:00:00. > :00:00.headlines from BBC World News. Now for the latest financial news with
:00:00. > :00:18.Sally Bundock and World Business Report.
:00:19. > :00:23.41% and rising: Italy looks for a way out of its youth unemployment
:00:24. > :00:28.crisis Plus, the most expensive real estate in the world. But is Hong
:00:29. > :00:38.Kong's property market a bubble about to burst? Welcome to World
:00:39. > :00:42.Business Report I'm Sally Bundock. Also in the programme, a new record
:00:43. > :00:48.close on Wall Street, I'll bring you all the details in just a moment. We
:00:49. > :00:54.start in Italy, where this man is offering himself as the solution to
:00:55. > :00:57.the country's economic woes. He is Matteo Renzi, the 39 year old mayor
:00:58. > :01:00.of Florence who was recently elected leader of Italy's Democratic Party,
:01:01. > :01:07.and has his eye on the Prime Minister's job. Later today he'll
:01:08. > :01:09.outline plans to reform Italy's labour market, make the country more
:01:10. > :01:15.competitive and tackle soaring levels of youth unemployment. To
:01:16. > :01:22.give you some context, in November Italy's total jobless rate hit a 37
:01:23. > :01:26.year high of 12.7%. But in the same month the jobless rate among 15 to
:01:27. > :01:36.24 year olds hit an all time record of 41.6%. A job for life culture
:01:37. > :01:38.among trade unions and a web of red tape make hiring and firing
:01:39. > :01:43.notoriously difficult and expensive in Italy. Many young people have
:01:44. > :01:48.simply given up trying to break into the jobs market and left the country
:01:49. > :01:54.to find work. Mr Renzi is promising a radical change in his Jobs Act to
:01:55. > :02:06.be outlined today. Let's talk to Rome correspondent Alan Johnston
:02:07. > :02:16.full . Just reminders of the role he plays in Italian politics. Whether
:02:17. > :02:21.see fit? Sally, right now he is the most dynamic figure on the Italian
:02:22. > :02:25.political stage. The Mayor of Florence in just 39 years old. He
:02:26. > :02:34.brings the promise of youth and freshness. He is often likened to
:02:35. > :02:37.Tony Blair in his early days. Matteo Renzi has captured the leadership of
:02:38. > :02:45.the biggest and most influential party in the country, the central
:02:46. > :02:49.left Democratic party. He will try and arrange Italy out of its
:02:50. > :02:57.economic stagnation. Nothing will be easy or straightforward for him. His
:02:58. > :03:02.party has already in government. It dominates the coalition. Although
:03:03. > :03:06.Matteo Renzi leads the party, he doesn't need the government. He is
:03:07. > :03:12.not the Prime Minister. That belongs to another Democratic party man. As
:03:13. > :03:17.he tries to drive through his agenda, he will have to work through
:03:18. > :03:22.the Prime Minister and through the coalition administration which she
:03:23. > :03:29.doesn't actually control. Tell us more about what he is proposing and
:03:30. > :03:33.whether people believe it will work. Italy is just beginning to emerge
:03:34. > :03:39.from its longest recession since World War II. It still feels like a
:03:40. > :03:45.country in an economic crisis. Youth unemployment is beyond 40%. Creating
:03:46. > :03:51.jobs and stimulative growth is the priority. This afternoon we will see
:03:52. > :03:56.him put out the core of his party 's agenda. He will make the Italian
:03:57. > :04:02.labour market more flexible and dynamic and accessible. A new style
:04:03. > :04:06.of contract which young people find more easy to get work. They won't
:04:07. > :04:11.have all the protection they would want, but they will be phased in
:04:12. > :04:18.over time. Crucially, Matteo Renzi would want to drive down the cost to
:04:19. > :04:24.employ people. Reducing the tax is at satiated with taking on employees
:04:25. > :04:30.in Italy. He will reduce the red tape and regulations and labour
:04:31. > :04:34.codes surrounding work. He will trade drive down the cost of energy
:04:35. > :04:51.which is such a burden to Italian firms. Thank you very much. A very
:04:52. > :04:54.interesting day ahead. China's holdings of US Government debt hit a
:04:55. > :04:57.new record high in November according to official US figures due
:04:58. > :04:59.to be released later. They show Chinese holdings of Treasuries
:05:00. > :05:02.jumped by 12 billion dollars to a record 1.3 trillion dollars
:05:03. > :05:06.according to Bloomberg, which got an early sight of the figures when they
:05:07. > :05:08.were posted in error on an official website. China's vast foreign
:05:09. > :05:11.exchange reserves hit a new record of 3.8 trillion dollars at the end
:05:12. > :05:17.of last year according to its own figures. Microsoft's board is
:05:18. > :05:20.considering Ericsson CEO Hans Vestberg as a potential successor to
:05:21. > :05:26.departing leader Steve Ballmer, according to sources quoted by
:05:27. > :05:29.Bloomberg. Former Nokia boss Stephen Elop is also thought to be on the
:05:30. > :05:32.short list. Microsoft's lead independent director John Thompson,
:05:33. > :05:36.who is heading the search, wrote in a December blog post that the board
:05:37. > :05:43.plans to decide by the early part of 2014. Bank of America says profits
:05:44. > :05:47.surged to more than 3.4 billion dollars in the fourth quarter.
:05:48. > :05:50.That's four times what it made in the same period a year ago, when bad
:05:51. > :05:55.mortgage debt was still weighing on its earnings. The results were much
:05:56. > :05:57.better than Wall Street was expecting, and Bank of America's
:05:58. > :06:01.shares hit their highest in more than three and a half years. They
:06:02. > :06:17.are up some 250% from their post-crisis lows. This week, we have
:06:18. > :06:22.been looking at global property hotspots. The next stop is Hong Kong
:06:23. > :06:26.where prices have skyrocketed since 2009 as Asia was spared the worst of
:06:27. > :06:32.the global financial crisis. Chinese buyers have been pouring in. But is
:06:33. > :06:34.Hong Kong in danger of another property collapse? Our chief
:06:35. > :06:39.business correspondent Linda Yueh reports from Hong Kong.
:06:40. > :06:45.The most expensive properties in the world are found here in Hong Kong. A
:06:46. > :06:51.house sold for 70,000 US dollars per square foot. The street down the
:06:52. > :06:58.road is the most expensive property in all of Hong Kong. Overall prices
:06:59. > :07:01.hit a new high. The capital gains tax and Chinese money mean that Hong
:07:02. > :07:06.Kong is an attractive place to invest. To deter speculation,
:07:07. > :07:15.foreigners now have to pay tax equal to a quarter of that purchase price.
:07:16. > :07:18.The transaction costs have become so high that it has made Hong Kong a
:07:19. > :07:26.less attractive place to speculate and invest. They are now trimming
:07:27. > :07:34.its cash injections which give higher global interest rates and
:07:35. > :07:38.mortgage costs. It is hard not to wonder if there is a bubble. House
:07:39. > :07:42.prices are estimated to be overvalued by 30 to 40%. One of the
:07:43. > :07:48.most overvalued markets in the world. When the last bubble burst
:07:49. > :07:54.during the Asian financial crisis, house prices fell by 60% and
:07:55. > :07:59.continued to decline for six years. The trouble with bubbling markets is
:08:00. > :08:04.that once interest rates rise, so does the risk of collapse. Property
:08:05. > :08:12.developers say that it is different this time. In 1987, the interest
:08:13. > :08:26.rate was above 10%. Now it is only 3%. -- 1997. House prices are 13
:08:27. > :08:34.times the average salary. Even higher than during the last bubble.
:08:35. > :08:41.I work in a hotel, and I need to spend about 50 to 60% of my whole
:08:42. > :08:52.salary to pay for the mortgage. Even if they spend nothing, I have to
:08:53. > :08:57.save for two years for the deposit. Adding further pressure, public
:08:58. > :09:03.housing is inadequate. It covers only 30% of the population. This
:09:04. > :09:10.lady and her family live in a 400 square feet flat. The size of a
:09:11. > :09:15.studio. TRANSLATION: The rent is really high. It is our biggest
:09:16. > :09:20.expenditure. It takes half of our monthly income, and we don't earn
:09:21. > :09:25.much. She still one of the lucky ones. Illegal flats on rooftops have
:09:26. > :09:32.sprung up to cope with the unaffordable and inadequate housing.
:09:33. > :09:45.This is the dark side of being a property hotline.
:09:46. > :09:52.The biggest in Australia today is the unemployment figure went up
:09:53. > :09:57.surprisingly high. A real expectation that the central bank in
:09:58. > :10:03.Australia is poised to cut interest rates to stimulate growth. You can
:10:04. > :10:12.see the market is up. Japan having a good session up 2.5%. Another strong
:10:13. > :10:20.close in the US. This trend all three year low against the US
:10:21. > :10:29.dollar. Just to say, the earnings we have mentioned that the bank of
:10:30. > :10:30.America. Goldman Sachs released earnings today. We are keeping an
:10:31. > :10:47.eye on that as well. The number of cases of gout being
:10:48. > :10:48.recorded in the UK