05/06/2013 World Business Report

Those are the latest headlines from BBC World News. Now for the latest

financial news with Sally and World Chrysler defies the US government

and refuses to recall older Jeep Japan's prime minister called to

the third Garrow. Four on his latest attempt to revive the

Japanese economy. -- calls it the third arrow.

Welcome. Also, art China and the EU on the brink of a trade war over

solar panels? We will have the latest. First, Chrysler is defying

the US government and refusing to put in place a recall, requested by

US road safety authorities. The US National Highway Safety

Administration is asking Chrysler to recall older models of its Jeep

brand, specifically the Grand Cherokee from 1993-2004 and the

Jeep Liberty from 2002-2007. It says the fuel tanks are not

sufficiently protected because they are behind the rear axle. Chrysler

insists they are safe. Industry analyst Michelle Krebs gave us her

reaction to Chrysler's defiant stand. It was shocking because ever

since the Toyota recall a few years ago, they have been very quick to

do recalls at the slightest moment. To have Chrysler say they are not

doing it is highly unusual. Chrysler is convinced they are

right and that the Government is wrong. We will see how that plays

out. I think they are taking a riskier because, even though they

may ultimately win this, there could be some public relations

damage as a result. An opinion there on their reaction to that

news by Chrysler. US authorities could force Chrysler

to recall the cars, by taking the company to court. But if lawyers

get involved the battle could drag The Japanese Prime Minister calls

it his third arrow. Shinzo Abe is announcing the third phase today of

efforts to revive the Japanese economy from decades of feeble

growth. The first two arose involved a massive increase in

government spending and pushing the central bank to boost the supply of

money. -- arrows. Rupert Wingfield Hayes is our Tokyo Correspondent.

Tell us more about what he has been saying. It looks like what we have

got today is not the whole third arrow but just a little bit. We

will have to wait until next week to see the whole thing. But what we

have heard from Shinzo Abe today is a very public commitment to

significantly increase in growth in the Japanese economy. He says his

government will create 3% economic growth in the Japanese economy for

the next ten years. That would be a 30% increase in income is over the

next ten years. How exactly he will achieve that, that remains to be

seen. The details are not really there yet. One of the things he did

talk about today, interesting and has called people's attention, is

the creation of new special economic zones, particularly in

Tokyo. Essentially, turning Tokyo into a special economic zone that

can compete with looser regulation, lower taxes, compete with places

like London, Hong Kong and Singapore. How convinced our

business leaders and economists about this in Japan? Because there

is a fierce debate ongoing about the effectiveness of so-called

"Abenomics". There is a lot of scepticism in Japan that his

policies will work and that he is really committed to this. We have

seen the first two. A big increase in public spending, a big increase

in the printing of money by the Bank of Japan. That will double the

money's -- money supply. The third is considered difficult but the

most important. Japan needs to open up its domestic economy to greater

competition, to reform regulation and lower taxes if the economic

recovery is to be sustainable over the long-term. There is a great

deal of scepticism that Shinzo Abe, who represents the Liberal

Democratic Party, the old ruling party, close to business interests,

that he will really pushed through with these very difficult,

challenging and unpopular reforms that are needed here. Perhaps he is

more interested in tinkering round the edges. What we have seen today,

people will be encouraged but they will want to see more. thank you.

That story that is having the invocations in Japan. -- beat

implications. In other news, US authorities have banned the import

of older models of Apple's iPhone. It's the result of a patent dispute

with Samsung. A US trade body ruled that Apple had infringed a patent

owned by the Korean company. The ban can be overturned by the White

House. It was a slow start to the year for

the Australian economy. It grew 0.6% in the first three months of

2013, which was less than economists were expecting. The

strong Australian dollar has been hurting the nation's manufacturing

sector. The central bank there has slashed interest rates over the

past year. Economists think they could be more on the way.

Venezuela's government is introducing rationing in the

nation's most populous state, Zulia. From next week there will be

restrictions on the sale of 20 basic items, including rice, flour

and sugar. The government says the limits have been introduced to

tackle smuggling, but critics say the food supply has been disrupted

by government policy. Could Europe and China be heading

into a trade war over solar panels? On Tuesday, European Union

competition authorities slapped levies on Chinese solar panels.

From this week there will be a tariff of just under 12%. That will

increase to 47% in August and -- unless the two Max Sykes can reach

an agreement. The EU says the Chinese firms are selling solar

panels at less than they cost to reduce. And in response, China has

launched an investigation into European wine. Ray Noble is from

the Solar Trade Association which represents the solar industry here

in the UK. Do you believe these tariffs are necessary? Definitely

not. Why?Basically, all that has happened is that Chinese industry

has started manufacturing in a bigger scale. Huge volumes. In

doing so, they have driven down the cost. The European industry is

still in megawatts scale, significantly smaller, and their

cost base is higher. What do you think would have been the answer?

Why are tariffs helping European companies? The European companies

do not exist any more. They had lots of subsidies over the past 20

years to build businesses. But they took the profit rather than

invested into the industry. What the Chinese have done is they have

had subsidies from Chinese government or whatever but they

have invested in large scale and this was always the holy grail of

solar panels. You believe the European solar companies just got

their strategy wrong and therefore they failed because of their own

poor decision-making? Exactly. I was in BP solar industry and we

were number one in the world. We knew what it would take to move it

into the future. It was huge investment and it decided it was

not interested. Other companies have done the same. The Chinese

have not. As a sole trader industry body trying to help the UK

suppliers, what do you say? -- Solar. 80% of the products

installed in the UK comes from China. Without it, the industry

virtually dies in the UK. In terms of the future for European

companies, what do they need? Do they need to enlarge their business

on a much bigger scale to compete effectively with the Chinese?

is correct. Unfortunately, they have missed the boat. They have had

enough opportunities over the past 15-20 years and have not done it.

They sold the equipment to Chinese companies, who set up five years

ago, and they knew the Chinese were buying huge volumes of equipment to

make solar panels. And so this was inevitable. Very interesting. Thank

you. That is also in today's papers. We

will discuss that in a moment. Looking at the markets, an

interesting day. They are ebbing and flowing at the moment,

depending on the outlook for the economies. On Friday, we are going

to be getting a significant record about the jobs market in the US.

After that, there will be speculation as to what the central

bank in the US will do in response. The markets in Asia to a degree are

focused on what central banks are doing to stimulate their economies.