Browse content similar to 07/03/2014. Check below for episodes and series from the same categories and more!
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resort of the justice system in China. Appealing directly to the | :00:00. | :00:00. | |
leaders. The latest headlines. And all the financial news with the | :00:00. | :00:22. | |
World Business Report. A tiny solar equipment company in China looks set | :00:23. | :00:26. | |
to default on its bond repayments. It is being seen as a landmark for | :00:27. | :00:31. | |
market discipline for the world 's second-largest economy. Out of the | :00:32. | :00:35. | |
darkness power is restored in South Africa as the energy emergency ends. | :00:36. | :00:39. | |
But will the lights stay on? We talk to the experts. A very warm welcome | :00:40. | :00:48. | |
to you. This is World Business Report. In just a minute we will | :00:49. | :00:54. | |
have more on how Internet entrepreneurs in New York upbringing | :00:55. | :01:00. | |
Newsweek back into print. But first this hour of tiny loss-making solar | :01:01. | :01:04. | |
equipment company in China looks set to default on its bond repayments. | :01:05. | :01:08. | |
If it happens this would be the country's first ever domestic bond | :01:09. | :01:18. | |
default. It could trigger a shakeup in China's corporate sector. Up | :01:19. | :01:21. | |
until now some kind of a lout has always emerged for firms in trouble. | :01:22. | :01:27. | |
The government has feared a string of defaults could spark unrest. A | :01:28. | :01:32. | |
default could benefit the economy in the long run by heralding the end of | :01:33. | :01:39. | |
an era of risk-free credit in China. Local governments have often used | :01:40. | :01:43. | |
public funds to rescue companies and prevent instability. Is this | :01:44. | :01:49. | |
China's moment of reckoning. We talk to our China correspondent in | :01:50. | :01:54. | |
Beijing. Linda, is this the beginning of a new chapter in | :01:55. | :01:56. | |
China's approach to how it manages its companies and banks? The small | :01:57. | :02:04. | |
solar company may well become a test case for how China is going to deal | :02:05. | :02:08. | |
with the expansion in the financial sector. Since about 1999 when the | :02:09. | :02:11. | |
Chinese government stopped regulating the corporate debt | :02:12. | :02:16. | |
market, it would be the first time that a public traded debt has not | :02:17. | :02:22. | |
been paid. It is not huge amount. Just about $15 million worth of | :02:23. | :02:27. | |
interest payments but the company has said on Tuesday that it would | :02:28. | :02:30. | |
not be able to make the payment today. The company has been not | :02:31. | :02:35. | |
traded for two years. In many ways it would not be a surprise if the | :02:36. | :02:38. | |
payment was not made. But if it was not made and there is no bailout, it | :02:39. | :02:42. | |
would be the first technical default on the corporate debt market in | :02:43. | :02:45. | |
China. One of the reasons why markets are watching it is because | :02:46. | :02:48. | |
the attitudes are actually quite sanguine. The debt market over the | :02:49. | :02:55. | |
past decade has increased to an impressive amount. But without the | :02:56. | :02:59. | |
ability to let some companies go through the normal process of | :03:00. | :03:03. | |
default in bankruptcy, a lot of observers were worried the Chinese | :03:04. | :03:05. | |
government couldn't possibly stand behind a market of that size. For | :03:06. | :03:10. | |
this market to expand, they need to feel as if there is a process of | :03:11. | :03:13. | |
creative destruction in terms of companies. This company stand apart | :03:14. | :03:18. | |
for instance from the other bailouts that the Chinese governor has done. | :03:19. | :03:23. | |
For instance the shadow banks or trust institutions. There is a | :03:24. | :03:26. | |
bailout in January because the government does not want that sector | :03:27. | :03:30. | |
to be dragged into something which could trigger a much more systematic | :03:31. | :03:37. | |
problem. The unregulated lending. In many ways this company could | :03:38. | :03:42. | |
actually be a good test case because it is corporate, publicly traded | :03:43. | :03:45. | |
company. The government knows this is a company which is really in | :03:46. | :03:49. | |
trouble and hasn't said anything in the intervening days about what it | :03:50. | :03:53. | |
will do about the default. If it were to go ahead, markets may | :03:54. | :03:56. | |
actually view this as a positive development for China in the non- | :03:57. | :04:02. | |
ranking capital market. One thing to be aware of is that once you start | :04:03. | :04:05. | |
to hear the word default in association with China's financial | :04:06. | :04:09. | |
system with the government. Should they decide to intervene, it will be | :04:10. | :04:13. | |
because they don't want that were to become known across China. In other | :04:14. | :04:20. | |
words, savers in China have deposit insurance. If there is a possibility | :04:21. | :04:26. | |
the government will have to ensure savings and deposits that would be | :04:27. | :04:30. | |
the kind of loss of confidence the government would be keen to avoid. | :04:31. | :04:34. | |
It will be a close case to watch. Usually the company has until the | :04:35. | :04:38. | |
end of the business day to make a payment. It certainly is something | :04:39. | :04:41. | |
that will be watched I am sure not just in China but globally. It will | :04:42. | :04:46. | |
be fascinating to see how this plays out both within China and across the | :04:47. | :04:56. | |
world. All the BBC's economic editor has been in China to find out how | :04:57. | :05:00. | |
the economic powerhouse has been able to grow at such a fast pace. | :05:01. | :05:03. | |
And whether it is sustainable. You can catch that programme, how China | :05:04. | :05:15. | |
fooled the world, this weekend. Let's move to South Africa's power | :05:16. | :05:20. | |
emergency. It has just been lifted according to the state energy | :05:21. | :05:25. | |
company. The firm which provides 95% of the nation 's electricity. They | :05:26. | :05:29. | |
had imposed rolling blackouts during the day. They had earlier blamed | :05:30. | :05:38. | |
heavy rains for making the coal too wet to burn. Industrial customers | :05:39. | :05:42. | |
had been asked to cut energy usage by at least 10%. Big firms switched | :05:43. | :05:47. | |
to generators but many smaller enterprises had no backup at all. | :05:48. | :05:50. | |
After seven days of rain, could more blackouts be on the way? Let's cross | :05:51. | :05:57. | |
live now and talk to Adrian Murray who is following this for us from | :05:58. | :06:05. | |
Johannesburg. Good to talk to you. Are we install for more blackouts? | :06:06. | :06:10. | |
It has been lifted, the emergency, at 10pm last night. It is said that | :06:11. | :06:15. | |
the power situation is now stable but constrained. It does not seem | :06:16. | :06:18. | |
that there will be any more shedding today. But a spokesman has been | :06:19. | :06:27. | |
appearing on TV to reassure the public. It is not clear is how this | :06:28. | :06:32. | |
will play out in the coming days. Bad weather was blamed. We have had | :06:33. | :06:41. | |
several days of heavy rains and they blamed the weather for making coal | :06:42. | :06:44. | |
stocks wet. It is forecast to continue raining into next week so | :06:45. | :06:48. | |
it is not entirely clear how this will play out. It has exposed how | :06:49. | :06:53. | |
fragile the system is. We have had a number of emergency declarations | :06:54. | :06:56. | |
over the past year marks. So far these have only been asking big | :06:57. | :07:04. | |
industry to curb their consumption. They had to ask ordinary people to | :07:05. | :07:10. | |
curb bears as well this time and issue these rolling blackouts which | :07:11. | :07:22. | |
affected urban areas as well. -- curb theirs. There were rolling | :07:23. | :07:29. | |
blackouts yesterday and power cuts perfecting a widespread part of the | :07:30. | :07:34. | |
country even Johannesburg. Driving across the city traffic lights were | :07:35. | :07:39. | |
not working. Lots of businesses will have backup generators but some of | :07:40. | :07:41. | |
the smaller ones didn't. People don't expect this to happen in what | :07:42. | :07:45. | |
is really Africa's economic powerhouse. That was a shock to | :07:46. | :07:50. | |
people. There has been a lot of anger and a backlash on social | :07:51. | :07:54. | |
media. People have been complaining about being taken back to the Dark | :07:55. | :07:58. | |
Ages. They ask why the state power company couldn't cope with bad | :07:59. | :08:03. | |
weather. It was particularly damaging as there is only two months | :08:04. | :08:08. | |
before the national elections and there have been lots of reference | :08:09. | :08:11. | |
back to 2008 when South Africa was in a big power crisis. Households | :08:12. | :08:16. | |
were dumped into darkness and businesses were affected, costing | :08:17. | :08:19. | |
the economy billions of dollars at that time. How has this happened | :08:20. | :08:27. | |
again? Thank you for that. Let's move to Asia now. To Japan and's | :08:28. | :08:32. | |
struggle with the virtual currency Bitcoin. Their government has now | :08:33. | :08:38. | |
announced that it considers Bitcoin not a currency at that some | :08:39. | :08:42. | |
transactions should be taxed. Our correspondent is in Singapore and | :08:43. | :08:48. | |
has more news. Is it a currency, is it not a currency? The perpetual | :08:49. | :08:54. | |
question goes on. Does indeed. It is something the Japanese government is | :08:55. | :08:57. | |
having to grapple with. What has happened today is the chief Cabinet | :08:58. | :09:06. | |
Secretary says that if there are gains in the transactions it is only | :09:07. | :09:09. | |
natural to consider how to impose taxes. They have said that banks | :09:10. | :09:15. | |
cannot provide Bitcoin as a product to customers. They have said in a | :09:16. | :09:20. | |
statement that they are still trying to gather information on the virtual | :09:21. | :09:25. | |
currency. They want to determine the total value of the coins in | :09:26. | :09:31. | |
circulation. Some estimates are around $7 billion. It is a virtual | :09:32. | :09:36. | |
currency which can be created online through public hated computer | :09:37. | :09:40. | |
algorithms but that debate on whether they are real currencies | :09:41. | :09:46. | |
continues. Several countries have had them. I will be talking about | :09:47. | :09:52. | |
Bitcoin in just a moment. Stay with us. A little bit more news for you | :09:53. | :10:08. | |
here from London. A highly resistant superbug which has caused 16 deaths | :10:09. | :10:13. | |
in the north-west of England since 2010 is being investigated by health | :10:14. | :10:17. | |
authorities. It causes | :10:18. | :10:18. |