>>this week on world business... >>as china'secent census shows, t one child policy has slowed population growth, but brought witht a whole new seofhalls. onic an cap- thbeen built e sef ut products, customs men.

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currt ilt onheapabour cheap labour - t vari -n fromhe economyhe success sty llrobably be ended. >>porter: with fewer woers, wage costs are rising, making china less its neighbours. it has to move awayrobeg mp the factory of the world, churning o ods. >>the future must be "develedn in with chinese designs and chinese patents -paesilstgg to compete. >>ej: fe tt an development is important and we need to do this step

byte wve beenforced to do this because profits fr bicrossg llow year by year. >>dr. deng: the option for china is to actually try of improving the quality of the human capital - meaning better education, better paid, y - so moving upin in the global commodity trade and production chain. this is the only way out for china. addressing this. 5 years ago this hi-tech zone was just rmndby2015 the government hopes it will t wlddi l production centre. >>the authorities moved many local colleges here anenuredecgits toelp design courses -so graduates can make a seamless

transition to the world of work. >>hongyuan: our college has co-operation projects with companies. students can work there on internships. i think it gd cae en students go on work expeen, it broadens our horizons and wecan learn a lot. >>reporter: the government too has learnt aotit car the one child policy, although successful, has serious flaws. soucsoheovnmt now looking to relax it. >>but if it does it will simply create even more young dendtsnt ts w generation can work. by then, after 20 more years of urbanisation, china will have a new problem - an empty anagg untryside; where will the food come from? >>dr. deng: it's a very, very ugchlee r china in the next 10, 20 or 30 years. now if you look at chinese food production, in fact the cost of food

producti icha hhe than the world average. this is the reason why so many chinese decide not to produce food - it's not worth it. >>reporter: today, china imports food - like soya, meat, even rice. and its appetite is increasing as it gets richer. ifheoury's numbers as well as its wealth continue to rise itay be a prsure the planet simply cannot handle. >>india's legal outsourcing industry has grown in rece ars from almost nothing to a mainstream part of the global business of law. with everyone from wall street bas to mining giants, insurance firms and multinationals looking to cut costs, hiring lawyers in india is now increasingly popular. >>reporter: welcome to the new level playing field. here in noida, a satellite city

of new delhi, these young lawyers are learning the nuances of american law. christopher wheeler used to be the assistant attorney-general r w rkta. w he manages the team of lawyers at pangea3, a legal outsourcing firm, to do thwork usually done by young lawyers in the west - at one-tenth of the cost.s >>wheeler: it either spells troublfothtritna law firms or it spells opportunity. it spells trouble to law firms run by dinosaurs who refuse to see that you cannot continue to bill your client 400 dollars an hour when it can be done as well and as securely by other people for a tiny fraction of th ct.ndt spells opportunity for the same people who see the value and see the savingsthat they can pass on to their clients, and the opportunity that will give them with their clients to do more and more work. >>reporterina'lel outsourcing industry is booming, as cash-conscious

companies in the west are hiring lawyers in india to review documents, conduct due diligence, and dft contracts. lpos, orlegal process outsourcing firms, have moved away from the traditional billing per hour model to billing per task. >>kamlani: historically in the legal services durywh lye are billing on an hourly basis,and telling you "i have no idea how long this is going to take", you never know how big your bill is gngo . you just know that you have a higher hourly bill rate. here we're not only dropping the cost by 90 per cent from what a law firm in the us mit ar, 'ral fixing for you upfront, how much time we think we're going to spend and what it will ultimately cost. >>reporterthnuer of legal outsourcing companies in india has mushroomed to more than 140 from just 45 years ago. a few kilometres away in noida is the office ofpalol.eadquartered on the island of jersey, the company uses talent from 4 continents to provide legal

seices to its international clients. >>sewell: india is absolutely crucial, it's central to our whole outsourcing effort. we acquired a business down here 4 years ago, and we've been developing and building that business out ov t crse of the last 4 years. we have over 800 people down here now, we plan to at least double that in the course of the next 2 years. so reallyt' the central backbone of our multi-shore offering. >>shmathadntes coming from india is the kind of talent available here, the kind of scalability that you can do, the number of lye y c he in short periods is not available anywhere else...what the onshore teams bring to the table is the missing technical nuance of spif market or a specific law. both of these combined together, present a very effective solution to the client. >>rert: tsrcg rm are able to offer low costs largely due to india's low wages and its big pool

of young, english-speaking lawyers. the country churns out 80,000 lal graduat every year, and since india's legal system is based on the british colonial system, they find it easy work for ients in the us and uk. >>chhajer: the indian legal system and us legal system, y read. they are very similar, the lawsare very similar and the structure is very similar >>reporter: meanwhile, indian law firms are watching the booming outsourcing industry from a distance. since lpos take up only foreign cases of foreign clients and practise no law in india, indian lawfirms don't see them as competition. but they do object to foreign law firms setting up shop here, as indian laers have a tough time getting work permits in the west. >>bhasin: we are getting a lot of work you see from the multinational companies directly, without the intervention of any foreign law firms. so who needs? it is essentially

because of the negative growth particularly in uk, that they want you see, to capture india - the legal profession - and china. these are the green pastures for them, you see. >>wheeler: it's not for me to say whether they should do it or not. i think that they'll suffer in the end. they're not going to get nearly the sort of experience, the global experience, the global deal-making experience that they would get, had they opened the markets. i think that they're concerned about justifiably perhaps about losing clients, losing revenue. but in the long run, having the markets open will give them so many more opportunities than they would have otherwise. >>reporter: india's legal sector could well present an attractive range of both high-value services and low-cost commoditised services. with outsourcing firms already seeing annual growth of over 50 percent, most plan to double their headcount within

the next two years. >>wheeler: as india's expertise grows, you saw a number of attorneys out on the floor. these young attorneys are very capable and they're hungry for work and what we're seeing is that the level of sophistication of the work that is given to us is increasing. >>sharma: i'm sure this momentum will continue, but it will not be long enough when law firms see this opportunity not actually as a threat, and start forming a tri-partite relationship. so, in future, you should see corporate, law firms and cpa forming a beautiful triangle, working together with each other. >>reporter: indian legal outsourcing firms are expected to see revenues hit 1 billion dollars by 2014. nevertheless, this remains less than 1 percent of the global law industry. clearly there's plentyof room for growth for legal suppliers here - both indian and foreign. >>but it may only be a matter of time before other english speaking countries wake up

to the opportunity. >>still to come on world business... >>something slightly different to the daily grind, we look at the new wave of speciality coffee shops. >>and cold water but classic waves, we go surfing in scotland. >>some very cool moves... and the rest in just a moment on world business... >>coffee futures have hit their highest price in three decades and many feel this is grounds for optimism. speciality coffee is in vogue and a new wave of boutique roasters and cafes has taken off, catering to coffee connoisseurs.

>>reporter: coffee is one of the most traded commodities on earth, second only to oil. clearly we have a weakness for the black stuff. for millennia it's been bought, sold, brewed and even banned. with a retail value exceeding $70 billion dollars per year, producers are struggling to keep up with consumer demand. this means prices are rocketing. >>sette: there's a great lag in reply of supply to price signals and this creates a cyclical patternin coffee prices. and today we are, let's say, near the top of a cycle. >>davies: there's also an increase in consumption from producing countries like brazil - brazil is one of the biggest consumers of coffee in the world, as well as the bigger demand for speciality coffees. so, many factors and the prices going up. >>reporter: in the uk, there

is now more demand for quality coffee than ever before. as part of uk coffee week, the recent london coffee festival attracted nearly ten thousand people over the course of the weekend. one highlight - smashing the world record for espressos made in one hour - with over 100 baristas producing 12,003 shots of espresso. >>young: we produced a book called the london coffee guide which really shows the artisanal side ofcoffee which has really emerged over the last two to three years. in fact it's really interesting, when you look at those that are in the book, probably seventy percent of those were not around only three to four years ago. >>reporter: consumers are also increasingly knowledgeable about coffee, driving a trend for more specialist cafes, like monmouth and the newly opened prufrock. from single origin beans to novel methods of preparation such as the siphon, these cafes are riding high on what's been dubbed the third wave of coffee. >>the first wave brought us instant coffee and the second - the ubiquitous high street chains. the third wave refers to a new breed of consumer.

one far more interested in both what they're drinking and how it's been prepared. >>davies: it's going to be not just a cafe. we want it to be a place where we can share information if customers want it. if they want to come in for a coffee, don't ask us questions and just leave, that's wonderful, but if they want to go downstairs, have a little play on the machine, learn about coffees on the brew bar through different methods, that's wonderful too! >>reporter: and it's not just the cafes. making up nearly 5% of green coffee exports are sales to independent roasters, also riding high on the demand for better beans. >>hoffman: i guess there's two ways to look at a market. you could look at london and say that no one buys nice coffee here so it's pointless to open a good coffee house. or you could look at it and say, we've got millions of people here and there's no good coffee. i could open a coffee house and bevery, very successful. and that's the model lots of places have taken. >>torz: to have places like that, that are pushing change, it means that people can go in there and really enjoy something that they would never have experienced before.

>>reporter: modern consumers are more ethically aware than ever before, caring much more about provenance. sustainability is a key factor. >>torz: the idea behind union was to bring something of the growers' lives to consumers and importantly vice versa - so that growers who are trying to produce coffee for a value added part of the market understand what that market needs. >>reporter: like wine and chocolate, coffee tastes very different depending on its origin, the altitude and the way in which it was grown. >>roasters who work on an intimate level can wax lyrical about notes, bouquet and floral aromas to match any sommelier. yet even the high end of the boutique coffee market is surprisingly accessible, which may account for its popularity. >>hoffman: it's the cheapest luxury item, it really is, it's astounding. to buy an average wine? five pounds. to buy the best of the best, five thousand. that's a thousand times multiplier. buy a great cup of coffee, buy an ok cup of coffee, two quid, to buy the best cup of coffee that exists in theworld today you'd struggle to spend a tenner... >>davies: i try to focus

on the product and the service. and what i've found in the past is that it's just simply that. if you provide good service, good value, good quality product, customers come in. >>reporter: the trend even looks set to filter into the mainstream. the coffee shop industry is worth over 8 billion dollars a year in the uk alone, with retail growing by 11 percent in 2010. >>young: people like starbucks, people like costa, you know, adding more artisanal elements to theirstore feel - they've even added flat white to the menu. >>reporter: which is an achievement indeed for a country renowned for its love of another drink. >>sette: the united kingdom is one of the best examples of this. it used to be a tea drinking culture and this has turned around completely in the last twenty years. >>reporter: and who knows what the industry could brew up in the next twenty.

>>scotland may seem like an unusual location for a surfing competition, but thurso in the country's far north is home to some spectacular waves. it is also home to a cold water surfing competition with 145-thousand dollars in total prize money that provides a tough challenge for the world's top surfers. >>reporter: spring in scotland - and the surf's up! >>muriel: the north east coast of scotland may seem an unlikely place to hold an international surfing competition - but conditions here are amongst the best in the world rivaling anything hawaii or even australia has to offer. >>howse: it's world class waves here in thurso east - not many people would know

of scotland as being a surf destination ... i just love it, although you're rugged up and the water's really cold there's some novelty about coming to a place like scotland that makes it way more memorable. >>reporter: those world class conditions in evidence with one surfer scoring a 10 point wave - the maximum that can be achieved in competition. >>lester: yeah really happy with that - it's kinda rare to get something like that in the contest. it's big. yeah, so something to remember. >>reporter: thurso is the second stop in the o'neill cold water classic surfing series as well as a round in the world qualifying series. now in it's fifth year, the competition takes in south africa and canada before finishing at santa cruz in california. >>ritzer: actually it started about 56 years ago that's when jack o'neill, the founder of o'neill, invented the wet suit, just because he wanted to surf longer in santa cruz where the water is cold.

>>reporter: but to compete here takes real courage. the waves may be classic, but they are seriouslycold... barely above freezing... >>sullivan: it's one of the coldest surfing venues there is i mean it's 40 degree water out there. so i came from 80 degree water last week - i came just a little bit early just to prepare myself andget ready and get my body used to wearing the wetsuits and the rubber. the water's a little bit more condensed because of how cold it is so you tend to need a little bit thicker boards out there so you float a little bit better because of the weight of the wet suit. >>reporter: it's that careful preparation and attention to detail that has propelled 24-year old kevin sullivan from lahaina hawaii to 150 in the world rankings in just four years. >>sullivan: you gotta stop doing what you wanna do and start doing what you need to do - that's kinda how i think. >>reporter: but professional surfing is a sport that doesn't come cheap, as kevin's father - and chief sponsor - explains. >>sullivan: he does have

sponsors that finance him but i also contribute to that and it would probably be in the neighbourhood of 60-thousand a year where it would take him to maybe 12 to 15 events throughout the year. it can be more if he is not doing so well on the tour he'll want to be in more events. >>reporter: finding the finance to pursue the sport takes more than just being good in the surf. >>howse: in the past you used to get sponsored if you had the ability - nowadays we look at everything from personality, whether they can hold themselves in front of the media, how they work with photographers and video guys and the relationships they have with the magazines ... so there's a lot more to it than just going out there and surfing really good, you've gotta be a sort of package these days. >>reporter: so struggling young surfers have to paddle hard to attract sponsors, but it's no easy ride

for the sponsors themselves. >>ritzer: definitely a lot of competition between the companies to get the good guy - there's a lot of surfers, a lot of athletes but only a few outstanding ones. >>reporter: kevin sullivan fought through to the 16th round but didn't make it into the quarterfinals. he still has high hopes of breaking into the world's top 100 surfers eventually. >>sullivan: it's something that i never want to stop. i live in hawaii and the tour ends in oahu, the north shore which is - you know - the superbowl of surfing. it ends in hawaii, you know... so i always want to be in those events at the end of the year even if i'm not travelling internationally. >>reporter: winner of this leg of the competition ... australian brent dorrington, sponsored by rival oakley - who having lifted this highland sword, walked away with the title of lord - as well as a crack at the fifty-thousand dollar prize money for the overall series winner. >>ritzer: if you just buy a little piece of land

in scotland you become a lord because you're a landowner so lord means nothing else than being a landowner so everybody gets about 10 square feet of land and that makes them lords. >>reporter: and these lords of the surf will undoubtedly be riding the waves again in scotland for year >>that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.