacturing activity rose

in December, defying expectations of a decline. The index of

Purchasing Managers shows an expansion of business in December

after a decline in November, which had added to fears that China's

economy was slowing down. Those concerns were exacerbated when a

private survey showed that industrial activity was declining.

Now, how important is the state had? -- is this information? Quite

important. This is an indication that there is still major demand

for China's clothing, electronics and other merchandise produced by

the country's factories. One factor is that these products were high in

demand during the Christmas product -- during the Christmas period. But

beyond this month, analysts are not certain if this improvement in

factory output can be sustained in the coming months. They say that

despite his bounce back in December, China is continuing to be affected

by external events like the eurozone crisis and the weak

expansion of the US economy. However, if global economic

problems continue to persist, the Chinese government has guaranteed

steady growth in 2012 and will release was pro-growth policies

such as an interest rate reduction. Things are still looking good for

the Chinese economy despite 2011's slow down. What are the prospects

for 2012? Many economists are still

predicting China's economic growth will still be faster than any other

Asian economy, however, that growth will be at its lowest level for

over ten years. No-one is expecting any kind of difficult landing. From

the likes of the Asian Development Bank and global investment banks,

the forecast for the Chinese economy will expand between 7.9%

and 8.5% in 2012. There is one thing that you can say

about 2011 - it was better than 2010. That is how one financial

analysts summarised the situation in the eurozone. 2011 was the year

in which European leaders stopped the eurozone crisis from spreading

further and undermining the entire European project.

Europe is coming together amid the crisis. The path to were overcoming

this remains a long and difficult but -- to overcoming this remains a

long and difficult but at the end, Europe will remain stronger.

Some in London's financial district are anticipating some kind of a

disintegration of the euro. The party is over for the eurozone.

All the signs at his amusement park are that some defaults might lie

ahead - ordinary or otherwise. Like the single currency, this place

represents a grand and a unified vision of Europe. But no amount of

treaty change and fiscal discipline can alter the fact that some

countries cannot afford their repayments. 2012 is the year when

we should anticipate some countries to leave the euro. According to

City of London commentators, this is a continuing horror story.

Greece is disappearing as an economy far too quickly for it to

be saved and it can only be saved outside of the euro. Will others

have to leave as well? It seems unlikely that Portugal will survive.

And can they keep Spain and Italy? I am almost at the end of a visit

to an amusement park at a time when, like me, the euro is on the edge of

a precipice. It is safe to say that it will be a bumpy ride of.

I am not a profit but it is safe to say that as soon as one country

leaves the eurozone, it will be a threat to the EU. The entire

European project is in danger. Everyone is keeping a close watch

on Italy, the next weakest link. If it cannot be saved from default,

Europe's entire banking system will be in uncharted waters.

Now, his 2012 the make or break here for the eurozone? Certainly

this is the year for difficult decisions. If 2012 is remembered

for anything, it will be that no decision was made. -- If 2011 is to

be remembered. Is it that the core members of the

eurozone are there but the smaller members will have to operate under

a different umbrella? Yes and it will not be an easy transition but

it can be done. A country like Greece would benefit from having a

devalued currency and would then be able to compete with its neighbours.

The is governments have adopted or austerity measures, which on the

one hand, are dealing with the issue of spending, but are not

helping growth. Are you saying that having their own local currency

would help? Precisely. We would end up with the Northern euro, which

would be similar to the Deutschmark. That would be starve. Then there

are the other currencies defaulting to this the weaker kind of euro.

Like Euro light, almost. Then they would be allowed to start regrowing

their economies over time. Thank you.

Exxon Mobil has suffered a blow, forced to pay a hefty compensation

bill to the state of Venezuela. Nigerians are facing a steep rise

in the price of petrol after the government put a stop to petrol

subsidies. The government says that it will save $7 billion per year.

Trade unions want the decision reserved and are calling for

strikes. The latest mission impossible movie

has been named the top film in America for the second year in --