:00:02. > :00:12.latest headlines from BBC World News. Now for the latest financial
:00:12. > :00:21.
:00:22. > :00:27.Greece gets its next chuck of much needed bail-out funds but with tough
:00:27. > :00:32.strings attached. Food prices jump in China but there
:00:32. > :00:42.are fresh signs of weakness at its factories. We assess what this means
:00:42. > :00:42.
:00:42. > :00:47.for the world's second largest Welcome to World Business Report.
:00:47. > :00:50.I'm Sally Bundock. Also in the programme: As trade talks continue
:00:50. > :00:56.in Washington, we focus on the benefits to patients on both sides
:00:56. > :00:59.of the Atlantic hoping for life saving treatments.
:00:59. > :01:02.It's proving to be a summer of discontent for Greece. Eurozone
:01:02. > :01:07.finance ministers agreed to lend more money to its beleaguered
:01:08. > :01:10.government but warned the country's economic outlook remains uncertain.
:01:10. > :01:17.Its international lenders also said Greece's reform programme is moving
:01:17. > :01:21.too slowly. So the next tranche of much needed bail-out funds comes
:01:21. > :01:29.with strings attached. Greece needs to show its making further progress
:01:29. > :01:31.with its reforms especially the privatisation of state assets. Plus,
:01:31. > :01:35.the government must see through its commitment to reduce the public
:01:35. > :01:42.sector pay roll. Around 25,000 civil servants will be put on reduced
:01:42. > :01:52.salaries before being deployed or dismissed. Not surprisingly, this is
:01:52. > :01:53.
:01:53. > :01:56.the issue that is proving to be the most controversial. Thousands of
:01:56. > :01:59.Greek municipal workers and teachers were taking to the streets of Athens
:01:59. > :02:09.on Monday in angry protest. With me here in the studio is
:02:09. > :02:13.
:02:13. > :02:18.Christian Schultz, Senior Economist at Berenberg Bank. Is this a sign of
:02:18. > :02:23.mistrust? The Europeans want to see delivery performs first and then the
:02:23. > :02:26.money coming after that. Of course they also don't want to risk risk
:02:26. > :02:29.going bankrupt because of liquidity issues, so the money is carefully
:02:29. > :02:36.spread over the next few months, so that important payment deadlines are
:02:36. > :02:41.met. But they have to meet certain milestones. It is a management tool,
:02:41. > :02:47.just as in projects anywhere in the world. The money comes upon delivery
:02:47. > :02:50.of certain milestones. How is the Greek government faring? Recently it
:02:50. > :02:57.had a deep crisis following the decision to close down state
:02:57. > :03:01.broadcaster. And the coalition government has changed. Indeed.
:03:01. > :03:04.They've had a political crisis, reflecting how tough some of these
:03:04. > :03:07.decisions are. Some people within that governments can't take
:03:07. > :03:12.responsibility for them and don't want them. We have seen that in the
:03:12. > :03:16.past as well. Greece has gone through five years of extremely
:03:16. > :03:23.tough decisions and we still have that ruled conferences to do
:03:23. > :03:26.everything necessary to stay in the euro. -- that broad consensus. I
:03:26. > :03:29.think it has pretty much achieved all it can and now it is about
:03:29. > :03:33.safeguarding the achieved, rather than pushing through a lot of new
:03:33. > :03:38.reforms. What about the privatisation programme? This seems
:03:38. > :03:41.to be direct with problems. Indeed. Selling off some of the state
:03:41. > :03:48.companies is very difficult. Some companies in Northern Europe or
:03:48. > :03:51.Germany, some of the countries that want to buy the companies, find the
:03:51. > :03:54.powers of the unions are so strong that you can't reform them or make
:03:54. > :03:59.them profitable. That obviously lowers the price of these assets,
:03:59. > :04:02.which in turn means the government doesn't get the revenue it needs to
:04:03. > :04:10.cover some of the gaps. Did think they'll keep the mark when it comes
:04:10. > :04:14.to the reforms? -- do you think. think they will. It will require
:04:14. > :04:22.some flexibility and not everything will be met. The Greeks will have to
:04:22. > :04:27.make more efforts. But also, the troika, the Germans, the ECB, will
:04:27. > :04:33.have to show some flexibility. But in general the confidences, that
:04:33. > :04:38.grand bargain that supported the eurozone, is still there. The
:04:38. > :04:40.periphery is reforming and the call of the eurozone is supporting.
:04:41. > :04:43.hope you are right. Thanks for your thoughts on the situation in Greece.
:04:44. > :04:46.As we've been telling you, trade negotiators are locked away in a
:04:46. > :04:52.room in Washington pouring over the details of a huge trans-Atlantic
:04:52. > :04:55.trade deal between the US and EU. To give you a sense of the scale of
:04:55. > :04:59.these talks, we are focusing on just one area that needs to be grappled
:04:59. > :05:05.with - medicine. Currently, a drug approved for use in America could
:05:05. > :05:09.take two years or more before it's approved in Europe, and vice-versa.
:05:09. > :05:13.That's bad for patients waiting for life-saving cures. So, one of the
:05:13. > :05:16.aims of these talks is to make it easier for medicines licensed on one
:05:16. > :05:21.side of the Atlantic to get the go-ahead on the other. Jeremy Howell
:05:21. > :05:27.reports. This doctor is one of the leading
:05:27. > :05:30.drug developers at this Institute of drug research the forced nowadays he
:05:30. > :05:34.says almost all big projects are done jointly with US and European
:05:34. > :05:40.scientists. But he says the American government and European Union still
:05:40. > :05:43.have completely different licensing systems. So, a drug approved for use
:05:43. > :05:49.in one territory must go to an other series of before being approved in
:05:49. > :05:54.the other. Patients needing the new drugs must meanwhile wait.
:05:54. > :05:57.Particularly with the drug discovery, there are laboratory
:05:58. > :06:03.programmes working across both sides, in the US and the UK.
:06:03. > :06:07.Clinical trials are also transatlantic. We have patience
:06:07. > :06:10.going to trials across the Atlantique in hospitals.
:06:10. > :06:17.Unfortunately, when it comes to registering a drug, we have to go to
:06:17. > :06:20.multiple agencies. Drug licensing is done in the US by the drug and food
:06:20. > :06:26.administration and in the EU by the European medicines agency. It's a
:06:26. > :06:30.costly process and small biotech companies, which come up with many
:06:30. > :06:33.of the new medicines, can't afford to apply to both bodies at once.
:06:33. > :06:37.They have discarded their applications. That's not only
:06:37. > :06:40.frustrating for patients waiting for a cure, it also loses the drug
:06:40. > :06:45.development company is a lot of revenue. Why can't the authorities
:06:45. > :06:50.on both sides of the Atlantique work in parallel to approve drugs? That's
:06:50. > :06:53.the issue they are discussing at the free trade talks this week. They'll
:06:53. > :06:58.be discussing the need for collaboration, particularly the need
:06:58. > :07:03.for a joint approach for the fast track of these important new
:07:04. > :07:10.medicines. This has already happened before but only for a few selective
:07:10. > :07:17.medicines like anti- HIV and cancer drugs. This weeks talks are unlikely
:07:17. > :07:21.to prevent -- reduce a transatlantic licence but if they start working
:07:21. > :07:26.together more medicines could be concurrently in the US and European
:07:26. > :07:31.markets. And the European team will be pointing out that this type of
:07:31. > :07:33.cross-border collaboration is the first step they took to moulding
:07:34. > :07:40.their 20 plus National drugs agencies into one single EU white
:07:40. > :07:45.body. Prices are gathering pace in China.
:07:45. > :07:49.In particular, the price of food. Consumer price inflation rose to
:07:49. > :07:56.2.7% in June from May's 2.1%. Rico Hizon is our Asia Business hub in
:07:56. > :08:01.Singapore. He can make sense of this. Lovely to see you. Should we
:08:01. > :08:07.be concerned about this movement in prices? Not at this point. According
:08:07. > :08:14.to economists. Although food prices remained the main driving force of
:08:14. > :08:20.inflation and have increased by almost 5%. The upward trend is still
:08:20. > :08:25.well below the governments inflation target for 2013, at 3.5%. But when
:08:25. > :08:29.you talk to analysts, they say this basically reduces the likelihood of
:08:29. > :08:33.interest rate cuts this year from the central bank and they will
:08:33. > :08:37.likely keep policy largely neutral in the near term, to keep inflation
:08:37. > :08:47.in check and also these possible property bubble. On the flipside, we
:08:47. > :08:47.
:08:47. > :08:51.have producer prices falling by 0.6%. One -- this is due to weak
:08:51. > :08:58.demand, excess production capacity in many industries and lower costs
:08:58. > :09:01.for raw materials and components. Basically, we will see prices
:09:01. > :09:06.remaining where they are at. Economists say recent art shows
:09:06. > :09:11.growth could dip below 7% due to government efforts and weak demand
:09:11. > :09:15.for Chinese exports. Thank you very much.
:09:16. > :09:19.In other news, an architectural landmark is to change hands. China's
:09:19. > :09:23.Ping An Insurance Group has agreed to buy the Lloyds building in London
:09:23. > :09:26.for $388 million. The building, which is home to the world's leading
:09:26. > :09:30.insurance market, was owned by German asset management fund Commerz
:09:30. > :09:33.Real. Chinese firms have been looking to
:09:33. > :09:40.buy assets in key markets in their quest to expand their presence
:09:40. > :09:45.globally. In the US, the earnings season kicks
:09:45. > :09:47.off with results from Alcoa. The US' largest aluminium producer reported
:09:47. > :09:51.second-quarter earnings of $76 millions, excluding the impact of
:09:51. > :10:00.restructuring costs and costs tied to a racketeering and fraud probe.
:10:00. > :10:05.-- million. But revenue disappointed somewhat.
:10:05. > :10:11.Let's have a look at the markets in Asia. They have rebounded today.