08/10/2012 World Business Report

with food and equipment. Those are the latest headlines. Now

it is time for the latest financial This is World Business Report. Here

are the headlines: A US congressional committee says that

two of China's biggest technology firms should be banned from the

American market. A more trouble from the proposed

A United States congressional committee has called for a two

Chinese telecommunications giants to be banned from the American

market. A draft report from the House Intelligence Committee said

the companies cannot be trusted to be free of Chinese state influence.

They pose a security threat to the US and its systems. Give us more

detail on what is in this report. What they are saying is that the

companies can't be trusted to be free of influence by the Chinese

government. The companies could be used for malicious purposes by

Beijing. They say that in a time of crisis or a war of, if malicious

software is implanted in Chinese Beijing to sub down national

security systems. -- shut down. A stark warning. They say they have

evidence of this. They have spoken to industry experts and people who

have worked for the companies. Their views about the potential

threat are not unique. This report is not a surprise. There has

already been one response released. Will this report actually lead to

anything? It is a report, not a proper then. The shares and one of

the companies have fallen. They say they are not directly controlled by

the Chinese government. The other company has said the investigation

is not objective and is a distraction. In terms of what

happens next, you're right, this is just a report. But his

congressional committee is asking businesses to not to deals with

these companies. It is hard to see why any business would be prepared

to do that. This is not the first time that this kind of report has

come out. Just two years ago a huge deal between these companies and

another telecommunications giant fell apart. That is because one of

them was leant on by the Commerce Department. The Defence Department

say they were concerned by China's emerging cyber capabilities. Seen

in the context of how the rest of Washington is the wing the threat

from China, this report is significant.

Concerns are growing about the proposed merger of catch mac

defence firms to create the world's biggest aerospace company.

Britain's the best secretary warned that the French and German

governments would have to reduce their stakes in the front. The

Financial Times is referring one of the largest shareholders will

signal it has significant concerns about the deal. They have until

Wednesday to decide whether to go on with the merger talks. We knew

this would be fraught with difficulty. But this is interesting.

Commercially, the deal makes sense. This will be able to take on

bowling as the largest defence operator in the world. -- bowling.

220,000 employees. An absolute juggernaut. But it is fraught with

pot holes. Germany and France are major stakeholders. So is Spain.

There are obviously concerns from the United States. Germany insisted

that the head office should be in Germany. When you water this down,

it looks like France and Germany will have somewhere between 9-10 %.

That is too much. The French and German governments have to reduce

their stakes or offer their stop to the public. The chances of that

happening in a short space of time are remote. You can understand the

political arguments. But for the stakeholder, they do not have the

amounts to stop it going forward. The Chief Executive Investment

Officer is a sharp cookie. They have got about 40%. He is concerned

that Mike Turner, the chief executive, has been too concerned

about deal-making. Not enough dividend policy. Not good enough.

Thank you. We will see you soon. We will look at today's newspapers.

But first, some more business stories.

Finance ministers from the Rose Byrne are meeting in Luxembourg.

They will launch Europe's new bailout fund. It will have 500

billion euros at its disposal to bailout struggling eurozone nations.

At last, this bail-out fund has arrived. We have been talking about

it for a very long time. Why is it there? What is it allowed to do?

There are various rules and regulations. It is a temporary

bail-out fund that does not have enough to do what we have coming on

the horizon. There is a second permanent one. That is the one that

is coming into operation today. So much of the first bail-out fund has

already been spent on Greece and Ireland. We are looking at We are looking at

banking bail-out for Spain. We have got a bail-out for Cyprus coming up.

We will see whether Spain will be looking for a sovereign bailout.

Many art origin wind here is not enough money. -- many arguing.

Especially if Spain is in a difficult position. How will it

work going forward? A very realistic concern. Right now, both

of these funds can cope with what ever Spain will throw at it. But

Italy is very different. It has got the third largest debt market in

the world. Its ratio is already 120 %. That is a problem. The way the

stability mechanism works is that it will have a 2 billion euros of

capital. But that will not be in place for a three-year period. It

would not be ready to cope with Italy. Many people are also worried

about France. We have got to leave it there. Thank you for filling us

in. Some of the stories that are of concern. A disruption at the plant

that makes the new iPhone. 4,000 workers went on strike. The company

is saying that production continues as usual. Last year, a brawl

involving 2000 workers broke out. The Abu Dhabi based airline Etihad

continues its rapid growth. Sales hit $1.3 billion.

The new Liam Neeson moved the top to the box-office in the UK. It

took a double the original movie. Showing you the market's very