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tv   World Business Today  CNN  June 27, 2011 4:00am-5:00am EDT

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>> it has never happened. have you done it? it is never going to happen. >> if you do, that is not your man. >> i love it. steve harvey, you are a genius. >> great interview. i loved it, man. >> thank you. hi, i'm zain verjee at cnn in london. here are our top stories this hour. cambodia is reliving a national nightmare as four former khmer rouge leaders begin a war crimes trial, charged with genocide and crimes against humanity in the deaths of almost two million cambodians in the '70s. the defendants say they are innocent. the trial is expected to go on for several years. as the crackdown in syria continues, dissidents and intellectual are to attend a government-sponsored conference
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today. president assad says it's a step toward national drag about reform, but -- dialogue about reform, but the opposition voiced concerns that the conference is just for show. employment will speak with with republican and -- president obama will speak with republican and democrat later to start negotiations to get the debt celling back on track. the government will start defaulting on loans in august. greece's parliament is set to vote on a new set of austerity measures this week. passing them means that greece is going to get another $40 billion of bailout funds. the measures would include cutting publicnvestment, a reduction in bureaucracy and sell-off of government assets. those are the headlines, i'm zain verjee at cnn in london. "world business today" starts now. good morning from cnn london, i'm charles hot san.
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>> and good afternoon from cnn hong kong, i'm andrew stevens. welcome to "world business today." the top stories this monday, june 27. greece at a crassroads. lawmakers -- crossroads. lawmakers begin the journey to shape the country's future. saint george and the dragon. weekend jiabao strengthens ties with a trip to the unationwide kingdom. and saudi arabia's plan to wean its energy-dependent country off oil. concerns over greece's finances continue to drive the markets at the moment. we've seen some substantial losses in ashe this monday. a weak open to trading in europe before a slight rebound and u.s. futures are pointing south, as well. it does seem to be all go greece still. >> absolutely -- all about greece still. >> absolutely. that explains the eight weeks of declines we've had on european stocks. believe it or not, we've been open for an hour and 2 1/2 minutes, and having seen -- seen
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wavering. we started off down, up, we're down again. so the worst off is actually the xetra dax off by .4%. the semi off .3%. and the acc losing..2 %. london ftse down .07%. the chemical chemicals, novellus hit. in the currency markets, we continue to see weakness for the pound there at 1.5947. europe, weakness, 1.42. the dollar is up just about .4% again the yen, 80.78 the yen to the dollar. >> pretty much a down day in asia, as well. the shanghai composite in asia. the only one bucking the trend, up by .4% to the good, on hopes
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that china's financial titlening is nearing an end. we had the premier saying last week that inflation would be liked by the end this year. that was the only good spot. in the region, losses in tokyo and sydney as greece continues to weigh on investors' minds much there the yen strength against the euro hitting exporters on the nikkei. and banks in sydney, mining and resource stocks weighing on the markets. a look at the u.s. futures set for a lower open when trading begin in a few hours. this is how they're faring in the premarket action at the moment. as you see, modest losses in the dow predicted down .1%. the s&p more severe, down about .3%. charles, we've been talking about greece for a long time now, and it's going to dominate the headlines this week. >> i don't think we'll stop talking about greece for some time to come. i hate to disappoint you.
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this is the story that will dominate for a long time. meanwhile, though, speaking of time, it is running out for greece in a sense. if the parliament in athens can't agree to terms on a new bailout this week, it could send greece over the edge, and we could be talking about the "d" word, default. e.u. ministers insist that athens must agree to a new austerity plan on the table in front of parliament to be voted on tomorrow. they must reach grammy before the country can receive additional assistance. the problem is that as many as three greeks in four are believed to oppose any more tightening. again, tuens of thousands are expected on the streets protesting yet more austerity measures. if that weren't enough, there's a 48-hour general strike planned for tuesday, the day of the vote, and for wednesday. >> greek prime minister papandreou may have survived a confidence vote last week, but there's no letup in the pressure
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that he continues to face. he's certainly facing quite a lot this week. in fact, you could say it's one of the biggest weeks of his career. it starts today, june 27, with a three-day debate. members of parliament will discuss implementing the country's new austerity program. it's by no means a foregone conclusion. in fact, opinion in parliament is pretty divided. as many as five of mr. papandreou's disillusioned ministers are reported to have threatened to withhold their vote. this is significant because the government only has a majority of five which could prove disastrous for mr. papandreou if they vote against it. not only mr. papandreou, greece, the euro zone, indeed, the world economy, as well. that debated will draw to a close on june 29. ministers will vote on the package. if they vote against it, greece will be heading for default. if they approve it, e.u. ministers and imf executives are expected to approve payments due under the first bailout and agree to terms of a second
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bailout which is also worth around $1 -- 170 billion euros. there is another big date to remember, july 15. that's d-day for greece. default deadline day. without an agreement on the second bailout, the country will simply run out of money. and the repercussions of that will be felt, charles, around the world. on a day of yet more protests in greece and more debate as lawmakers sink their teeth into -- the whole question it seems into the future. linda joins us. one issue surrounds the finance minister. it's down to his persuasive political skills to get the vote through. would you agree, and could he succeed? >> well, at the moment he's been doing quite well. he's been saying the right things, trying to get his own
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party to support him. but things are very tight at the moment. there are as many as five m.p.'s who are not necessarily going to vote for the austerity measures. at the moment the government has only a five-seat majority in parliament. so persuading these five to vote for him will be difficult, and otherwise we're looking at a -- a very tight, a small majority in parliament if any at all. so he's been trying hard, saying this is the only way forward. you know, we must stockton these measures. we've -- must stick to these measures. we've been doing it for more than a year. it's exactly what the greeks are complaining about, saying we can't take any more austerity, you're talking about new measures, bailouts, where are the things we've been promised. he's done a good job persuading things but measures are generally very, very difficult and hard for the middle classes.
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he's facing opposition from the politicians in and out of his own party and also from the people on the streets who are planning a number of protests. >> what about the position of the opposition, the new democracy party, the right wing and some would say that they were the party who in power got greece into this mess in the first place? what is their attitude? why are they opposing austerity measures when to vote them down at this stage would seem to be financially suicidal for greece? >> reporter: at the moment the main opposition is not necessarily opposing measures. they're saying they're opposing the heavy taxation that goes with it and certain of the measures. so as a result of the debate in parliament brings the opposition any closer, they said that they might even change their mind. but it is hard to do because the finance minister held talks with
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greece's creditors last week -- it didn't happen in terms of measures. there will be a renegotiation of the terms -- something we are unlikely to see but something they are pushing for. >> putting all of this together elinda, what is the best that one has to make? is it that the government would just squeak through or that it won't quite squeak through with the $110 billion in austerity measures? >> it's such a tough one simply because it's probably the closest -- closest we've had in a very long time. in theory, it will. but as the debate has begun in parliament and we have several days to go before the measures are voted in and with so much noise from within the governing party athe opposition, it's har to tell whether the measures
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will be voted tlumpt ed -- vot. if they're not voted through we look at greece not getting a bailout plan and this leading greece in a position where it has no money by mid july and going bankrupt effectively. so it's an extremely difficult week politically for greece. >> elinda, thank you very much, indeed. joining us live from greece as the parliament there starts its debate on $110 billion in austerity measures. andrew? charles there's been no lack upon commentary -- look of commentary over whether greece can or should implement austerity measures. you can add one more voice to the dwamt now. the billion -- the debate now. the billionaire george soris, saying it's inevitable that a country will leave the euro. he said nations with weaker economies should be allowed to exit the single christiansy.
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he didn't mention -- currency. he didn't mention greece by name but warned that economic collapse could spread quickly through a vulnerable system. he urged broadening the euro zone. don't be lulled into thinking that this debt crisis and the problem with dealing with deficits is combined to greece. threw their are countries -- there are countries in europe and the largest economy in the world, the united states, dealing with its own fiscal crisis crisis. president obama sits down monday separately with the leaders of his own party and the opposition. the clock is ticking. the white house says if congress doesn't pass a law letting it borrow more money by the 2nd of aurk just over a month -- of august, just over a month away, the u.s. will default on its obligations. so do you scrimp and save or borrow a couple of trillion dollars more? democrats want to close some tax loopholes for businesses and wealthy americans.
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here's what both parties say about that. >> more and more tax revenue in the mix is not going to produce a desirable result, but it won't pass. put aside the fact that republicans don't like to raise taxes, democrats don't like to either. >> you cannot achieve what you set out to do if you say it's just about cutting. it has to be about naturing the revenue stream, as well -- increasing the revenue stream, their. there are things you can do in terms of special interest loopholes so that the tax code is rampant, is just full of. now let me just remind, all this talk about tax cuts, in the bush years the republicans said that tax cuts will produce jobs. they didn't. they produced a deficit. >> well, republican congresswoman michele bachmann stepped into the debate on sunday. she proposed reducing corporate taxes and eliminating taxes on capital gains. bachmann will announce her bid
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for presidential nomination on monday, andrew. okay. reinforcing the euro zone, china's premier takes in the english countryside. britain wants a bigger bite out of the chinese market. will wen jiabao deliver?ca reple. that's healthy skin for life. only from aveeno.
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welcome back from cnn london and cnn hong kong. these are some of the top business stories -- in argentina, the country's biggest and most popular football club is being relegated, its team being relegated to the second division. fan fought -- fans fought with
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police after the team fell short in a game on sunday. the team which is 1110 years old is nicknamed the millionairies. a t's reportedly struggling with a $68 million debt. andrew? charles, stranded air travelers down under may be breathing a bit easier now that a giant volcanic cloud seems to be clearing. australia's biggest airline resumed flights to and from new zealand on sunday. the volcano has been snarling air travel in the southern hemisphere since it began shooting ash into the atmosphere three weeks ago. after a 50-day hacking spree that it hits claim targets from the cia to sony, the group lulz sec quit.
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this comes after the hacking of a british man that the group says is not a member. the chinese premier wen jiabao is making the rounds in britain. the second of three stops on his european tour. in a couple of hours he'll appear with his counterpart, david cameron. we have more from beijing on the latest on the trip. jaime, what is the chinese premier having to achieve with this trip? >> reporter: andrew, premier wen's visit is one of the series of high-level visits by chinese officials to europe. this is their way of moving on to a broader stage and project itself as an outward looking and responsible country. china after all is its number-two biggest economy in the world, and china has some $3 trillion worth of foreign exchange reserve and about 1/3
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of them is believed to be invested in euro-denominated assets. china's staying the course in europe is very important in propping up europe's faltering economy. china also wants to develop more trade with europe. its number-one trading partner. its trade last year is something like $580 billion, and china want to promote more trade with europe. in fact it's even promising to open part of its market beyond beijing and shanghai to second and third-tier cities. they hope to sign more deals in the three european countries its visiting and hopes to buy more sovereign debts like in hungary as he did in greece. >> thank you very much for that. reporting from beijing. significant that premier wen is saying china has an appetite for
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the euro sovereign bonds. that must help calm some investors at least a little bit. >> yeah. it must ruffle a few people in washington actually who are hoping to sell more bonds. okay. ahead on "world business today," we'll check on an update on tropical storms causing trouble in asia and tell you about a transportation triumph that's being tested in china. with most anti-wrinkle creams. the cream disappears but your wrinkles don't. ♪ introducing neutrogena® rapid wrinkle repair. it has the fastest retinol formula available. in fact, it's clinically proven to smooth wrinkles in just one week. so all you have to do is sit back and watch your wrinkles go away. new rapid wrinkle repair. from neutrogena®. maybe you don't think you're at risk for heart attack or stroke
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welcome back. you're watching "world business today" live on cnn. >> torrential rains from the philippines to south korea all from the same tropical storm. our meteorologist ivan cabrera joins us from the world weather center. good morning. ivan. good to see you, charles. we've been tracking the storm for a few days, tropical storm, not even a typhoon. just unbelievable. it's reached almost typhoon strength. it's wreaked havoc across asia as a result of heavy rainfall. the system is going extratropical into the yellow sea. a cluster of thunderstorm activity across the western pacific. in the philippines, picture this -- getting half the yearly rainfall in just seven days. that is what was done in manila. they have been left flooded. just incredible here the amount
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of rain that has fallen in seven days. centimeters at a time. each and every hour, just pounding and pounding. and it didn't even get close. it was the outer bands that fed in with abundant tropical moisture that continued for days at a time. almost a meter of rain and damage, as well, being left in the philippines. they are cleaning up. it's going to take some time. can't recover from rain that quickly. southeast asia also being impacted. this rain from hyma, another tropical storm that hit vietnam, and it turned up tropical moisture dumping upwards of 150 millimeters across parts of laos and into cambodia. and with meari it dumped heavy rain in south korea and china. look at what happened in the sea as an engineer vessel got caught up in the storm. rough seas churned up by thunderstorm meari. folks in trouble, 12 crew member
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had to be extricated. but everybody is in good shape. unfortunately, those are the lucky ones. we did have death not only into china but the philippines, as well. an unfortunate scene there. we are done with tropical storm meari. if you are watching the skies, we do have an asteroid, going come to see come close to earth but not hitting us, point your telescope to the north. that will do it for weather. stay with us. "world business" continues after the break.
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from cnn hong kong, i'm andrew stevens. >> and i'm charles hodson at cnn london. welcome back to "world business today." back to our top story now, the battle that greece's prime minister george papandreou is finding out in parliament there in athens. ministers are discussing the latest austerity plan. it's $110 billion in new measures, and lenders say it must be passed if athens is to receive additional funding from the e.u. and the imf. with protesters out in force again and a 48-hour general strike looming on tuesday, there is widespread opposition. ministers will vote on the plan on wednesday. uncertainty over greece's future is hitting the markets. let's look at the numbers 90s into the day. we have been moving around actually, but really it's a sort of uncertain cautious time, i suspect. we are seeing slight gains there for the london ftse. and much smaller losses for the dax in particular for the acc and the zurich smi. clearly the markets, investors
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really like a cat a hot tin roof at the moment i would say with the greece issue. andrew? >> i reckon that's a description you could apply just about across the world at the moment, charles, as we watch and wait for greece. that's what happened here in asia today. possibility of a greek default obviously weighing heavy still on the markets as that three-day debate on the austerity measures gets underway. nikkei down by a little over 1%, not helped by a stronger yen. the hong kong hang seng do down .6%. shanghai bucking the trend. getting a bit of a follow-through after comments by the leadership last week that inflation will be liked by the end of the year, they say. and that's helping the markets there. the australian market down 1%. a little over 1% in sydney today, charles. >> okay. i don't think we're descending at all from the overall pattern if i tell you that u.s. markets look as if they're going to be heading for a slightly higher open when trading begins later on monday. still very much volatile to
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sideways. this is how the u.s. futures are looking in premarket action. they've gained slightly in the past half-hour. not much to write home about, andrew. >> yeah. it shows that uncertainty flip-flopping around waiting to get some form of closure on greece. and we just -- it's been going on for so long now. there doesn't seem to be any clarity emerging yet. certainly if we listen to our correspondent in athens, there doesn't seem to be any finality about what will happen the next three days. in the other big market-moving stories this week -- starting today, monday, we're going to get personal income and spending data coming out of the u.s. economists polled by briefing.com expect personal income to rise by about .3%. but spending crucially will stay flat. when you have flat spending, you don't have an expanding economy. also looking out for nike earnings. they're out after the bell today. so keep an eye on that one.
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tuesday, we've got international monetary fund meetings, the executive board is holding its meeting in washington, trying to decide who is better to be next manager in the imf after the departure of strauss-kahn. lagarde is thought to get the top job. on friday, bank of japan is due to release its quarterly survey. analysts expect a steep drop in business confidence after the devastating earthquake and tsunami back in march. still very much influencing investors and business decisions in japan. we're also going to be getting u.s. sales figures for the month of may from the big automakers, general motors and ford in the u.s. and also the world's biggest toyota has taken a big hit from the tsunami.
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it may be interesting reading what the numbers are doing for auto sales at the moment. charles? besides all that fallout from everything happening in greece, what else will the market sink their teeth into this week? to get a read on what's imminent on the market roadmap, we turn to senior trader at etx capital in london. i think i'm going to let you choose your own first question. what do you think is going to be number-one issue this week? if you want to say guys, please don't be -- to say greece, please don't be shy. >> greece has been dominating the markets the last month, certainly the last week when we saw loss of volatility based around greece and sovereign debt. i think it's going to be an issue going forward. we need to see an austerity package that's firm, concise, it needs to be agreed by the imf, as well. and it's a five-year plan looking to reduce around 78 billion euros worth of debt for greece. if it's not, greece effectively
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defaults and we go into uncharted territory. any package that greece puts forward to the imf, it will be agreed to. then it's likely to have a knock-on effect to european bank. and they're having a rough time at the moment. they have a large amounts of debt on their hands. they've only been asked in the last 24 hours that they have to increase their tier-one capital ratio by it.5%, as well. this is -- this adds to the woes, and it's likely to remain the main theme for the markets over the inning weeks. -- over the coming weeks. >> okay. it seems that we are seeing a lot of rotation if you like within the currency markets, clearly a lot of weakness in the euro, a lot of weakness, too, for the pound. that sometimes to be focusing on the bank of -- that seems to be focusing on the bank of england. is this a big issue? >> a major issue. one of my currency traders tells
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meese you buy dollars and wear diamonds. the dollar is seeing a rebound and this on the back of a weakening pounds, weakening euro. the bank of england has got its hands tied. it can't do anything with regards to interest rates especially with the softening economic numbers that continue to come out. what i'll also be looking for is corporate numbers coming out in coming weeks as companies report their earnings. it's likely that we've hit a peak in corporate earnings cycle, and we could start to see a turndown, as well. we haven't seen any mention of that from company or brokers so far. but it could be that brokers begin to revise their forecast downwards, as well, and on the back of that we could start to see equity prices move to the downside. >> okay. a move to the downside. this is interesting because i'm reading analysis, for example, which says that europe is looking like a huge big buying opportunities at the moment. the currency is weak, and in terms of the european market relative to the u.s. market, it has asserted that it's trading
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at a 25% discount. should we be filling our boots on european stocks or dumping them? >> you can always get it cheaper. and i feel at this moment in time, in the current economic cycle, this point in time in the economic cycle, i feel that there seems to be a bit more downside to be had before we turn back up again. and the money flow seems to be coming out of equities. i spoke to a pension fund manager a couple of weeks ago. and he says that the pension funds have been overweighted in equities and are slowly reducing their positions and going into bonds. this is likely to remain the theme for the next six months until we start to see an unturn in economic growth and the economic cycle as a whole. >> we have to leave threw. thank you very much, joining us from etx capital. many thanks to you. andrew? now for all you trainspotters out there, in a few days from now, train passengers in china will be able to go from beijing to shanghai in less than five hours. the nation's newest high-speed
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rail service should be unand running by this thursday -- up and running by this thursday. it will go 300 kilometer an hour, and the route is more than 1,300 kilometers long. that's four times the distance between london and paris. cnn got on board for a preview ride. we're joined on the line, having completed the trip to shanghai. eunice, it will take five hours, how long -- how long does it usually take to make the distance? >> reporter: well, it could take almost twice that amount of time, actually. just as you'd expect on a high-speed train, anywhere else in the world -- everybody here was pleased with how smooth and quiet the ride was and really how quickly the train was able to transport everybody from beijing to shanghai. i wanted to tell you more about the seats. they're very comfortable. there was a lot of leg room even in second class where you could watch television overhead or a movie. they had food and beverage
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services. it all came at a price of $85. that's the average ticket price when customers come, passengers come on to the trains. the average price about $85, a lot cheaper than flying here. again, as you had mentioned, the biggest selling point really is that the train ride cuts the travel time down in half, to five hours. this is between two of the most important chinese cities and makes it just much more efficient for people to travel around and do business, andrew. >> there's been criticism, though, hasn't there, about the cost of this project. >> reporter: well, the cost is massive. i mean, this is a huge project. some of the estimates i've been hearing are that the government is going to be spending up to $900 billion on this project. the government is just putting a lot of that money into the network, much of it is being paid for through loans. so there are a lot of concerns
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about debt. this are concerns that the new lines especially to the poorer parts of the country aren't commercially viable at all. a lot of people can't afford to buy the tickets even though by western standards they're inexpensive. some of the experts we spoke to this morning, as well, had pointed out that china isn't building the infrastructure to make the money. at least not for now. they say that it's looking to build up all the lines to make it easier for people to travel and set up factories sooner rather than later and make the country much more competitive compared to others. >> thank you very much. want to point out that the picture were not actually from today's trip. that was taken by cctv. a test run a few days ago, judge uft to make that clear. -- just to make that clear. charles? still ahead on "world business today," we'll tell you about undermining confidence in
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companies in china. and investing in the youth of saudi arabia, a key part of the country's diversification plan. can your moisturizer do that? [ female announcer ] dermatologist recommended aveeno has an oat formula, now proven to build a moisture reserve, so skin can replenish itself. that's healthy skin for life. only from aveeno.
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welcome back to "world business today." wlnchlth it comes to establishing honesty in the marketplace, proper accounting and transparency in business transactions are obvious requirement. but there's a trend appearing in china that's putting a damper on the faith of foreign investors. we look at the situation starting with a timber company that's on the defensive. >> reporter: timber, a chinese timber operator cuts these down for profits. amid fraud allegations since early june, it's the company's share price that's fallen by 90%. the company, listed in toronto, claims it bout 200,000 hectares of trees in china's southwest. muddy waters, an investment
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firm, claims the company overstated holdings. they supply products for pulp and raw paper products, denied it and fought back. this company has taken out a major short position in our company and then issued a report designed to make the money by the decline of our stock. as it turns out, sino-forest is the latest chinese company on foreign exchange to face questions about accounting and transparency. last month trading in wall street listed a finance tech firm as suspended after its auditor, deloitte, resigned, accusing the company of fraudulent financial data. they've launched an investigation into deloitte's claims and is operating with the securities and exchange commission. and on june 14, hong kong listed nine dragons paper loss its credit rating, shares plunged 19% that day. s&p said it was because of insufficient access to management. nine dragons disputed the
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comments. analysts say that transparency issues like those are sparki ii investor concern over other chinese companies listed on foreign exchanges. some wonder whether they can trust the auditing and listing price at all. in some u.s. auditors are contracting work to chinese auditors on the mainland. >> somewhere in these two elements of trust, there's been some -- there's been some deficiency, okay. either the auditor in the mainland, right, shouldn't have trusted the information given to them by management, right, or the audit was conducted in such a way that it was not a credible basis for a true and fair view assessment. >> reporter: but major auditors maintain they take a rigorous approach to their work and set high standards. [ bell ] >> reporter: and analysts point out there are many solid chinese companies listed overseas. still, canada's globe and mail correspondent says questions
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about chinese companies will continue. mark mckinnon investigated sino-forest for two weeks in china. >> i think that what you can fairly say about a company like -- about chinese accounting practices in general is that one of the more troubling conversations that i kept having in hunan was people weren't surprised by the allegations. they didn't think this was necessarily that out of character. >> reporter: for its part, sino-forest has released documents to try to show it owns the assets it claims and says it's brought on price waterhouse coopers for an independent probe. results are expected in a few months. investors will be watching. cnn, hong kong. shares of the toronto-listed company have been pretty much in freefall since the allegations about it, overstating its assets first, merged. since june, shares have plummeted 86% to $2.62.
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and it shows no sign of letting up either. its stock price tumbled more than 18% last week alone. charles? coming up next, andrew, how saudi arabia is diversifying its economy to create new job opportunities for its nationals. it's me? alright emma, i know it's not your favorite but it's time for your medicine, okay? you ready? one, two, three. [ both ] ♪ emma, emma bo-bemma ♪ banana-fana-fo-femma ♪ fee-fi-fo-femma ♪ em-ma very good sweety, how do you feel? good. yeah? you did a really good job, okay? let's go back to drawing.
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live from cnn hong kong and cnn london, this is "world business today." welcome back. we want to update you now on
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a story that we first reported late last week on thursday, in fact. saab, the swedish automaker, said it had run out of money and could not pay its staff of 3,800 people. we're getting an update today. saab has an order from an unnamed chinese company for 582 vehicles for a cost of 13 million euros, $18.5 million. that money will be paid up front which will allow saab to not only pay its employees but also partially pay at least some of its suppliers. it looks like there's a small lifeline, but a lifeline nonetheless for saab. saab is in talks to raise longer term finishing. it could be a change of ownership. it became -- it was owned by the dutch car company speicher, known as the swedish automobile. bought it from g.m. for $400 million last year. they're looking for a buyer, but major financial crunch going on at saab.
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it's got the lifeline, $18.5 million. we'll see where the story goes from here, of course. now, saudi arabia is steaming into a new era as it looks to diversify its oil-dependent economy. you're looking at pictures of the first mega container to arrive at the jeda islamic port, just one part of a huge infrastructure spending plan. aside from diversification comes saudi-ization. providing more opportunities for youth has become an increasing priority. jim bolden went to find out how foreign companies are helping saudi arabia meet that challenge. ♪ >> reporter: it's not often korean drums rumble into the saudi arabian night air. korean giant samsung is opening its new $100 million engineering training park in eastern saudi arabia. saudi arabia's petrol chemical
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region is one of the samsung engineer's biggest markets. >> are you our partner. >> reporter: samsung's new engineering center is one big way the company will increase the number of saudis it hires. and therefore, bring in fewer koreans and indians. >> at this time, saudi engineers is only 180s, this is only 20% of our work force. i thinkings that not enough -- i think that's not enough. we have to recruit more and train them and show our experience. >> reporter: six years ago, the saudi government initiated so-called saudi-ization, a push for private firms to hire more of the growing number of recent graduates and, therefore, reduce the unemployment rate. given all the unrest in the middle east, had t now has a new impetus. the process of saudi-ization is
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more than just getting foreign companies to hire local workers. it's about getting local companies to hire local workers and to get the expertise to compete for very big and very complicated contracts. mis makes massive towers for the gas industry. some top out at 100 meters and 1,500 tons. the goal here is to take the work force from 20% saudi to 60% in five years. and it's not just it graduates from universities. >> we have developed an in-house training program for training welders, electricians, machinists, to -- to be able to create more opportunities for the young saudis. in addition to the programs that we have with universities, with technical colleges here in the eastern provinces. >> reporter: u.s. construction and engineering firm bechtel has been in eastern saudi arabia for 35 years and already has a frog train saudi engineers. >> it's turning out very well.
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unfortunately, some of these young engineers after finishing the two-year program go and work for the likes of sibec or oranco. i think at it that we've benefited the kingdom, we've done our moral obligation. >> reporter: foreign workers have been encouraged for decades to come here to work while saudis enjoy the oil boom. now it might impose a color-coded system to highlight firms that don't hire enough saudis. if the new rules are put into place, then the company like samsung may get a green light. those that don't meet the new rules could get a yellow light or, indeed, a red light. they would find doing business in saudi arabia extremely restricted. jim bolden for marketplace middle east, industrial city saudi arabia. okay. let's have a quick look at the stock markets now. nearly two hours into the trading week in europe, we've seen a great deal of wavering
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around. actually the picture hasn't changed that much in the last 20 minutes or so. very scant gains for the london ftse and scant losses for the paris acc, a loss, .5%, the chemical sector coming under pressure after reports from nobel, chemical pressure. >> sounds interesting. we had a broadly down day on the markets in asia pacific, as well. that's how the markets have ended, the trading has come to a close. only shanghai up, continuing a tailwind from those comments from the premier wen jiabao about inflation last week. that's it for this edition of "world business today." i'm andrew stevens in hong kong. >> i'm charles hodson in london. join us for the next edition of "world business today" just four hours from now.
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