11/04/2014 World Business Report


11/04/2014

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the latest headlines from BBC World News. Now for the latest financial

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news and World Business Report. The German Finance minister tells

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the BBC that not only does he want the UK to stay in the EU, but that

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this will make Europe stronger. Reforming the IMF, The International

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Monetary Fund face calls that it should break free from the US, its

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largest shareholder Welcome to World Business Report I'm Alice Baxter.

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In a minute we'll find out why the Stock exchanges in Hong Kong and

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Shanghai want to exchange customers. In a rare interview the German

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finance minister Wolfgang Schaeuble, seen here with Chancellor Angela

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Merkel, told the BBC's Tanya Beckett that not only does he want the UK to

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stay in the EU, but that this will make Europe stronger. He also said

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that the problems of so called 'benefit tourism' can be resolved in

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Europe, but insists that the principle of the free movement of

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labour within the EU needs to stay. We need the UK in the EU, of

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course. I cannot imagine the EU without the UK, and without the

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leading role in the UK because the UK is indispensable for Europe, and

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we had to respect the debate in the UK, and respect and accept any

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British decision is, of course, but we hope, we strongly hope, that the

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UK will decide to stay in the EU, and once again, we need the stronger

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role of the UK in the EU. In the UK, migrants from within the EU are

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no longer offered all of the welfare that people who are British and

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women in Britain are being offered. Is there a parallel debate in

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Germany? What do you think of these restrictions? We have to defend the

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freedom of movement for people to work in the EU. We need

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immigration. We can do it, if we make European law in the way that it

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is clear that you have freedom to work. You can't ask the social

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assistance in the member states that you choose. If you need social

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assistance, the responsibility is of your Homestead. And we will give you

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more from that interview with Wolfgang Schaeuble, including his

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views on the Eurozones's road to recovery, throughout the day here on

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World Business Report. Plans to reform the IMF have stalled because

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of a divided US Congress. There are signs the group of 20 leading

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economies are ready to leave US behind. They are set to discuss the

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issue this Friday on the sidelines of the IMF and World Bank spring

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meeting. Michelle Fleury reports from Washington. The head of the

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International monetary fund, here with her new friend, Joe Hockey,

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this years chairman of the due 20 leading economies, expressing the

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group 's frustration at IMF reforms agreed in 2010 are being blocked by

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the American Congress. Having to finalise this issue diminishes

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America's global standing rather than enhance it. As a close friend

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of the United States, we will always call it as we see it from Australia.

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In relation to the reforms of the IMF, this from the United States is

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letting everyone down. Some say the IMF should consider breaking free

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from the US, the largest shareholder. A suggestion that the

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head of the IMF greeted with caution at the start of the meeting. I do

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not think our institution should move to plan B until we have full

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certainty and massive disappointment that plan a is definitely dead. I am

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not prepared to declare that at this point. Insight here, this support

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reforms that would increase the voting power of emerging markets and

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boost the resources of the IMF. But, the Obama administration is has

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not done enough to persuade Republicans in the House of

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Representatives. They have the idea that if they make large loans, there

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is more of a risk to the United States taxpayer than before. Now,

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the IMF is lending on a scale that has never left before. The sense of

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shared responsibility that led America to create the IMF at the end

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of World War II is wearing away. Few politicians in Washington seem

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troubled by America's failure to live up to the promises. But it is

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not only the IMF is stands to lose. America wants support for some of

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its priorities, it may find it is not bad. `` the next time America

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wants support. China unveiled a plan Thursday to give foreign investors

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greater access to its stock market by allowing investors in Shanghai

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and Hong Kong to trade shares on each other's exchanges. ``not there.

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Sharanjit Leyl is in our Asia business hub in Singapore. It is

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being called something of a breakthrough, this is according to

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the chairman of the Hong Kong exchange, it is essentially a

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crucial reform to open up China's capital markets. They want to boost

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stock market ties with Hong Kong. This will essentially allow

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cross`border stock investments between Hong Kong and Shanghai. It

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would allow mainland investors to trade shares in designated Hong Kong

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listed firms at the same time Hong Kong investors would be allowed to

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buy shares in companies listed in Shanghai. It's a pilot project that

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will launch after a preparation period of six months, and during a

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trial period, Hong Kong investment in Chinese stocks will be limited to

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a daily quarter of about $2 billion worth. The main and investment will

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be limited to just less than that. The pilot scheme will also be

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limited to companies and dual listed in Shanghai and Hong Kong, as well

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as other selected blue`chip companies. There are some challenges

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to this. We know that China's stocks have been undervalued for a number

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of years. This may not appeal to outside investors. Although, I spoke

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to an analyst who said that letting Hong Kong go in there and putting

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money into Chinese stocks could help to boost those valuations. That is

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one upside to this tie`up. It was announced hours after the Chinese

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Premier allowed conditions to open up capital markets in mainland China

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and Hong Kong. He made those comments at the bow of Forum for

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Asia in China, that is currently going on. Some of the reforms that

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China has made, they have loosened their grip on the Chinese currency

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as well. They are trying to help the internationalisation of the Chinese

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currency. Part of this is a whole slew of reforms in opening up

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Chinese capital markets. A lot of news coming from China today. Thank

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you. In other news, we stay with China for a moment and fresh data

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that shows consumer prices on the Mainland rising 2.4% in March from a

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year earlier, much in line with analysts expectations for a rise of

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2.5% for the month. Producer prices also moved in line with

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expectations, falling for the month of March from a year earlier by

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2.3%. General Motors has put two engineers on paid leave over the

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automaker's deadly ignition switch recall. The company also revealed

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that costs from the scandal could soar to $1.3 billion. GM chief

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executive Mary Barra announced the first disciplinary personnel action

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stemming from the company's internal probe of the circumstances leading

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to the delayed recall of 2.6 million older model cars. Activist investor

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Carl Icahn has dropped his call for eBay to sell its payments business,

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PayPal.The billionaire had been trying to gather support for the

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proposed split before the e`commerce giant's annual shareholder meeting

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in May. But Mr Icahn, who first made the call in January, said it had

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become clear that several major shareholders would not back the

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plan. Let's have a look at the markets. These are the Asian

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markets. We can see mostly down across the board, especially in

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Japanese shares. Syncing to a six`month low on Friday. A sell`off

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on Wall Street spread to Asia, too resilient markets, up until now.

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From me and the team, goodbye for now. Christmas Eve chaos after

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flooding at Gatwick airport last year should be a wake`up call to

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airports across the UK, according to a committee of MPs. More than 11,000

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passengers were hit by delays and cancellations. Ministers say more

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should have been done to make sure customers have basics such as food

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and water if there are problems in the future. Here's our transport

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correspondent Richard

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