16/06/2014 World Business Report

were wondering. Those are the headlines from BBC News. Now, the

latest financial news with Sally. China's Premier makes his first

visit to the UK, $30 billion of deals on the table. Russia's just

hours from switching off Ukraine's gas supply after contract talks rate

down. `` breakdown. Hello. You are with World Business Report, I am

Sally Bundock. Also in the programme, London's bid to become

the digital capital of Europe. We look at what it is up to. The

Chinese Premier Li Keqiang arrives in Britain for a summit meeting with

PM David Cameron. Trade and investment are expected to be very

high on the agenda. Last year, trade between the countries topped $70

billion. That is a huge figure. Chinese investment, when looking at

the investment in the UK in 2012, was around $8.9 billion. Britain

hopes the figure will go up this year. China has complained that

Britain's restrictive visa regime and failure to build a third runway

at Heathrow is reducing competitiveness and more analysis on

this will come in a moment. First, let's hear from our correspondent

John Sudworth. Look familiar? Look again. This isn't Britain Thomas

this is China. Thames town is a development on the outskirts of

Shanghai, complete with clocktower is, cobbles and its own Winston

Churchill statue. TRANSLATION: British history and culture have had

a huge impact on the world. White they are among the thousands who

come here for their wedding photos. I like British style a lot. I am

longing to visit. So is my wife. longing to visit. So is my wife.

Romance is in the area, but if the Chinese are keen, Britain is

positively head over heels. David Cameron's visit last year was all

part of an effort to woo Chinese investment and boost British

exports. Thames town has its very own pub of course, but on closer

inspection, despite the familiar welcoming exterior, it is just a

facade. The same has sometimes been said of the UK` China relationship.

The PM's meeting in 2012 with the Dalai Lama at the spiritual leader

of Tibet, a man considered by China a dangerous separatist, led to a

chill in diplomatic relations. Today, although China's human rights

record is in theory still on the table, the focus is, without doubt,

on its huge and rapidly growing economy. Chinese money is being

sought for UK infrastructure projects like railways and nuclear

power and two way trade last year was worth a record ?43 billion.

Behind the scenes, tensions lurk. Excuse me. On the one hand, the

rising communist power and the other, the former colonial one.

There is no doubt about her needs are the most today. One state`run

newspaper recently described the UK as an old European country apt for

trouble and study `` who needs who. Let's talk to John Foley, a China

columnist for Reuters, about this trip. Thank you. What do you expect

in terms of trade deals clinched during the visit? For China, the

appeal of coming to the UK is looking for investment

opportunities. The chance to find and build some of the UK

infrastructure, including nuclear power and maybe even high`speed

rail. The prize for the UK is to get China to open its markets to British

trade. The UK have ambitious export targets, Osborne would like to see

?1 trillion of exports by 2020 and crucial to that is getting China to

allow Britain to supply pharmaceuticals, financial services,

cars, anything like that would be welcome. The question is at what

cost Britain opens it markets to China. What are the key hurdles

between the two sides reaching the point is they want to reach? Human

rights has been a sticking point in the past and China only a few days

ago warned the UK not to lecture it on the issue. It is likely we won't

lecture them on the trip and we will roll over and be quite steep line at

other things. The obstacles are that China won't open its markets as

quickly as most people imagine it would one decade ago `` supine.

Things like insurance and financial services have strict what they can

do. Britain has opened its markets widely and they have allowed China

to open a bank for its own currency in London, helping to turn London

into an offshore centre, a bigger one for trading and anywhere outside

China. Thank you for joining us. We will keep a very close eye on that

visit. We will keep you up to date as and when any deals are announced.

Let's talk about Russia, which is threatening to cut the gas supply to

Ukraine in a few hours if Kiir feels too pale `` Kiev fails to pay $2

billion it owes. Talks failed without agreement on Sunday. Russia

says it offered Ukraine discount, but Ukraine wanted a lower fixed by

contract. I am joined by the director of seven investment

management. I feel like it is a Monday morning discussion. Today is

critical. They could cut off supplies literally within under two

hours. We are technically running out of time. Russia can play

hardball with this. Ukraine needs the gas. Although the EU thought

they is no reason why it Russia or why

Gazprom should be flexible. As far as they are concerned, Ukraine has

least of which the political issues. There probably won't be an agreement

and they will have to go into a pay as you go back and is, to release an

amount of gas, and meanwhile they will find themselves in a position

where they won't have a long`term agreement. It is a chicken and egg

scenario. Gazprom said unless we get this amount of money by 6am GMT, we

will cut off. This pay as you go scenario has being discussed, which

was a point until the early hours of this morning. Who will move first?

Gazprom don't need to move. We will end up with a fudge. The question

isn't now, but later in the year. Demand for gas is relatively low.

Coming into autumn, that is when you will find it. It is difficult for

Ukraine, it was it isn't a functioning country. Its economics

are in a mess. It can't pay for these easily. It needs to get itself

stabilised and then try to attract investment to provide that support.

That seems a far cry. See you soon. You will talk us through the papers

in about five minutes. Let's squeeze in some other stories. London's

first tech week kicks off today, aiming to make London the digital

capital of Europe. It competes with Paris and Berlin, though no city

comes close to challenging Silicon Valley's success in California. Our

correspondent looks at why. This website is one on which entertainers

can list events and on which fun seekers Ken buy tickets. London's

Silicon Valley roundabout has 3000 tech companies, it generating $115

billion per year in revenue. Silicon Valley's companies generate three

times that much. There are two other major tech hubs in Europe, Paris's

silicon Road and Berlin's silicon Alley are what London have to

compete with. There are so many other things here, fashion, culture

industry can feed and derive value industry can feed and derive value

and to which they can add efficiency. We think there is a

special place for London within the tech ecosystem. Silicon Valley turns

out multibillion dollar companies like Facebook, Google and above. So

far, the European tech centres like London, have produced none `` Uber.

Is it because the individually Laak Silicon Valley's size? Analysts say

no. The problem is, they lack Silicon Valley's money. The average

start`up company in Silicon Valley gets $3 million from financial

backers. In Paris, the average start`up that 62% less funding. In

Berlin, it gets 80% less and in London, 81% less. There are lots of

New York and elsewhere in the US New York and elsewhere in the US

that have been successful with start`ups. They have a pool of cash

and they say, I have done it, how can I empower others to do it and

how can I make money from that and let's take a punt. In the UK, people

are more cautious white out of London, Paris and Berlin, perhaps it

is the city that adopts the Silicon Valley style of openhanded funding

which will be the one that draws the most players.

That is World Business Report. See you soon. Flair...

Thank you to Sally. We will look at the papers in a moment. The food

standards agency urges people not to wash chicken before they took it to

avoid foods poisoning. Experts say water spreads bacteria to kitchen

services, clothing and other utensils and it is only thorough

cooking that will kill the bacteria that affect 280,000 people. Our