this is the business briefing, i'm sally bundock. standing up to brussels. italy's government defends its big spending plans as another deadline looms in its showdown with the european union. the world's two biggest economies take their trade war to latin america. china hits back after the us secretary of state warns against beijing's involvement in developing economies. and on the markets: it isa it is a mixed start to the day. hong kong given a boost by a bounceback in shanghai. earlier today the markets were up 3.5%. the clock is ticking on another deadline in italy's budget showdown with the european commission. the eurozone‘s third—biggest economy has until noon in rome to respond to brussels's concerns that its budget for next year is unafforable. the populist government wants

to spend more to meet campaign pledges such as a lower retirement age, a basic income for the poor, and boosting infrastructure spending. italy plans to raise government spending by 2.7% compared to last year, something the commission is describing as serious non—compliance with the rules. the eu and imf both think it is unaffordable because italy already has a national debt of $2.6 trillion, which at more than 130% of the size of the economy means that greece is the only eu country with a higher debt burden. italy's government hopes it can shrink that number by growing the economy, but those hopes were dashed by the italian central bank on friday. it said it expects growth forjuly to september to be just 0.1%. and markets are worried, too. the amount italy pays to borrow money has surged over recent months,

and is now at its highest level in about five years. over the weekend, the italian government moved to reassure investors it wasn't thinking about leaving the eurozone to solve its problems. translation: as long as i remained leader of the 5—star movement, and as long as this government continues, there is no willingness now start to leave the eurozone or leave the european union. on the contrary. the next seven or eight months will be very important because from populations across europe there will be calls for changes to the rules regarding the functioning of the european institutions —— five star movement. nicola borri is an economics lecturer at luiss university, in rome, and joins us from there. nice to see you on the briefing. we keep following this sort of stand—off with brussels with regards

to italy's budget plans. but give us your take on to what extent these budget ideas will boost the italian economy. 50 budget ideas will boost the italian economy. so i think it is unlikely that this budget plan might boost the italian economy. in fact, this budget plan entails higher spending, especially for poor people, but it is extremely unclear if any of these reforms may increase italian growth. the italian economy is suffering from low productivity, for at least ten to 15 years, and nothing in this budget plan is trying to address this problem. on top of this, the world economy is clearly slowing down, so we are in a more negative scenario, and so i think the outcome for italian growth is definitely negative. so the outlook for the economy is negative, as we heard from the central bank as well, and they are on a collision course with

brussels. you don't believe that their budget plans will help boost their budget plans will help boost the italian economy. so given all of that, the outlook isn't good at all, is it? i agree, i don't think it is good at all. the italian economy is slowing down. we are assisting this clash between the italian government, italian institutions, and european institutions. so it looks like the italian government is just trying to gain domestic political support for the upcoming european elections. it is not really thinking long—term, and in the meantime, while financial markets are asking are you interested in our debt, our banks, ourfinancial institutions, that in the last years have bought a lot of italian debt, are have bought a lot of italian debt, a re clearly have bought a lot of italian debt, are clearly suffering. very soon they are going to stop passing higher interest rates and lower credit to our firms, and this will only slow down the economy more. credit to our firms, and this will

only slow down the economy morem the short term, the italian government has got until noon today to present its changes, if any, to the budget plans, in reaction to brussels. resume ugly they won't do that, so how do you see that stand—off being resolved 7 that, so how do you see that stand-off being resolved? so i think that the italian government will stick to the budget plan. maybe they will, let's say, be careful that if the economy slows down too much they might revise the plan. i think that is the maximum that i expect they are going to give to the european institutions. and as i was saying before, i think that actually that is their objective, finding some form of disagreement, of clash with european institutions. within italy there is some sense that european institutions are against italy, the italian economy. this is very much related to the problem of immigration. in the italian

government is thinking about the next european elections. they hope that the balance of power within european institutions might change in the next spring, and i think there might wait for that. we shall wait as well. thank you very much for joining wait as well. thank you very much forjoining us. there has been another angry exchange between the united states and china over trade. this time, beijing has hit back at the us secretary of state over his suggestion that chinese involvement in developing economies doesn't always help the local population. our asia business correspondent karishma vaswani is in singapore. nice to see you. so what is this latest twist? well, sally, if you needed any further evidence that the war between the us and china is not just a trade war, you really don't have to look any further. it looks like it is a war on all fronts, frankly. this time we are seeing strong words on chinese state media

criticising the us secretary of state, mike pompeo's, comments on social media. he said china is engaging in predatory economic activity, in reference to beijing's one road programme, and also chinese owned enterprises to operate transparently, and that there actions are designed to benefit the chinese government, not the country they are operating —— one belt, one road. he also warned countries that when beijing shows up with deals that seem perhaps too good to be true, it could often be the case that they in fact are too good to be true. so really a sense of the battle between the tee sides here. now, the chinese haven't lying down. they have hit back in both the china daily and the global times, state—run media, running editorials calling these comments wild, disrespectful and not based in truth

orfact. disrespectful and not based in truth or fact. but this war of words has some very real ramifications. remember, all of this is happening against the backdrop of the us and china still fighting over trade, and both sides i think are trying to show that they are going to win the battle. on the chinese side we have seen battle. on the chinese side we have seen officials come out with public displays of support for the economy, and that is what we are seeing in the us as well. but until they come to some sort of resolution, sally, this kind of war of words will very much continue. we shall watch this space. good to see you, thanks very much. two of the world's biggest engineering firms have signed contracts to help rebuild iraq's electricty grid. america's general electric has agreed a slightly bigger deal than germany's siemens, but both could be worth billions of dollars. iraq is trying to rebuild the country after years of conflict. however, the contracts with the incoming government are not yet binding. one of the world's biggest tobacco firms, philip morris,

has been accused of staggering hypocrisy over its new uk advert that urges smokers to quit. the tobacco giant says it is an important next step in its aim to ultimately stop selling cigarettes. but the charity cancer research said the firm was simply trying to promote its smoking alternatives, such as heated tobacco. fiat chrysler is expected to announce a $7 billion deal to sell its high—tech car parts unit, magneti marelli, later on monday. several uncoonfirmed reports suggest that japan's calsonic ka nsei will take control, in a deal that will make it a world leader for parts, including electronics and lighting. a sale would be the frst big change made by fiat‘s new chief executive, mike manley. and now, what is trending in the business news this morning? the financial times is reporting on the fallout from the murder of saudi journalist jamal khashoggi. it says riyadh is trying to salvage this week's big investment conference, despite many foreign business leaders pulling out. here in the uk, the head

of the biggest commercial tv channel, itv, has told the guardian it is the last chance to build a challenge to netflix. it is a familiar tale in many countries. talks with other uk broadcasters, including the bbc, to work together on a new streaming service haven't led anywhere, and carolyn mccall says time is running out. and don't forget, let is know what you are spotting online. use the hashtag #bbcthebriefing. but before we go, here are the markets: a brand—new trading week in asia, and a choppy session injapan. all eyes on earnings. the earnings season in tokyo really gets under way this week, so there will be lots

of companies in corporate japan revealing how they are doing this week. i will see you very soon. an investigation has begun after a ferry hit two yachts while trying to dock at cowes harbour on the isle of wight. the coastguard say no one was injured. duncan kennedy reports. ton ferry grounded in the heart of the busy harbour —— 4000 ton ferry. the red falcon had just collided with a number of yachts that were anchored here. one eyewitness spoke of hearing screams as the vessel hit the smaller birds in thick fog. ed

anderson was on the ferry at the time of the collision. i felt the boat go into reverse, and there was a clutch, i just boat go into reverse, and there was a clutch, ijust assumed that was asked. but the staff then came around and told all of us that we should go back up upstairs and relax, because we may be here a while. hit at least two yachts, thinking this one, called the great lag. one man who sailed on her says he can't believe what happened. lag. one man who sailed on her says he can't believe what happenedlj don't he can't believe what happened.” don't understand what happened. i understand it was very foggy, not all these boats have read art and navigation equipment and shark plotters. howard got to hit the boat, i have absolutely no idea. red funnel, the ferry operator, says the same vessel was involved in another collision in september. it is too early to speculate on the similarities in the last incident, but they both work based on restricted visibility and we are making changes to operating procedures to prevent any recurrence

of this. this is an incredibly busy shipping channel for both ferries and pleasure craft, and it is remarkable that no one was hurt in a series of collisions. the fact that one yacht was sunk will now be at the heart of the investigation that is already under way. the red falcon has tonight been towed for south hampton, ready for that investigation to begin. this is the briefing from bbc news. the latest headlines: australia's prime minister has delivered an apology to victims of child sex abuse, admitting that the state failed for decades to stop those crimes. the saudi foreign minister has described the killing ofjournalist jamal khashoggi as murder, blaming it on a rogue operation. and the british prime minister, theresa may, will tell mps

that the brexit deal is 95% done, after some in her party criticised the lack of progress at last week's european summit. now it's time to look at the stories that are making the headlines in the media across the world. we begin with turkey's daily sabah. it unpicks developments over the weekend in the jamal khashoggi case saying his murder is unravelling. here in the uk, its front page reports on the pressure facing the prime minister as unrest grows within her party over her handling of brexit. the front page of the financial times now, it looks at president trump pulling the us out of a nuclear treaty with russia and how moscow's warning of the dangers. the new york times with a different story about the trump administration, the paper believes there are plans to stop transgender people legally changing their gender making everyone's sex fixed at birth. and finally a story in the telegraph here in the uk, and how a taxi company plans to have self driving cabs on the streets of london within three years. with me is kulveer ranger,

vice president strategy & communication at atos. let's get stuck in. i don't know if you have read this paper before, but you have read this paper before, but you have read this paper before, but you have today. papers focusing on the big, shocking story from turkey about the journalist's murder.