:00:02. > :00:04.has won the presidential election in the first round, but the main
:00:04. > :00:07.opposition party has challenged the result. Those are the latest
:00:07. > :00:15.headlines from BBC World News. Now for the latest financial news with
:00:15. > :00:25.World Business Report. Hello and welcome to World Business
:00:25. > :00:27.Report. The headlines: Italy's leadership crisis, how will the
:00:27. > :00:33.markets react following news that Prime Minister Monti is making an
:00:33. > :00:38.early departure? Mixed signs from the Chinese economy, factory
:00:38. > :00:48.activity expands in November but overseas trade slows down. The Cat
:00:48. > :00:58.and crew of Cathay Pacific Airlines will vote in a couple of hours
:00:58. > :01:10.
:01:10. > :01:13.whether to go on strike over pay. - - the cabin crew. The markets will
:01:13. > :01:15.get their first chance to react to news over the weekend that Italian
:01:15. > :01:19.Prime Minister Mario Monti will resign much sooner than expected.
:01:19. > :01:21.Mr Monti said he will step down as soon as parliament approves next
:01:21. > :01:23.year's budget. That could mean elections as early as February,
:01:23. > :01:26.rather than April when the government's mandate runs out.
:01:26. > :01:29.Former Prime Minister Silvio Berlusconi says he will run for
:01:29. > :01:31.office again. Analysts say that might not be in Italy's best
:01:31. > :01:34.interests. Silvio Berlusconi is not going to win, but he can position
:01:34. > :01:42.the new government. He could get around 20%. That will give him a
:01:42. > :01:45.strong hand in deciding what to do. It is not good news for Italy. It
:01:45. > :01:52.means that all the austerity measures that Mario Monti has put
:01:52. > :02:01.through could be for nothing. It means we are possibly heading
:02:01. > :02:06.towards the great style instability. -- Greek style. Christian Schulz is
:02:06. > :02:11.the Senior Economist at Berenberg Bank. Silvio Berlusconi is someone
:02:11. > :02:14.you cannot understand. Markets have been very critical of him.
:02:14. > :02:24.Everybody thought it would be possible that people would vote for
:02:24. > :02:30.
:02:30. > :02:40.him again, but the Italian steadfast that is the -- the at --
:02:40. > :02:41.
:02:41. > :02:46.Italians did. That is something the markets have to factor in now. One
:02:47. > :02:51.thing interesting about this, there is not such a high-risk situation
:02:51. > :02:58.that Italy is in any more. The ECB could buy all these bonds to
:02:58. > :03:05.support the country. The real low risk situation is that Italy has
:03:05. > :03:09.gone through much of the austerity already this year under Mario Monti.
:03:09. > :03:14.The next government does not have to do more austerity. They just
:03:14. > :03:21.have to stick with what he has done. Whatever government is going to
:03:21. > :03:27.come in, it is unlikely it will be powerful, the likelihood they will
:03:27. > :03:31.do nothing and stick with what Mario Monti did is very high. Very
:03:31. > :03:36.different from Greece and Spain were a lot more has to be done. You
:03:36. > :03:41.need a strong government to do that. Italy does not need that. Maybe
:03:41. > :03:47.Berlusconi coming in is not such a big risk. It is not clear as to
:03:47. > :03:54.whether he will get in. There is a lot of dissension within the ranks,
:03:54. > :04:04.even from his own party. The centre right do not one to be associated
:04:04. > :04:05.
:04:05. > :04:10.with dollars scanner's policies. -- want to be associated with Silvio
:04:10. > :04:17.Berlusconi's policies. For the centre-left, it might be good. On
:04:17. > :04:21.the other hand, you might have a populist election campaign. It
:04:21. > :04:26.looks most likely that the centre- left will win. They will have to do
:04:26. > :04:33.a little bit of backtracking on Mario Monti's reforms, but not
:04:33. > :04:41.enough to rattle the situation. This is a decision by Mario Monti
:04:41. > :04:47.that we could live without. We have cut the German elections next year.
:04:47. > :04:54.We do not know how Spain is going to fare. -- got the. Markets are
:04:54. > :05:04.doing much better. The ECB safety net has improved the mood Eilat.
:05:04. > :05:08.
:05:08. > :05:18.This does not do anything to improve things. -- a lot. This is
:05:18. > :05:22.
:05:22. > :05:29.not a good development. Thank you for your perspective. We start the
:05:29. > :05:31.week with a bundle of important economic data from China. The
:05:31. > :05:34.nation's factories were busier in November with output expanding at
:05:34. > :05:37.an annual rate of more than 10%. Retailers also saw an expansion of
:05:37. > :05:47.activity. But figures on trade were less encouraging. Export growth
:05:47. > :05:49.
:05:49. > :05:51.slowed to 2.9% from a year earlier and import growth fell to zero.
:05:51. > :05:59.Cabin crew at Hong Kong based Cathay Pacific are voting on
:05:59. > :06:05.whether to strike. Rico Hizon is in the BBC's Singapore office.
:06:05. > :06:12.This is a crucial vote. It is over pay. Whether they will accept
:06:12. > :06:18.Cathay Pacific's offer of a 2% wage increase. If they vote against the
:06:18. > :06:23.offer the cabin crew could strike during the Christmas travel season.
:06:23. > :06:30.The union, representing more than 5,800 flight attendants, will vote
:06:30. > :06:37.in a couple of hours' time. That is 3pm Hong Kong time. They want a 5%
:06:38. > :06:42.salary increase. If this industrial action materialises, it will upset
:06:42. > :06:52.holiday plans over Christmas and New Year. The pay row comes amid
:06:52. > :07:00.moves by Cathay Pacific to cut costs. The Hong Kong carrier
:07:00. > :07:04.reported a first-half loss last month. They have cut entertainment
:07:04. > :07:14.spending to a bare minimum. Align management says the pale an
:07:14. > :07:14.
:07:14. > :07:24.increase of the two cabin crew is fair, reasonable and competitive. -
:07:24. > :07:25.
:07:25. > :07:31.- airline. -- pay increase. Thank you. Other business stories
:07:31. > :07:34.around today. President Barack Obama held talks at the White House
:07:34. > :07:40.with Republican Speaker of the House, John Boehner, on Sunday. The
:07:40. > :07:42.two were discussing the so-called fiscal cliff issue. That's the
:07:42. > :07:45.automatic spending cuts and tax increases that will start next year
:07:45. > :07:49.unless politicians can agree on alternative spending measures.
:07:49. > :07:54.White House officials did not give any detail about Sunday's meeting.
:07:55. > :07:57.US insurance giant AIG is selling its aircraft leasing business. A
:07:57. > :08:03.group of Chinese investors is paying $4.2 billion for an 80%
:08:03. > :08:06.stake in ILFC with the option to buy another 10%. With more than 900
:08:06. > :08:12.aircraft, ILFC is one of the world's biggest owners of passenger
:08:12. > :08:15.jets. Skyfall returned to the top of the North American box office
:08:15. > :08:22.over the weekend. The latest James Bond movie starring Daniel Craig
:08:22. > :08:24.took another $11 million. Since its release five weeks ago Skyfall has
:08:24. > :08:34.taken almost $1 billion worldwide, making it the biggest-grossing Bond
:08:34. > :08:36.
:08:36. > :08:43.movie. That is the key moment in the film if you have not seen it
:08:43. > :08:50.yet. This is a look at the market. Asia is a bit mixed at the moment.
:08:50. > :09:00.Slight gains, not particularly strong. We mentioned the news about
:09:00. > :09:03.
:09:03. > :09:07.China, we could not talk with an expert. Export growth has slowed
:09:07. > :09:14.quite a bit. The market's not getting too wobbly about this. The
:09:14. > :09:18.general consensus is that economy has stabilised. A lot of data
:09:18. > :09:22.coming three indicates that. Having said that, it is not completely
:09:22. > :09:29.clear how next year will go for China. Europe is such an important
:09:29. > :09:34.trading partner for China. That is not good news for a time at all. I