:00:00. > :00:16.Now for the latest financial news and World Business Report.
:00:17. > :00:19.Leaked documents from Panama reveal that close relatives of some of
:00:20. > :00:25.China's top leaders have links to offshore companies in tax havens.
:00:26. > :00:32.Yes, the world is now spending $1.7 trillion a year on this stuff -
:00:33. > :00:34.sending the share price for the makers to 4-year highs.
:00:35. > :00:45.We'll tell you who the big spenders are.
:00:46. > :01:02.Michelle tells me I have nine minutes! I will give you an exciting
:01:03. > :01:06.look into the world of the business. interest rates - do they fuel
:01:07. > :01:10.housing bubbles? Tax authorities around
:01:11. > :01:12.the globe have promised action following the leak of millions
:01:13. > :01:14.of documents from the Panamanian They reveal how the world's rich
:01:15. > :01:19.and powerful hide their wealth They also show how leading regime
:01:20. > :01:26.figures in Syria and north Korea were able to keep their companies
:01:27. > :01:30.trading, despite being blacklisted The papers make uncomfortable
:01:31. > :01:38.reading for a number of current Close relatives of senior Chinese
:01:39. > :01:43.political leaders - including the President, Xi Jinping
:01:44. > :01:46.- are among those found to have Our correspondent Celia
:01:47. > :01:55.Hatton has more details. Ask the wrong question,
:01:56. > :01:58.this is what happens. Chinese citizens who want
:01:59. > :02:01.their Communist leaders to list their assets,
:02:02. > :02:06.are rounded up and put in prison. This is the group of men who rule
:02:07. > :02:10.China and they refused to discuss their wealth but they say they want
:02:11. > :02:12.to eliminate corruption Punishing 300,000 officials
:02:13. > :02:24.last year alone. That makes today's news very
:02:25. > :02:26.uncomfortable for Chinese President The relatives of seven current
:02:27. > :02:30.and former Chinese leaders were found to have links to offshore
:02:31. > :02:33.companies, all in known tax havens. Of the seven named, these three are
:02:34. > :02:37.the most important: President Xi Jinping and two other top leaders -
:02:38. > :02:43.Zhang Gaoli and Liu Yunshan. All three men have in-laws who are
:02:44. > :02:47.listed as directories or It is not illegal for Chinese
:02:48. > :02:53.citizens to invest overseas but the Communist Party bans
:02:54. > :02:56.relatives from profiting from their political connections, so
:02:57. > :03:01.this new information is unwelcomed. So far, the government is doing what
:03:02. > :03:04.it can to control the story When I enter "Panama Papers"
:03:05. > :03:09.into China's most popular search engine, this is what I get -
:03:10. > :03:12.a message telling me But even the censors can't hide
:03:13. > :03:18.a growing awareness in China that there is a large wealth gap
:03:19. > :03:21.between the vast majority of China's ordinary people and the red
:03:22. > :03:26.aristocracy - the wealthy officials The fact that more and more details
:03:27. > :03:31.about overseas holdings of the red aristocracy has come out,
:03:32. > :03:37.this will translate into resentment Also, more entrenched doubts about
:03:38. > :03:46.whether this one-party authoritarian Slowly we are learning more
:03:47. > :03:53.and more about how the relatives of Chinese leadership store
:03:54. > :03:57.their money Overseas. Despite best efforts of the
:03:58. > :04:00.Communist Party, an unexpected leak of files from half way around the
:04:01. > :04:05.world in Panama is shedding light Global defence spending has now
:04:06. > :04:18.reached $1.7 trillion a year, thanks in parts to the war against
:04:19. > :04:23.ISIS that figure is on the rise. Arms firms are profiting - their
:04:24. > :04:46.share prices rising to a four-year Over the past few years, Western
:04:47. > :04:59.countries have tried their best to pare back defence spending but
:05:00. > :05:05.others have sales soaring. The US defence budget declined by 2.4% last
:05:06. > :05:12.year although it is still far and away the biggest military spender.
:05:13. > :05:18.Saudi Arabia increased by 5.7% to 87 billion dollars. They are involved
:05:19. > :05:28.in was in Yemen, Syria and Iran. The far east has seen the biggest
:05:29. > :05:32.increase. China rose 7.4%. That has provoked increased spending by
:05:33. > :05:39.neighbours such as Indonesia, the Philippines and Vietnam. If you are
:05:40. > :05:46.any of Japan, South Korea, you name it, this idea that there is the
:05:47. > :05:51.threat not 20 years in the future, now. It is going to get stronger and
:05:52. > :05:58.stronger. He suddenly say, we have to spend money. This increase in
:05:59. > :06:03.spending is the boost to the arms industry. The world is largest
:06:04. > :06:10.defence contractors has seen its stock double since 2011. It is
:06:11. > :06:15.positive development for defence firms but, at the same time, those
:06:16. > :06:22.dollars are emerging not from their markets but from the Asia-Pacific,
:06:23. > :06:28.in particular, in an increasingly competitive environment. They can
:06:29. > :06:32.not only have to compete with each other and also with the fast
:06:33. > :06:40.developing industry of Asian countries like South Korea.
:06:41. > :06:56.US, China, written is number five. Higher, in fact than Russia. --
:06:57. > :07:03.Britain. Exciting stuff. The Reserve Bank of India is expected to cut its
:07:04. > :07:07.interest rates. The global trend. Low oil prices and the uncertainty
:07:08. > :07:15.surrounding the Chinese economy factor. Is this the new normal and
:07:16. > :07:25.does it signal danger for the global economy? Lets find out. Thank you
:07:26. > :07:30.for getting up this alley. Australia kept their rates on hold, as
:07:31. > :07:37.expected. Let's talk about India, the world 's fastest growing
:07:38. > :07:43.economy. Does it do good job using interest rates as tool to manage the
:07:44. > :07:48.economy? India is very complex economy. It does have the best job
:07:49. > :07:51.it can. Its biggest problem at the moment is trying to restructure some
:07:52. > :07:58.of the bad debts in its banking sector. Really, on the Indian
:07:59. > :08:05.economy, the stimulus needs to come from structural reforms,
:08:06. > :08:10.legislative, and reform in the banking sector. At the moment it is
:08:11. > :08:15.overloaded with bad debts. We all know that India needs structural
:08:16. > :08:20.reform, it is not just about interest rates. But the negative
:08:21. > :08:28.interest rate, that is where the central banks charge the banks to
:08:29. > :08:34.put their money in. Do not want your money, get your money out there. --
:08:35. > :08:39.we do not want. People who have money are not putting it into banks,
:08:40. > :08:49.so they put it into other areas like housing. Does that artificially
:08:50. > :08:54.inflate the prices? Yes, people cannot put money on deposits in our
:08:55. > :09:00.conservative way, they look for assets, whether it is property,
:09:01. > :09:05.housing to boost their returns and get better returns. The problematic
:09:06. > :09:10.with it if it does not address a lot of the problems. One reason for
:09:11. > :09:15.negative interest rates if they do not want their currency revalued
:09:16. > :09:18.and, secondly, and more substantially, we have problem with
:09:19. > :09:26.the banking system globally because the current models we have is
:09:27. > :09:30.basically one not fit for purpose. They need to keep interest rates low
:09:31. > :09:35.so that, as we restructure banking, as opposed to the current banks,
:09:36. > :09:41.they need to keep rates low to make sure we do not get the shock and, as
:09:42. > :09:46.the current banks start to winter on the vine, so to speak. We had the
:09:47. > :09:52.list of some of the major central banks around the world using
:09:53. > :09:56.negative interest rates are, unfortunately we are out of time.
:09:57. > :10:01.But they are using negative interest rates because all the other tools
:10:02. > :10:08.have been used. Mark, always our pleasure. We are saying goodbye to
:10:09. > :10:14.make look, I have been told. Follow me on Twitter. I will be back
:10:15. > :10:23.shortly to take look at the papers from around the world.
:10:24. > :10:25.The number of police staff taking long term sick leave for
:10:26. > :10:29.psychological reasons has gone up by a third over the past five years.
:10:30. > :10:30.Figures provided to the BBC following a freedom
:10:31. > :10:36.of information request suggest long term sick leave also increased.