>>this week on world business... >>a risky business; the insurance market in china is booming, but for foreign firms investment is far from a safe bet. >>foreign firms with a very tiny market share should grow much, much more. this is not the case >>the cleanup costs are huge and the economic and environmental effects are still adding up... we look at the long term impact of the deepwater horizon oil spill. >>i think its gonna take 8, 9, 10 years before we get back to where we were.

>>hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. in the nine years since china entered the world trade organisation, its insurance industry has developed fast: from only 30 licensed companies in 2001 to 115 today. over a third these are either wholly owned or strongly backed by foreign insurance brands. but with no level playing field and limitations on what they can sell, these investors arebeing left behind in the race for market share. >>reporter: in august alone, another 1.2 million cars jostled for space on china's roads... a 55 percent year-on-year increase. the same month, new property sales were up 9.3 percent on 2009; while in shanghai, cargo throughput hit new records with the port handling 2.6 million containers.

>>mackie: premium income in the first half of 2010 topped 18 billion us dollars... up over 33 percent on 2009.and there's plenty of room for growth as market penetration is still under 3 percent of gdp. >>reporter: of the country's 115 insurance players, over 40 are foreign owned or foreign funded. most entered the market in the five years after china joined the wto. for jackson tang, who heads liberty mutual's operation here, this nation represents a vital engine for growth. >>tang: you know china is now the sixth largest insurance market in the world. and china economy has just overtaken japan as the second largest world economy. so by that, the huge market has so much attraction while other insurance markets in the world are almost saturated. where do you grow your business as an international insurance group? >>reporter: but foreign insurers face regulatory barriers, slow

licensing procedures and limitations on business scope that don't apply to domestic firms that include ping an and, now, the world's biggest life insurance group, china life. as the european union bemoans, foreign providers here may be growing, but their ambitions in china's marketplace are stifled. >>quintana: when you're starting from a very low base, you are expected to grow much more than the average of the market. the average of the market is 30 percent growth per year. foreign firms with a very tiny market share should grow much, much more. this is not the case. >>reporter: and the market share for foreign life insurance companies has even waned since 2007 to under 5 percent; while foreign non-life property and casualty firms can't break the two percent ceiling. >>reporter: for liberty insurance... a non-life business that mainly writes auto cover, it took six years from opening its chongqing head office to secure approval for two

other branches... first, here in beijing and, recently, in hangzhou. >>tang: that really slows down the development of any insurance company. and to give you an example, a localinsurance company can apply for 10, 15, 20 provincial new branches after they open up. but we, it would take an average of about 18 months to have one branch. >>reporter: so while jackson tang believes china is the place to be - to increase his footprint in this market, he's got his work cut-out. and especially because he's faced with another barrier to business that's actually written-into china's wto agreement... a prohibition on foreigners selling compulsory insurance products >>tang: we cannot write the auto mandatory third party liability insurance. that means, if we write an auto customer, we could only provide fiscal damage.

>>reporter: so, to sell the non-mandatory, fully comprehensive insurance element, he must compete with domestic companies that can provide total cover. with 70 percent of non-life business "auto insurance", both the eu and the us want the wto deal changed. >>reporter: and there's more. foreign life insurance companies must have a local partner and cannot hold a majority stake in the joint venture. plus, only one partnership is permitted, which is a big problem if relations sour. >>quintana: if you pick up the wrong partner at the beginning then you have only one solution which is divorce and then look for another one! you can't just kind of supplement that partnership with another one which you hope will be better. >>reporter: with only a handful of foreign players making profits, some are now re-thinking their china strategies and retreating from the market. >>mackie: faced with barriers, strong domestic competitors and now, the growing number of banks licensed as insurers, foreign

companies are lobbying for a more relaxed and transparent regulatory environment. inthe meantime, it's down to sound marketing... and getting a name for delivering better service. >>reporter: for liberty insurance, this mes having mcdonald style drive-ins where small clai of up to 150 dlars are paid out in cash, with no argument. e fio of , n dent om t bar if eye hak. ng8 for foreign

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of porter: locas ousein losiana seafood ughout the cr it's really a tter of us ft s bn ever and serthan ever beuse 're niri st so closely. >>pausina: we've done thousands and thousands of tests.yoow we d our testing programme may 9th. we test every week the whole e ffentypes of animals in the area... zero animals have been tainted or shown any ill effects. >>reporter: although any ill effects could take years to show up... >>overton: i'm cautiously optimistic that we won't see a lot of long rm won't know for several years. the cleanup has already cost bp over $9b and that figure rises me $90m day... but the company has pledged to stick around... and it must

of urgency among the workerswe saw on the beach >>utsler:te and we're here to ensure we make it right. >>reporter: although opinion about bp so far... is at best... mixed... >>blanchard: we don't find they've done nothing right. you know they've done eth >>voisin: post katrina... we had funds coming down from the federal government it took 3 and a half years to get into the fishing community. post deepwater horizon, 3 and a half week later we had fu the fishing community... >>chighizola: i'm afraid they'll just leave. takeoff, leave and just say... we something. >>reporter: but there is one point everyone living near this fupi cst agrees upon... >>speier: we're looking at something that could be multiple decades in length. >>utsler: stl t long way to go. anchd: i think it's gonna take 8, 9, 10 years before we get back to where we were.

>>reporter: and so the pain here will coin..onafter the visible signs of america's worst oil spill have gone... >>still to ce wld business... >>tall, green and very hot stuff: we check out the solar tower that could revoliose neblengy >>and archery may be an ancient sport but it is attracting new fans. wta aim at the world championships in scotland. >>on target... and the rest in just a mome owod bune... >>as countries around the world look to reduce their reliance on fossil fuels ... renewable energy is becoming an increasingly hot topic. and in southern lifornia a new technique is being tested that could

revolutionize solar power. >>reporter: withuninfomo of the year, southern california is best known for its beach lifestyle. >>reporter: but where the sun really shines is in california's deserts. it's a near perfect clatfosor er generation. ' >>barth: california dinelhave high potential for solar technology simply because we have a lot of sunshine. and then if you look at the solar intensity in southern california it's probably one thiesinnte country. >>reporter: and california doesn't just have a good meteorological climate, it has a favorable political climatetoo. in 2006 the state's solar inst w given a boost by a requirement that by 2020 electricityproviders must get a quarter of their energy from renewable sources. soon that number could increase to3 rct. this push has made it easier for solar tech companies to raise cash.

>>rogan: to date ol'said 70 in capital, that's from a combination of sources including venture backing but more recently our customers and strategic partners have also made investments. >>smith: we did a $140m b round raise it's what they called it in septeerf 08ha really fully funds our technology advancement and our project development activities through 2011. >>poer both these los angeles based companies are developing one of the hottest solar technologies around -concentrated solar power or csp. this next generation of solar technology uses thousands of mirrors, called heliostats, to reflect the sunlight to the top of a giant tower. sophisticated software allows the heliostats to track the sunlight as it moves. haison: you might not be able to hear this but there's a faint pulsating sound as these panels all move together about a degree a minute following the sun. they're just ordinary mirrors but line them all up and they reflect the power of 10,000 suns.

>>reporter: unlike photovoltaic technology - the power does not come from the pels themsees. the reflected light boils a liquid to create high-energy steam which then powers a traditional steam turbine to generate electricity just the way coal or gas would. and while the average coal fired power plant in the us can generate almost 700 megatts of elericity, it would take 14 of these towers and 200,000 mirrors to produce just 46 megawatts.this esolar power plant is the only commercially operating csp facility in north america but it's a precise model for more. rather than custom designing future sites, esolar plans to keep costs down by building the same thing over and over again. >>rogan: we use a template design, this keeps our overall system costs very low. the more we build the cheaper everything gets. by avoiding custom designed power plants we can tap into very, very large economies of scale in our manufacturing

and supply chain. so this is more like building a wind turbine farmthan it is a large scale power plant. >>reporter: but these new solar towers still haven't solved one of the major drawbacks of solar energy - when you lose the sun behind cloud or at night, you lose the energy. so far there's been no way of storingsolar power... until now. another southern california company, solarreserve, is also developing concentrated solar power. but what sets it apart is its potential to provide solar energy on demand. and the secret to that is salt. >>smith: the solarreserve technology is what we refer to as a molten salt power tower.if you use water in your cycle, water goes up to the top of the tower, similar looking tower, and it's heated up into steam. that steam then comes down the tower and really immediately needs to be put through a steam turbine to generate electricity so it's kind of a real time solar energy production. the difference with us is that we pump

our molten salt to the top of the tower, heat it up to a 1000 degrees, we can put it in a tank and store it and use it whenever we want. >>reporter: the technology was developed by rocketdyne, the same company responsible for the engines used in thespace program and the solar power system that runs the space station. the company has yet to build any facilities but when they do, it's unlikely anything will be quick with each facility capable of generating 200 megawatts of electricity. >>smith: the solarreserve projects are large-scale utility projects so you're talking a 6 to 700 million dollar capital cost, about a two to two and a half year construction process, would generate about 500 jobs in construction. >>reporter: with or without storage capacity, commercial orders for this next generation of solar energy are beginning to come in. >>rogan: we are bringing a technology to market and getting it deployed as rapidly as possible. we have plansin the future to expand into storage but right now we're finding that you know we can sell thousands of mw with this technology without storage incorporated.

>>reporter: esolar recently signed an agreement to build a series of plants over the next decade in china. with a total capacity of 2,000 megawatts, this is one of the largest renewable energy deals of its kind. >>but the question remains whether this technology can work on a large scale. >>barth: i think you can prove it on a small scale, you can prove it from analytical equations and all that but really the proof of the pudding is to actually get it out there on a large scale and see if it actually is economical. >>reporter: and with the cost of solar energy currently as much as 5 times higher than fossil fuel sources, it will need to be economical for this technology to keep on shining. >>this september edinburgh paid host to a an archery competition featuring the world's top 32 archers facing each other in a knockout world cup final. archery is an ancient sport and today is relatively unknown. but as those who drew a bow at the 'come and try' sessions held at the event

discovered,it might be staging a comeback. >>reporter: finding the target... the 2010 archery world cup proved a hit in its host city of edinburgh. 21-year-old american brady ellison took gold in the men's recurve bow event... an olympic discipline. ellison - who trains 40 to 50 hours a week... believes he could have a long as well as a bright future ahead of him. >>ellison: i'm young and in archery you can shoot forever. i mean, i have team mates that've made the olympics with me they are in their 50's so hopefully i'll be able to shoot for a long time and make a career out of it. >>reporter: ellison beat olympic gold medallist and four times world champion im dong hyun. fellow- korean yun ok hee won gold in the women's individual event, while her team mate ki bo bae took the bronze medal... all of them products of korea's particular focus on archery from a young age. >>dielen: in schools i'd say 10 to 20

kids which they bring in and train on a daily basis and then those kids - around 1000 kids in korea - out of those 1000 when they get to 18 years old they get recruited by what's called company teams. the company teams are professional teams, five archers per team, and there are around 300 of them. and from those 300 is like the national team so if you look here in the uk they have around 10 so the chances of having that number 1 archer are much higher in korea because of that system. >>reporter: while the korean archers couldn't reveal exactly how much they earn as professionals, the fact that a major korean car manufacturer feels the sport is worth sponsoring is an indication of its popularity there. the same cannot be said for the host country... but despite that british number one simon terry believes uk interest in the sport is growing. >>terry: you've just got to look around. you know the members are going up year on year and events like this brings it to people's mind you know ...

not just robin hood hero you can see how technical... especially the compound bow... how technical they can be. >>muriel: recurve archery has been an olympic sport since the 1972 olympic games - but world championships have been held since the early 1930's. it is the traditional form of the sport. unlike the compound bow, the recurve bow has no system of pulleys which allows the bow to be relaxed at full draw... which means the archer takes the strain. so how hard can it be to hit the target? >>reporter: well practice makes perfect... and so does funding. but that can be hard to come by. >>hunt: our governing body funds some of the trips for us to represent great britain but not all so as a compound archer i have to fund most things myself. >>reporter: the story is no different in russia where world champion and gold medal winner in the compound bow eventggles to find backers.

>>loginova: it's a pity but in russia sponsorship goes to the other sports like football or tennis. actually it is not so much business sponsoring the sport it is the russian federation that provides us with money. >>reporter: finding businesses to sponsor the sport is what its governing body fita is focused on. but archery can be a tough sell. >>dielen: the main difficulty is getting to the first step for us because ok they know about football they know about athletics but archery they don't know what it is. so for instance we have a director... the cfo of turkish airlines who is here and also the marketing director from longines who are two of oursponsors and when they see it they are enthusiastic they want to keep it because they see the potential from a marketing point of view >>reporter: not so enthusiastic that they were prepared to talk about their financial commitment to the sport. but longines' marketing

director did reveal each stage winner received a watch, and that the championof the men's event would take home a cheque from the company for around five thousand us dollars. the prize money for the world cup championships totalled 144-thousand dollars... the biggest prize money in the sport. >>turner: we are putting forward 70 thousand for the event. and again, it's all about building the profile andworking with the partners so obviously there is significant investment going in from edinburgh citycouncil and uk sport as well. >>reporter: that investment looked to be paying off as the citizens of edinburgh queued up to try their arm. over 450 people had a shot on the first day of the event, most of them new to the sport. 11 year old david lister however is a member of a club... and a huge fan. >>lister: it's different than any other sport. because i've always tried different sports but this one i just really like - my brother he played it before i did so i joined and i really do have good fun - and iknow all the people

there and i'm really good at it. >>reporter: with no age bar - and seemingly no handicap too great- it looks as if the ancient sport of archery might well have a long future ahead of it. >>that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.

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