:00:07. > :00:17.With the recent glut in oil prices, investors are eyeing Saudi Arabia's
:00:18. > :00:25.Can the Kingdom find alternative sources of income?
:00:26. > :00:28.And, it's been a torrid year for German car maker Volkswagen.
:00:29. > :00:30.We'll take a look back at the emissions scandal that
:00:31. > :00:51.A very warm welcome to word business -- World Business Report.
:00:52. > :00:54.In a minute, we'll havemore on China's anti corruption crackdown
:00:55. > :00:58.But first: All eyes are on Saudi Arabia, which is expected to
:00:59. > :01:03.The king has already said the country wants to diversify its
:01:04. > :01:06.sources of income, as it strives to cut its dependence on oil revenue.
:01:07. > :01:09.The world's top oil exporter is expected to announce that it has run
:01:10. > :01:12.a big deficit this year, thanks to persistently low oil prices and the
:01:13. > :01:16.We're expecting more details in around six hours,
:01:17. > :01:18.plus a "transformation plan" later in the month.
:01:19. > :01:20.Richard Thompson is the Editorial Director at
:01:21. > :01:36.He joins me alive. Thank you for joining us. In recent years the
:01:37. > :01:40.government in Saudi Arabia has simply announced the budget but it
:01:41. > :01:46.year they will hold a news conference to explain some of the
:01:47. > :01:51.major changes, aren't they? Yeah, I mean, it is very significant because
:01:52. > :01:55.of the change in oil prices. And because we have a new king from the
:01:56. > :01:58.start of last year. This is his first budget. He is introducing
:01:59. > :02:04.significant changes across the government. So we have the pressure
:02:05. > :02:10.on Riyadh which is significant, it is 90% of their income. Saudi Arabia
:02:11. > :02:18.has this role as a political and social leader in the region and so
:02:19. > :02:22.Riyadh has to balance the idea of providing growth and momentum and
:02:23. > :02:27.economic diversification as mentioned but also balancing its
:02:28. > :02:32.books. We expect it to announce changes to spending and possibly to
:02:33. > :02:42.revenue policy. It is designed to cut this huge deficit that has been
:02:43. > :02:49.running. Estimates of about $133 billion US. That is about 20% of
:02:50. > :02:53.GDP. Expectations are for it to next year be reduced significantly. It
:02:54. > :02:59.will still be large, which is largely to do with this glut in oil.
:03:00. > :03:07.That is largely Saudi Arabia's own doing. Saudi Arabia has a very
:03:08. > :03:11.difficult balancing act to play, it is heavily committed to spending and
:03:12. > :03:16.wants to continue to diversify and create jobs, but it has to balance
:03:17. > :03:21.the books. Long-term it has to protect the position as one of the
:03:22. > :03:31.biggest and most important suppliers of energy. The strategic position
:03:32. > :03:35.regarding oil policy has being to keep pumping oil prices. It would
:03:36. > :03:39.like to take its competitors out of the market and retain this
:03:40. > :03:43.influence, because prices will start to come back up and Saudi Arabia
:03:44. > :03:49.wants to be in the best position for that day. The King has said he wants
:03:50. > :03:53.to diversify the economy away from such a heavy reliance on oil. What
:03:54. > :04:01.areas are they hoping to diversify into? Well, one of the primary areas
:04:02. > :04:05.is manufacturing, so, obviously, Saudi Arabia produces a huge amount
:04:06. > :04:11.of oil and a large percentage is exported as crude oil. In refining
:04:12. > :04:16.it into higher value petroleum products and taking that process
:04:17. > :04:23.further down or up the value chain into manufacturing, downstream
:04:24. > :04:28.manufacturing, you can create a more industrialised diversify at economic
:04:29. > :04:33.base, which is a priority, downstream diversification of the
:04:34. > :04:37.oil sector. They are also looking at mining, the development of non- oil
:04:38. > :04:45.natural resources that Saudi Arabia has, and tourism, you know,
:04:46. > :04:50.developing Saudi Arabia beyond that Hajj pilgrims, trying to get Saudis
:04:51. > :04:58.to spend more in the kingdom. It is quite a wide ranging strategy that
:04:59. > :05:04.they have. We will hear much more in around six hours with the details of
:05:05. > :05:06.the budget. Good to hear your thoughts and thank you for joining
:05:07. > :05:07.us. One of the big shocks of 2015 came
:05:08. > :05:12.when Volkswagen was forced to admit that cars it had sold in North
:05:13. > :05:16.America as "clean diesels" were in fact anything but, and could only
:05:17. > :05:19.pass emissions tests with the help of some rather special,
:05:20. > :05:21.and rather illegal, software. The company is still struggling with
:05:22. > :05:23.the fallout from the scandal, which triggered the recall
:05:24. > :05:26.of 11 million cars worldwide. And as Theo Leggett reports,
:05:27. > :05:28.the subject of car emissions and what to do about them is likely
:05:29. > :05:45.to prove a major theme In mid-2015 Volkswagon was riding
:05:46. > :05:51.high. It had become the best selling car maker in the world. Then it all
:05:52. > :05:54.went badly wrong. The company was caught using illegal software to
:05:55. > :06:02.help its diesel cars pass emission testing is in the US. So, let's be
:06:03. > :06:09.clear, our company was dishonest. With the EPA and the California Care
:06:10. > :06:17.Act Resources Board, and with all of you. In my German words we have
:06:18. > :06:21.screwed up. 11 million cars around the world were fitted with this
:06:22. > :06:26.cheating software. Fixing it would cost billions. The CEO, seen here in
:06:27. > :06:30.happier times, was forced to resign. What Volkswagon was doing was
:06:31. > :06:32.deliberate and illegal but the scandal has highlighted a wider
:06:33. > :06:37.problem with the way in which cars are tested. Simply the procedures
:06:38. > :06:43.are too artificial easy to cheat, and don't really reflect what goes
:06:44. > :06:46.on out in the open road. Here in Brussels, European lawmakers have
:06:47. > :06:50.been working on a new and better test for some time. Not everybody is
:06:51. > :06:55.happy with what they have come up with. The idea is to make sure that
:06:56. > :06:59.cars are tested out on the road as well as in the lab. But
:07:00. > :07:04.environmentalists said the standards are far too lenient. Governments
:07:05. > :07:07.have set limits which are twice as high as were allowed in the
:07:08. > :07:12.laboratory and they have delayed the introduction of those limits, so, so
:07:13. > :07:15.far governments are more concerned about the interest of the car
:07:16. > :07:20.industry than the health of citizens. Car companies have been
:07:21. > :07:26.accused of lobbying against these rules but they say they are actually
:07:27. > :07:31.in favour of them. We hope that the new testing methods, which had been
:07:32. > :07:35.proposed and which were stricter than today, will be agreed sooner.
:07:36. > :07:40.OK but have you been lobbying to water down the rules at any point?
:07:41. > :07:46.We have just wanted to make sure that whatever is on the table is
:07:47. > :07:53.realistic and technically feasible. There is no question the Volkswagen
:07:54. > :07:57.scandal cast a cloud over the industry. The question is whether it
:07:58. > :07:59.has a lasting impact, or whether talk of cleaning up emissions is
:08:00. > :08:03.just so much hot air? Chang Xiaobing, he's chairman of one
:08:04. > :08:06.of China's largest state-owned mobile operators, China Telecom,
:08:07. > :08:08.is being investigated by the Mariko Oi is in our
:08:09. > :08:26.Asia Business Hub in Singapore. This is a big story in China, isn't
:08:27. > :08:29.it? Indeed, Alice. He was actually reported missing on Sunday by local
:08:30. > :08:35.media but it has since been announced that he is being
:08:36. > :08:39.investigated, suspected of violation of discipline according to a
:08:40. > :08:42.statement released on the website of the central commission for
:08:43. > :08:45.discipline inspection. We don't know much about this investigation.
:08:46. > :08:54.According to the statement he was the former chairman of the second
:08:55. > :08:57.biggest Chinese operator, before becoming the CEO of China Telecom.
:08:58. > :09:01.In August, there were reports of the government was considering merging
:09:02. > :09:05.these companies. Of course, he is the latest in a series of high
:09:06. > :09:11.profile executives to be investigated by the authorities. In
:09:12. > :09:17.fact, 70 senior officials have been investigated since Beijing started
:09:18. > :09:20.to crack down on corruption. So, despite the year-end, the
:09:21. > :09:22.investigation continues. Good to check in with you. Thank you.
:09:23. > :09:25.Most Asian stock markets ticked up Monday - as traders returned
:09:26. > :09:29.Chinese shares are rising on news that lawmakers have agreed to start
:09:30. > :09:40.Oil prices have rebounded from multi-year lows while mainland
:09:41. > :09:58.Leading insurers have said they'll pass on to customers
:09:59. > :10:02.a 100% of the savings made from a government crackdown