12/05/2017 World Business Report


12/05/2017

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Now it's time for World Business Report.

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Zooming exports and crumbling classrooms.

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The paradox of Germany's lopsided economy.

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Plus will Iran stay open for business?

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Conservatives pledge to roll back Rouhani's reforms,

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as companies nervously await next week's presidential election.

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Also coming up, playing for big "steaks."

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China agrees to buy US beef as trade talks continue.

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We start in Europe's economic powerhouse,

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because in a couple of hours' time, Germany will release

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Growth is expected to have accelerated in the first three

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months of the year, fuelled by global demand for the country's

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But it's not all cause for celebration.

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Last year, Germany clocked up its biggest ever trade surplus.

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That's how much more it exports than it imports.

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At $275 billion Germany has one of the biggest trade surpluses

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It's a source of tension with its neighbours and allies.

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Look at how much more Germany sells to these top economies than it

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The US in particular has accused Germany of exploiting an undervalued

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euro to get an unfair trade advantage.

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An over-reliance on exports isn't the only problem.

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The European Commission says Germany just too frugal.

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It is saving too much, and investing too little.

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It wants to see some of that cash invested

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in the region's struggling economies.

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But many Germans think the spending should start closer to home,

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Home time at this school in the south of Berlin where students have

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more reason than most to want to get out of the building. We have

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classrooms we have to paint ourselves and windows that don't

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close and toilets that are so filthy students don't drink anything all

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day so they don't have to use them. Also, the pay makes it difficult to

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find the bull who want to do the job at all. Conditions are terrible and

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schools are falling apart. It is not just public investment that is the

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problem. Germany has a $300 billion current-account surplus. That is a

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good figure, but it suggests that German companies preferred to invest

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money abroad, perhaps because they see German schools like this, ageing

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infrastructure, and a lack of investment. And it is becoming a

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political problem. We see that, for example, in current discussions with

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the Donald Trump administration, and with France, where Emmanuel Macron

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has recently said Germany should try to bring down its current account,

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we see that German policymakers are actually with there back against the

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wall. -- their backs. They have to defend the economic strength Germany

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is seeing. This is a problem because it creates tensions. Now, in just a

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few months' time, German voters will get to choose their next parliament,

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and as they do so, they may have one of the following questions. If the

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German economy is growing so strongly, they ask, why are tax is

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still higher, and why are my benefits still so low? -- taxes.

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More simply, will I see an improvement in my quality of living?

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Joe Miller, BBC News, Germany. And since US President Donald Trump

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and Chinese President Xi Jinping met in Florida last month,

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the two countries have been in talks to try and reduce

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tensions over trade. Well, it looks like those talks

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are beginning to yield results. In the last hour or so,

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we've heard there could soon be more access to China's markets for US

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farmers and financial firms. Rico Hizon is watching developments

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for us in our Singapore bureau. Tanya! Hi! He loves to jump in. What

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is happening? Do you know what, this is a turnaround after all of the

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negative rhetoric from President Trump on China before Xi Jinping's

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visit. But from the looks of it, it is positive, with the US and China

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expanding trade and beef and chicken. And they are increasing

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access for firms. The plan is to reduce the massive trade deficit

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with Beijing. The secretary said the deals are the first tangible results

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of trade negotiation allowing US import of beef no later than July

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16th, and Chinese cooked poultry will be allowed in the US markets.

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And other services will begin a licensing process in a sector where

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the union pay system in China has had a near monopoly. The secretary

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said these deals will bring down the trade deficit between the two

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economic superpowers and will have an impact on the Chinese surplus by

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the end of the year. So, Tanya, on paper, the US has the upper hand.

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Thank you very much, Rico Hizon, reporting from Singapore.

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We are also looking at Iran, which holds its presidential

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It will be closely watched by hundreds of companies worldwide

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The current president, Hassan Rouhani, has opened up Iran

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to foreign investment and has attracted some

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But conservative challengers have said they would reverse his policy.

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Later today the candidates hold the last in a series of presidential

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debates, which will focus on business and the economy.

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Two years ago, jubilation on the streets of Tehran. World powers

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promised to lift sanctions on Iran after Hassan Rouhani promised to

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scale back the nuclear programme. The economy, close to collapse, is

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now growing at 7% a year. Hassan Rouhani says foreign trade and

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investment are vital for future growth. Iran has struck trade in the

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oil and gas sectors and ordered new aircraft from Airbus and Boeing. And

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Peugeot are back making cars. But the main conservative challenger to

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Hassan Rouhani says the rapprochement with the US is

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failing. One in eight Iranians is unemployed. The wealth gap is

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widening. He wants to give Iranian firms the lead in rebuilding the

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economy, rather than dealing with the West, and wants more trade links

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with countries like China and Russia. He also promises to create

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millions of new jobs for young Iranians. But he has not yet said

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how. Jeremy Howell, BBC News. Reza Shaybani is Chairman of

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the British Photovoltaic Association which is working in the solar

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energy business in Iran. Welcome to the programme. Thank you.

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Are you concerned about the elections? Some of the markets could

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be reversed. Not really. We see the acceleration of the growing economy

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will carry on regardless of... Because the desire is there to make

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it happen? Absolutely. Iran is a growing economy with a young and

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dynamic highly educated population. It has the ability to grow further

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in the region. So I don't see any problem with it. What has been your

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experience during the time that Hassan Rouhani has been in power?

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Before that, things were different. Things are different. Look no one

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can fix the economy and everything else the Iranians have had to deal

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with after ten years of sanctions. Hassan Rouhani took office that a

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difficult time when Iran was isolated and the economy was in a

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bad state. In a short period of time he has made significant progress. Is

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the job done? No, it is half done. Even in this period, the Iranian

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government has attracted over $3 billion in foreign investment. And

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they managed to get over 40- $50 billion of Iranian assets which were

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frozen. Tell us your experience of the country and what you do they.

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Right. We invest in renewable energy in the solar sector. We did this

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successfully in the UK. In Iran we are doing exactly the same. Iran has

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lots of land and son and a growing economy in need of powers. --

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??MACRO1 solar energy needs a strong framework and access to finance. We

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are like that in the UK we have all of these and what we are doing is

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exporting expertise in these fields to Iran. Last year, during the visit

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of the Iranian Energy Minister to London, we signed a framework

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agreement to invest in one gigawatt of solar assets in Iran, are

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proximally 1.5 billion dollars. Thank you very much. -- apprimately.

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London-based virtual reality firm Improbable has raised $500 million

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in one of the biggest ever investments in an early-stage

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Japan's Softbank is backing the company, which builds

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large-scale virtual worlds and simulations, in a funding

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round that values the business at more than $1bn.

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Improbable was founded just five years ago by Herman Narula

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and Rob Whitehead, who had studied computer science together

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Shares in Macy's have plunged after the US department store owner

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Rivals, Kohls and JC Penney, were also down sharply amid fears

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about the health of the traditional US retail sector.

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The rise in on line shopping has seen US department stores shed more

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than 32,000 jobs in the past year, according to US government

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A quick look at what has been happening on the markets now. The

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main thing is the stabilisation of the oil price. Looking at European

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markets. The GDP figures for Germany will prove pretty influential this

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week. No move on interest rates in the UK at the moment. Inflation

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emerging from the UK on that. The US still affirming support for rate

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hikes over there. Don't forget that you can get in touch with me and all

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of the team on Twitter. Some of them don't like to make themselves too

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available. I am Tanya Beckett with the BBC.

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In the 19th century, public baths and washhouses

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