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tv   World Business Today  CNN  October 11, 2011 4:00am-5:00am EDT

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[ cheers and applause ] >> thank you very much. here are the headlines. myanmar's state television announced the government will release more than 6,000 prisoners starting wednesday. the announcement comes hours after the government's human rights panel said that anyone who does not threaten state stability should be released. the release of myanmar's political prisoners has long been a demand of western nations. new zealand says the oil spill off its island is the worst maritime disaster.
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oil is gushing from the container tank rena which ran aground on wednesday. the man who some call the merchant of death is facing trial in new york this week. suspected russian arms dealer ric viktor bout has been accused of transporting arms around the world. bout has pled not guilty. the iranian government sentenced an actress to a year behind bars and 90 lash force her role in this film "my tehran for sale." the film criticizes the islamic republic for limiting artistic expression. those are the headlines from cnn, the world's news leader. "world business today" starts right now.
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good morning from cnn london, i'm charts hodson. >> good afternoon, from cnn hong kong, i'm andrew stevens. you are watching "world business today." the top stories this tuesday, october 11th. beijing steps in to buy chinese banking stocks. just how much trouble are the banks facing? we are joined live from the nation's capital. rising floodwaters in thailand take their toll on the economy and -- ♪ >> this man has a very important job. he gives his stamp of approval to bagpipes sold around the world. >> we visit one of the world's top bagpipe exporters. let's get straight to the stock markets now. here in europe they have been trading for a little over an hour. after four days of gains, this is where they stand at the
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moment. any positive sentiment appears to have disappeared or had the edge taken off on a bit of profit taking, it would seem. this after the -- obviously a couple of pieces of news in the middle of monday's session, eu leaders delayed a debt crisis summit, partly because of the need to sort out what's happening in the sovereign debt crisis. the main issue is the tension on slovakia today, as the parliament in that country votes on whether to agree to changes to the eurozone rescue fund. andrew? in asia, markets rallying on tuesday led by banks and exporters. the asian markets have been performing strongly over the past few days, trading days. the nikkei up by 2%. hong kong up by 2.5%. shanghai also up. the s&p and australia also making gains. going back to october 5th, hong
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kong is up by 12%. australia 9%. gives you an idea of the rally going on in the hopes of there will be closure in europe, a positive closure i mean there. the big catalyst coming from china. that's what boosted the bank stocks which traded here in hong kong. significant gains, that after the chinese government announced it will boost its stake in china's largest lender. they went into the market to buy chinese banking to. ag bank up nearly 13%. all four banks you're looking at there getting a healthy pop after news came out that the beijing authorities were in the market buying those stocks. let's get more on the government's decision to increase its stake in china's big four stocks. eunice, the last time we saw the government in beijing was four
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years ago. why are they doing it again? >> reporter: authorities are trying to shore up confidence. there are concerns about the economy and potential for default at the banks as the economy slows down. so because of that the government is buying up shares of the big banks. it's having a positive impact on the share prices today, but the big question is just how much of an impact this will have longer term. because back in 2008 the government had made a similar move by intervening during the financial crisis, a lot of people at that time said the moves were quite successful. but at the same time, the government had already announced massive stimulus plans. and that's the big difference this time around. the government really is much more limited in its ability to simulate the economy and so because of that people are saying the high inflation rate as well as the concerns about high debt and the overcapacity is really limiting what the
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government can do. andrew? >> okay. high inflation. you mentioned slower economic growth, talk that there could be a hard landing for china's economy. is it clear just how much trouble the banks, these big banks are in this time around? >> no. unfortunately that's a really big problem. people are not sure -- and they're really losing trust in a lot of the data points as well as the corporate earnings they're hearing from china. a lot of people have been saying they're concerned about the accounting fraud problems that some other chinese companies have been having. also investors have been losing trust because of this credibility problem with government statistics, which has been an ongoing problem, but it's come more into focus because of all the jittery market concerns. most of the people i spoke to, banking analysts and economists, do say for the most part
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concerns are overblown. they believe the economy is growing at a good clip, probably 9%. and also that the banks are on a whole in a relatively better financial position than the rest of the institutions in the world, like europe. >> at least that's some relief, relatively speaking if we see what the u.s. and the uk banks have been through. eunice yune, thank you for that. there is a lot of unease in china's banking problem about the problem that lenders are facing including nonperforming loans no where near the levels of the u.s. and uk, but they are a concern. this is what the chairman of the china construction bank told me a few weeks ago. >> i know our bank very well. we know the quality of the loans. and we know the structure of our
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loans, so we are very confident in that. if you ask me about other banks, that's another story. how do you say it? but generally speaking, after this very huge increase in lendi lending, the economic package the last two, three years, i think the nonperformance ratio may come back a little bit. >> so the nonperforming loan ratio coming back a little bit. even though that npo ratio is still small by western standards, it's an issue getting increasing attention in china. >> well, let's move on to europe. thanks, andrew for that. moving on to europe, europe
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pledged to try to sure up its banks was music to wall street's ears. with that and investors looking to the start of the third quarter earnings season, the dow soared 330 points, nearly 3% by the close. the nasdaq up by 3.5%. and the mid caps did relatively better than the blue chips, up by 3.4% for the standard & poor's 500. in terms of where we're moving for later today, for tuesday's session, we do, however look again rather in lockstep with europe. we do seem to be looking at slight losses there, off by a third -- i suppose in the case of the s&p 500, after that big run up on monday we're looking at losses of about half a percent. this is just the futures action at the moment. premarket action. also it's going to be interesting today because earnings season gets underway in
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the u.s. today. investors will be keenly watching alcoa's results when they come in after the close on wall street. alcoa, of course traditionally kicks off earnings season in the u.s. later we will hear from alcoa's ceo, claus kleinfield about his outlook for the u.s. economy. >> china makes up about 40% of the demand, global aluminum demand. it's been growing about 20% last year, most likely growing 15% this year. global growth will be 12% this year. but china so far has been self sufficient. so they are pretty much producing what they're consuming. in our industry we have a situation, china is not the natural place for the aluminum industry as a production place, because you need a lot of energy as a resource. one of the big questions is with the five-year plan what will change in our industry? is china going to go more
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outside and invest with companies or -- >> he thinks the u.s. can avoid a recession, that in about 20 minutes from now. stay with us. [ male announcer ] for sore muscles use new bengay cold therapy, it's pro-cool technology releases armies of snowmen masseuse who cuddle up with your soreness and give out polar bear hugs. technology. [ male announcer ] new bengay cold therapy. the same technology used by physical therapists. go to bengay.com for a $3 coupon. there's no time like the present to consider all your health insurance options. does medicare alone meet your needs?
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let's have a look at the price of crude, edging back a bit, off by just under 40 cents, $85 a barrel for nymex crude. welcome back. from cnn hong kong and london, this is "world business today." in thailand, the death toll continues to rise as floodwaters approach bangkok. at least 476 people have reported to have been killed in thailand and cambodia amid flooding caused by heavy monsoon rains which began at the end of july. with more bad weather on the
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way, a dire situation could be made worse. look at this map. you see here these blue areas in thailand. that shows you the parts of the country that are most effected by the flooding. cambodia is to the southeast here, in thailand about 8 million people are believed to be feeling the effects of the flooding, and that's so far. as you might have expected, it's having a big impact across the country. let's give you some stats. according to a report by hsbc, already some 700,000 homes have been destroyed. floodwaters are advancing thwarts bangkok. on monday, the prime minister ordered flooding to protect the capital. as is so much the case, the rural areas are feeling the brunt of this the report estimates 3.4 million hectares
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of farmland have been inundated by the floodwaters. it's not just that. manufacturing is also taking a hit. look at that. in utia province, 200 factories are reportedly damaged by flooding. honda told cnn it halted prod t production at its plant in thailand on october 4th and it will stay closed until at least tomorrow. and that could effect production of 10,000 vehicles, parts suppliers, too are also being effected. the cumulative impact on the economy, so far it looks like this. hsbc estimates thailand's fourth quarter gdp could fall by one percentage point down to 3.9%. and the thai finance ministry cut its growth forecast for the year on the back of the floods. it reduced that forecast from 4%
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down to 3.7. remember, charles, it looks like there's more to come on this. >> yeah. i mean, gdp clearly growing fast, 3.9% in one quarter if that's what the statistics are saying, unless that's year on year. why is gdp taking such a hit? surely it's not just the factories being shut down, because presumably they will open within ten days or so. >> absolutely right. it's not just the manufacturing sector taking a hit. the thai farming industry is also taking a hit. about 1.5 million hectares of paddy feels have been destroyed, and 1 million hectares are at risk. thailand is the world's biggest exporter of rice. you can see why that might hurt gdp and the farmers themselves. look at this chart. this gives you an idea how much production is going on. these are the top ten rice exporters in the world, according to hsbc. the top five include pakistan,
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u.s., india and vietnam. but quite some distance ahead is thailand. the u.s. department of agriculture says that thailand exported about 10 million metric tons of rice in 2010. according to hsbc's latest figures, the country slashed its harvest forecast by 26%, from 26 million tons to 21 million tons that could effect the price of rice. the price of rice was up almost 7.5% between march and august. that's well ahead of other food stuffs. with this latest flooding, it could set to rise further. so all in all, the impact on thailand or the impact of the floods on thailand is not limited by the looks of it just to the country, but also it could ricochet around the world in the form of food price inflation. we'll be watching this one closely.
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>> that's the last thing we need for this one is food price inflation that would definitely be devilish in terms of its consequences for everyone. let's have a check in and see what the weather outlook for thailand is. our meteorologist jennifer delgado is at the cnn weather center. good morning, jen. good morning, charles. it's not just thailand suffering. we are also talking about cambodia, vietnam, many of these areas in southeast parts of asia dealing with widespread flooding and a lot of it has to do with a la nina starting to take hold again and it's shifting some of that moisture over towards the southwest. talk a bit more about for bangkok. for the year to date, we've had nearly 1200 millimeters of rainfall. that's year to date. typically you can see for -- since january 1st, it should be around 1,200, and we've had 1,900. that's about 58% above average. again, the rain has been coming
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down. over the last 24 hours things have settled down briefly for thailand. with that southeast monsoon moisture out there, it's still going to be heavy at times. over the last several hours, you are seeing storms flair up over vietnam, laos and cambodia. so rain is in the forecast. they will need a break for several weeks to see improvement with water levels going back down, but for bangkok we will keep rain in the forecast. we could see potentially another 10 to 15 centimeters of precipitation. as we go to more photos to give you an idea of how bad the situation is. people walking through streets if they're lucky. other people are getting around through boats. this is the mode of transportation through many areas, and this is because so many streets, as andrew mentioned, 700,000 homes damaged, and the problem is many of those areas in the yurural
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areas have not been counted. as i take you over another big story, it's hurricane jova, spinning 200 kilometers offshore of mexico. it is working into port porto vallarta. hurricane jova will make landfall this afternoon and evening. winds 193 kilometers this is a major hurricane and likely to stay a major hurricane as it makes landfall today. winds, 193 kph, then it will weaken into a tropical storm. but we are talking potentially six to 12 inches of rainfall and this will lead to problems of mud slides across the mountainous region, from manzanillo all the way over towards the west of puert puerto vallarta. it looks like the problem will be a great one for parts of the
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philippines as well. we have a tropical depression there bringing heavy rainfall through southern and central parts of the philippines and this will cause more flooding across areas there as well as we go through the next couple of days. likely to become a tropical storm later today or tomorrow. charles? >> jennifer delgado, thank you very much. we'll watch out for that one as well. >> a lot out there. >> indeed. definitely. a lot of suffering, i fear ahead in southeast asia and mexico. many thanks to you. andrew? charles, they're tough times on and off the court. america's top basketball lead is warming the bench in a labor and money dispute between team owners and players. coming up, why the cancellation of the season's first two weeks is having a financial ripple effect on many businesses. and paper trading. free practice trading that helps me hone my technique. complex options. and free tutorials. online or in person. can a trading site really make a difference? if it can't, why are you trading there?
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quick look now at the currency markets, that's the snapshot at the moment. the euro 1.36. everything else looking stable. welcome back. you're watching "world business today." you're live on cnn. a contentious labor dispute prompted america's top basketball league to cancel the first two weeks of its season. the nba locked out its players over a dispute over revenue sharing, minimum salaries and other issues. the league says many team owners are losing money, but as mark mckay reports, they're not the only ones who stand to lose. >> reporter: philips arena is
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home to the nba's atlanta hawks, but these doors won't be opening any time soon. the league's decision to cancel some regular season games made sure of that but that decision doesn't just impact team owners and players, it effects surrounding businesses. >> there will be a decrease in business on what would have been home games. we usually get a nice pop two hours before the game, depending on how they do some after-game business. >> we always try to make sure we have a good showing of conventioneers to come to the restaurant. but as far as filling the void from philliips arena, our hands are tied. >> reporter: the nba just completed one of its most successful season in years. attendan attendance, merchandise sales and revenue were up but that could now disappear. >> these two sides should be sitting in a room for the next two weeks, however long it gets
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done, but right now they seem content not to negotiate and not meet and let this thing play out and see who blinks first. >> reporter: the cost for this waiting game will be expensive. david stern said the league lost $200 million by canceling the preseason. if a significant amount of regular season games are lost as well, the league will find itself having to satisfy broadcast partners who paid billions to televise those games. >> the nba has to make good with tv partners. they won't continue to pay for no games it has an effect on the tv partners because they use nba games which are strong ratings drivers for, say, a tnt. they're strong ratings drivers, that boosts ratings for other programs. >> reporter: players won't feel the financial sting until november, when they would normally start collecting paychecks. that said, some like the spurs tony parker have decided to play
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overseas. >> guys like kobe bryant, lebron james, kevin garnett, if they want to play in europe, there's going to be a deal for them to play in europe. these european teams wanted them to build up attendance. the euro leagues are in training camp. they already started their season. a lot of the fringe nba guys, they might have been able to get jobs in july and august will find themselves completely out in the cold. >> reporter: fans will also be left out in the cold. >> you will lose fans to other sports, especially college basketball could be something on the rise. >> there may be an initial hit, initially i think the fans will come back. >> nfl football is on. we still have the baseball playoffs, european football. so there's plenty to occupy our time. they can't sort it out, shame on them. >> reporter: it took time for the nba to get to this point. it appears it will take more time and plenty of patience on the part of the fans for the
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league's feuding sides to work through their labor differences.
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from cnn london, i'm charles hodson. >> i'm andrew stevens. welcome back. you're watching "world business today." let's look at the european stock markets. we are 92 minutes into the trading day, we are seeing quite a bit of money coming off the table. losses of around two-thirds of a percent, both in london and frankfurt. nearly 1% for the paris cac, but
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half a percent for the zurich smi. attention is turning to the slovak parliament where they are debating whether to agree to changes in the eurozone's rescue fund. and we expect a vote on that at around 7:00 a.m. u.s. time. andrew? >> that's going to be a big vote, isn't it? because all 17 eurozone members have to approve the package to push this forward to try to bring the debt crisis under control. in asia, stocks rallying on tuesday, led by banks and exporters. a strong rally it was. the hang seng up by 2.4%. since october 5th, would you believe it's up by more than 10% on the hopes of europe and a large selloff in hong kong.
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the nikkei up about 4% over the past week. another 2% rise today. australia up by almost 2% by october 5th. shanghai not moving much today, but all the action was in china after the chinese -- beijing moves into the stock market and started buying stocks. they are all listed here in hong kong, so a lot of upward movement in the chinese banks here. agricultural bank up more than 12%, for example. ccb, up by some 7%. that's certainly underpinning the big move here today in hong kong. it also raises questions just about what is going on with the chinese banks and how solid they are. the government said it was a confidence-boosting measure, though there are concerns about the level of debt and how banks are dealing with this pull back in credit. charles? >> of course there's a lot going on, isn't there? let's look at the united states
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stock futures. still sluggish. possible losses, the same sort of pattern, i suspect, as europe. that extends backwards to monday when the bulls were on a stampede. karina huber has our wrap-up. >> reporter: a big rally to kick off the week on wall street. news that german and french leaders reached a plan to solve the european debt crisis by the end of the month helped stocks surge. financial shares let the rally with most of the major banks closing higher by 6% or more. investors are hopeful a concrete plan will deal away with the uncertainty plaguing the market. the dow rose to 11,433. the nasdaq and s&p 500 each added 3.5%. and netflix shares closed lower by almost 5% after spiking earlier in the session. the company announced a plan it is dropping a plan for its dvd
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by mail service while price hikes will remain in effect. last month netflix said it would put its dvd mail service under the qwikster name. alcoa is slated to post its quarterly results after the close. the company's release is seen as the unofficial kickoff of corporate earnings season. that's the day on wall street. as karina said, it is the beginning of earnings season in the u.s. alcoa traditionally kicks off the event. its quarterly results coming after the close of the markets today. many expect a rise, but thing mace not be so rosy going forward as the price of aluminum has softened. i spoke to the company's ceo,
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cla klaus kleinfield, and i asked him how important china is to alcoa. >> china makes up about 40% of the demand, global aluminum demand. it's been growing about 21% last year, will most likely grow 15% this year. the global growth will be around 12% this year. but china so far has been self-sufficient. in our industry we have a situation where china is not the natural place for the aluminum industry as a production place because you need a lot of energy. so one of the questions with the five-year plan what will change in our industry? is china going to go more outside and invest with companies, or own their own, in opportunities that are outside? >> you spoke about 12% growth for the global aluminum demand. china is much more than that.
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i suspect the u.s. is much less than that? >> that's correct. >> what is it? >> we believe the u.s. will be around 6% that year. does that mean then that basically for companies like alcoa and other fortune 500 companies, that china will be the difference between profits and breaking even? >> not necessarily. our business model is not built necessarily around saying, okay, china will increase the import or is going to increase the fabricator products. because there's too much of uncertainly around that. so our strategy is based on this as an upside but we are on a good path also without that fundamental strategic change going to happen. >> is the u.s. happen such a key part of alcoa, is it going to stay out of recession this year, do you think? >> i'm more optimistic. if you look at the industries that are critically important for us, we see clearly on the
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very top positive ones is the aerospace industry. they have a backlog of six, seven years. they will be a stable driver going forward. automotive industry, if we look at recent numbers, has not been bad at all. those are big ones. packaging industry pretty stable. the big question is -- i mean how much of the recent discussions have led to a destruction of confidence that will eventually have an impact from the side of the consumer as well as everybody investing. >> would have to say there's a strong chance it could have a big impact. >> it could potentially have a big impact. most of the think tanks have taken the projections for u.s. growth down, which i agree with. there's another question of is it going to be, let's say, a
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1.5%, 1% to 1.5% growth in the u.s.? or are we really going technically into something that is called a recession? i would put that as a unlikely scenario. is it possible if we continue to destroy more confidence? absolutel absolutely. >> klaus kleinfield there, the ceo of alcoa. results are out later this day. charles? now, two sensational legal cases are grabbing plenty of attention on both sides of the atlantic. in new york, a man referred to often as the merchant of death. we'll explain the explosive charges. and in london, it's one billionaire against another in a lawsuit that's providing a rare look inside the sometimes, only sometimes, i think usually murky world of russian business. 'cause without the fans, there'd be no nascar. just like if it weren't for customers, there'd be no nationwide.
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vladimir putin arrives in beijing today. the beginning of two-day tour. the main topic is a $1 trillion gas deal. if that deal is agreed, it would see russia supplying china with about 68 million cubic meters of gas every year. you're watching "world business today." a multibillion dollar showdown is underway in a london courtroom between two billionaires who worked together after the collapse of the soviet union. as matthew chance explains, the legal battle is giving the public and investors a rare look inside the sometimes shadowy world of russian business. >> reporter: he's one of the world's richest men mired in a multibillion dollar court battle. roman abramovich is saying nothing. mr. abramovich, why do you believe your former friend is doing this to you? do you think the british legal
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system will protect your wealth from this action? the billionaire soccer club owner is facing huge financial claims from a rival russian tycoon, who says he was betrayed. boris berezovsky says he helped abramovich build his business empire. and wants more than $5 billion from the man he says he once treated as his own son. >> you think you'll win this litigation? >> of course. >> reporter: the case here at the high court focuses on the lawless, post soviet 1990s in russia, when berezovsky was a key power broker, and abramovich an emerging player in the oil industry. technically it's about whether or not the two had a verbal contract. but why it's fascinating is that it's casting unprecedented light on the murky world of russian business. sibnef it was the name of the oil company berezovsky said he
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helped abramovich create out of state assets in exchange for shares. when berezovsky fell out of favor, he said he was forced to sell those shares to abramovich for a fraction of their value. abramovich, who eventually sold sibnef for $12 billion denies any such deal saying he paid berezovsky $1.2 billion, not for shares, but for political protection when he was a kremlin insider. it is an astonishing admission in a case where the usually hidden, corrupt workings of post-soviet russia are getting a rare public airing. matthew chance, cnn, london. certainly difficult to get a seat in that courtroom. in the u.s. now, prosecutors are set to make their case on tuesday against this man, the man, did they call the merchant of death. the russian businessman, viktor bout, faces a host of charges that he denies.
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as richard roth reports, investigators say he may be responsible for fueling an almost endless number of conflicts. >> reporter: it has been three years since viktor bout was arrested in bangkok. >> do you have anything to say about the charges? >> reporter: at his capture, global law enforcement made sure bout's notorious nickname was remembered. >> mr. bout has been referred to as the merchant of death and man of war. >> reporter: international investigators have long accused bout of fueling wars from africa to afghanistan. >> viktor bout is one of the most prolific arms traffickers in the world. >> reporter: now after a long extradition battle, bout goes on trial in new york. >> the charges against him, just capture a small sliver of trying to sell weapons to a designated terrorist organization, the farc rebels. >> reporter: bout is accused of trying to kill americans by
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selling arms to farc rebels in plainclothes. bout's attorney said i'm very confident that the trial will make it transparent that viktor bout did not try to sell arms to anyone. he was the story behind "man of w war." the federal judge has already expressed concern over bout's notoriety, wondering if juror also simply google bout's name. a former soviet union air force officer, bout insisted to jill doherty in moscow a few years ago that he wasn't hiding from anybody. >> i'm not afraid of anyone. why should i be afraid? this whole story looks to be a witch hunt. >> reporter: arms control agents say viktor bout took --
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>> he is the face of arms trafficking. >> reporter: bout's lawyer said no book or article has any evidence of him selling or transporting arms. however the man who wrote the boom called "merchant of death" said no verdict can change bout's conflicts around the world. >> he made some of the wars in the early 21st century much worse than they would have been. >> reporter: bout faces life in prison if convicted. richard roth, cnn, new york. you heard about the salesman who reckons he can sell ice to the eskimos, but what selling bagpipes to the scottish? it's not as farfetched as you might think. an aarp...ould consider medicare supplement insurance plan... insured by unitedhealthcare insurance company. all medicare supplement insurance plans can help pay... some of what medicare doesn't, so you could save... thousands of dollars in out-of-pocket expenses. call now for this free information kit and medicare guide.
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here's some of the other stories making headlines in europe. news corp. is facing increasing pressure to make executive changes to its board. shareholders have been urged to vote against the readmission of several news corp chairmen. iceland has invited tourists to stay in peoples homes. the country's president wants people to experience the real iceland and has invited visit near his own house. the iceland president said
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interested tourists can stop by for pancakes, whipped cream and rhubarb jam. it's an impressive house. i've been. there great bird watching to there as well. >> i shall remember that when i go for my rhubarb and ice cream. staying with tourism, japan has come up with a novel idea to boost tourism in its country. when you see pictures like this, which is what most people see now of japan this is the aftermath of the tsunami, you can see why they want to boost tourism. and how they're doing it? they'll make it free. the japanese government is offering 10,000 free flights to foreigners to travel there next year. visitor arrivals in the country plunged 3% year on year after the tsunami in march. interested travelers can apply online for those tickets. let's turn our attention to howard schultz, the boss of starbucks, and that's in talk to expand its coffee franchise in india. many say the company is weeks
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away from inking a deal with tata in india it also plans to triple the number of outlets it has in china by 2015. >> now just depending on your point of view, the bagpipe is either a magic instrument or a little more than high-pitched irritation. they are usually -- mainly scottish, but celtic really, anywhere in northwest europe. well, actually not always. ♪ >> reporter: mohamed arif has a very important job. he is the man who gives the stamp of approval to bagpipes sold around the world. good pipe? >> yes. >> reporter: every month mohamed said he test about 1,000 bagpipes in this factory in one of the top exporters of bagpipes in the world.
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but this may surprise you -- this is not scotland this is pakistan. pakistan is one of the top exporters of bagpipes? >> yes. all over the world, the bagpipes are being exported. >> reporter: legend has it they started making bagpipes here during the 1920s as scottish businessmen came to town and set up a factory. more than a decade later, there's more than a dozen bagpipe factories. do you make them as good as the scottish do? yes, he can do make to scottish standard. >> reporter: manufacturers started making other specialty items, including ones that are staples of american culture -- like vintage american footballs. vintage american basketballs. and here's something that will surprise some americans, replica civil war uniforms made in pakistan. do you think people in america
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were playing with a vintage american football, do you think they know it was made in pakistan? >> if they don't know, they should know it. >> reporter: today the town manufacturers hundreds of items, nike, adidas, they make their footballs or soccer balls here. dozens of musical instruments and even surgical equipment all made here. >> we are doing about $1.4 billion export from this small city. >> reporter: obviously pakistan has been in the headlines recently because of militant attacks and extremism, a lot of investors have stayed away because of security concerns, but some say sialkot is a perfect example of why it pays to do business here. plenty of space, raw materials are cheap and so is labor. is there anything you can't make? >> only -- we can't make atom
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bomb. >> reporter: that's not such a bad thing. >> i suspect they can make dudgeridoos, though. that's this edition of "world business today." thank you very much for joining us. i'm andrew stevens in hong kong. >> i'm charles hodson in london. good-bye for now. where there's magic. and you now understand what nature's been hiding. ♪ at dow we understand the difference between innovation and invention. invention is important. it's the beginning. it's the spark. but innovation is where we actually create value for dow, for society, and for the world. ♪ at dow, we're constantly searching for how to use our fundamental knowledge of chemistry to solve these difficult problems. science is definitive. there is a right answer out there. [ male announcer ] the same 117 elements
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