20/03/2014 World Business Report


20/03/2014

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

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financial news with Sally Bundock and World Business Report.

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Europe desperately seeks a credible response to Russia, without a cost

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to member states. Could Toyota's massive pay`out for

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hiding information in a recall case be a glimpse into General Motors

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future? Welcome to World Business Report.

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I'm Sally Bundock. Also in the programme ` big spending by China's

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Tencent has hit its profits. I'll be joined by Rico shortly who'll have

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the details. European Union leaders will arrive for their spring summit

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in a few hours and their agenda has been changed to discuss the crisis

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in Ukraine. For more than 20 years Russia was welcomed into the

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international community. European companies, particularly German

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manufacturers, rushed to export to Russia. The City of London opened

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its doors to Russian funds. Now Europe's leaders will discuss how to

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stiffen sanctions against Russia after the annexation of Crimea. On

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Monday the US ordered the freezing of assets and travel bans on 11

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individuals, while the EU imposed such sanctions on 21 people. But

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this action was largely dismissed by President Putin. Now the EU's

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potential sanctions list is thought to include more than 100 people

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including rich Russian businessmen with significant interests in the EU

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and US. Meanwhile the United States and the UK have also warned of

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expelling Russia from the G8. Alexei Zakharov, Assistant professor at

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Stare University, at the Higher School of Economics is in Moscow.

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Good morning. Thank you for being on the programme. Give us your take on

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how all this is being digester where you are in Moscow amongst your

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peers? The sanctions are very small. It is just restrictions against a

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few officials. I do not think they will have any effect. And if it is

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widened to 100 plus officials? You see, Crimea... The official stand is

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that Crimea is part of Russian territorial. When sanctions are

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imposed, you are requiring a country to shed a part of its territory.

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This is what you intend to accomplish and if so sanctions must

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be very tough indeed because... This Crimea event was very popular in the

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country. Opinion polls showed people welcomed Crimea becoming part of

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Russia and I believe that Vladimir Putin is extremely resolved to not

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let... To not reverse this... Not to let Crimea revert to Ukraine. I

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think there is much determination to resist any kind of sanctions. If the

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situation escalates, and Vladimir Putin is resolute, what are your

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fears in terms of the impact on the Russian economy if sanctions broaden

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beyond individuals? The impact can be hard but you must know that, in

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given the level of propaganda power that the Russian government and

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Putin has, these economic downturn will be firmly blamed on the

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international community. I do not know how much Putin's popularity

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would suffer if the sanctions that are imposed are so hard that they

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result in significant reduction of Russian GDP. Thank you very much.

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Really interesting to get your ear. `` perspective. That is a story we

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are following closely and will keep you up`to`date. Markets around the

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world are reacting to the latest move by the US Federal Reserve. As

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most predicted it will reduce by a further ten billion dollars a month

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its massive stimulus to the world's largest economy. But new chair,

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Janet Yellen, also gave some guidance as to when interest rates

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will start to go up in the US. Rico Hizon is in our Asia business hub

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with the latest market reaction. Nice to see you. Tell us about the

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market reaction and a little bit more about what she had to say? In

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Asia, they are quite disappointed by those statements by Janet Yellen.

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They were caught off guard. This is not good news. The central banks are

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to assess. Countries will have to raise borrowing costs and it does

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not help sentiment that China's economic growth is slowing down as

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well. If you take a look at the numbers from Tokyo to Hong Kong,

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Sydney and soul, it is not just stocks. Tel is about the Chinese

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e`commerce, Tencent? We are seeing its share price is a volatile. Some

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of the losses are now in positive territory. Investors are still

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trying to digestive venues. Despite recording a jump in revenue of

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nearly $10 million, it had a low profit growth. Tencent moving into

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financial services, impacted by the banking sector are also worrying

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investors. This could hurt profitability. The Japanese carmaker

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Toyota finally reached a $1.2 billion settlement with US

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regulators on Wednesday. The four year criminal investigation came

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after Toyota recalled more than ten million vehicles over issues with

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brakes, accelerator pedals and floor mats. But as this chapter on safety

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reporting closes for Toyota, so it opens for General Motors. GM has now

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recalled one point six million cars but the US justice department has

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launched an investigation into launched an investigation into

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whether the company reported the recall in a fair and legal way.

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As someone who spent 90 minutes in her car every day, Samantha needs

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her car to get her where she is going safely. But problems with the

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ignition has the manufacturer calling that safety into question.

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That is the car I had been looking for. I was very happy. So excited.

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This is my first new car and now, IM upset and disappointed and angry

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that I wasn't let down. GM is recalling more than 4 million cars

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and has recently admitted it knew of the faulty it `ish and switches as

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early as 2004. `` ignition switches. They are excepting responsibility.

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We have apologised but that is just one step in the process. GM has been

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struggling to shed its image and since then has been able to

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regain... How it responds now will be a big test for the new GM. That

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is World Business Report. We will review the press in a moment. The

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budget featuring. Many thanks. Ministers are defending

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the pension reform, saying they will give people greater control of their

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finances. The changes will allow people to cash in part or all of

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their pension policies instead of being forced to buy a new

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