an aggressive stand. >>reporter: after years of being ignored ebooks have finally found their medium and a huge new market. >>we started with e-readers about two years and a half ago; we started with only five products....and now we have 25 >>reporter: and vietnam may be expanding at a staggering rate, but with high debts and soaring inflation the country still has plenty of issues it needs to deal with. >>vietnam is the rising dragon of the east if you consider the growth numbers but it is a dragon on steroids >>reporter: hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. china is now

the world's 2nd largest economy and growing at a blistering rate. the country also spent billions of dollars on showpiece events like the olympic games and the shanghai expo. so why are other countries still sending aid money to this economic powerhouse? >>reporter: bucks for bamboo; in rural sichuan, europe's taxpayers are funding a two and a half million dollar project to help revive, boost and sustain stocks of this fast-growing, versatile, substitute for timber. >>managed by the international network for bamboo and rattan, inbar, the programme also promotes safer factory working conditions, more effective marketing and greater use of bamboo in construction. the goal is to strengthen economic recovery in a region where the production chain was destroyed in the 2008 earthquake. but there's a long way to go. >>dr. yiping: a lot

of problems, i think, for the workers' safety, for resource efficiency - so i think this project can bring a lot of experience or expertise from outside to help with lots of people. >>reporter: indeed - but in europe's age of austerity, why isn't china financing projects like this itself ? >>the world's second largest economy has some 2.5 trillion dollars in foreign reserves. yet it stillwelcomes 2.5 billion dollars annually in foreign aid - 70 million dollars from the european commission's budget alone, millions more from eu member countries including cash-strapped greece and ireland. >>abou: we try to adapt smartly to this situation where we have to help a country which has huge financial means - but i can say that in spite of that, these programmes that we are helping would not be done if there was not our help. >>reporter: poverty reduction, environmental protection, strengthening civil society -

these kinds of targeted programmes are actually political priorities for major donors like the eu, the us and japan. but there's also a legal explanation for aiding china. >>for sure, china has the means to dazzle by spending billions on events like the shanghai expo and the beijing olympics - not to mention a hundred billion dollars annually maintaining its military. and the country has also emerged as a multi billion dollar donor itself - though it's accused of propping up unstable african regimes as it seeks valuable mining rights to feed its industries. >>but despite having most of the world's billionaires, china's per capita annual income is below 4,000 dollars. and so, under the framework of the organisation for economic co-operation and development, the oecd, china still qualifies for international aid. >>abou: i'm not saying this is a taboo question but it's a question that for the time being our leadership, let's say, has decided not to take an aggressive stand.

>>reporter: in 2008. oecd member japan contributed over a billion dollars to china. while germany, the second largest donor, provided half a billion. france and britain each earmarked over 200 million dollars, the us, 65 million. britain and germany, however, are now re-focusing their efforts on more impoverished countries - though they remain major contributors to the eu budget. but ever-mindful of trade relations, most governments tread carefully with china - least they offenda notoriously suspicious and sensitive recipient. >>yongjian: giving aid may show friendship towards china and it's also a way of communicating a message. if you stop aid to china, it may send china a political signal. it might mean that you won't beso friendly as before. what do you want to do? this can affect bilateral relationships between countries. >>reporter: it looks like clutching at straws,

and indeed taxpayers in donor countries give their politicians short shrift for funding china to such an extent - given that it's a major competitor withtrillions in the bank. but the aid equation is complex, as targeted projects can deliver substantial long term benefits. by focusing alone on the cash pledged today, you don't necessarily see the wood from the trees. >>reporter: handheld electronic books have been around for a surprising amount of time. in fact the first handheld e-reader, "the rocket" was launched way back at the end of the last century. for years they failed to catch on with the public, but at the end of last year, the market finally took off. >>reporter: another day, another launch of a handheld media device -- with even more functions to entice the growing legion of electronic readers.

>>smith: over the last ten years essentially it has gone from very basic devices with simple black and white screens and now we are seeing gadgets like the ipad with bright coloured screens, video, web access, music playback, pretty much anything you can do on a laptop-pc. >>gurnah: the biggest challenge is differentiation; when everybody's making digital readers, what's the difference between all these different devices? for us it's pretty clear it's touch screen and it's just library loading......so you can get books from your library. >>reporter: a far cry from the products ion. steryear -- by 2012 >>west: we now have mass merchandisers sort of supermarkets, we are seeing consumer electronic stores taking on the product and now computer specialists as well. so we're at a point now where gfk are tracking over 11,000 outlets in the uk holding this type of product. >>jerome: we started with e-readers about two years and a half ago; we started with only five products....and now we have 25 so we have a lot more choices for the customer.

>>easen: the market for tablets, web-books and e-readers now has new momentum, spurred on by an explosion in the number of models, content and applications. but whether combining traditional reading experiences with innovative digital channels will drive a new era of profitability remains to be seen. >>reporter: it helps that the model for monetising this market already exists with consumers successfully paying for applications on their iphone and for digital copies of novels. >>gurnah: with these devices content is absolutely king, without books this is a piece of digital junk. so we've been working really hard with people like google, with some of the uk's biggest publishers like harper collins, random house just to make more books available. >>reporter: and not just books. the real driver could come from a sector that has struggled in recent years. >>hobbs: i think it is a real opportunity for the newspaper publishers in particular. i don't think their traditional models are broken. but we all know that they need to invest into multi-revenue businesses, become multi-revenue businesses.

i think they are doing that relatively successfully. >>reporter: many publishers now have ipad applications: take the ft - 400 thousand people have downloaded its app and already ten percent of its subscriptions have come through this medium. >>christie: i think they like it because it is a bit like that harry potter newspaper, its print butcome to life. so it's got that video, it's got the interactive graphics. it is much more than just a newspaper. but it's got the advantage of the newspaper in that it's finite; there's a beginning; and a middle and an end, which people do like. >>alger: all of a sudden you can t3 magazine or you can get your magazine out to multiple markets atvery, very low costs. so the money that you put in creating the content could come back ten fold when you open it up to a market like the us; where at the moment, t3 magazine isn't sold. >>reporter: the main beneficiary from this explosion of hardware and software is the consumer - but early adopters in the past sometimes pay the price, like

those who chose hddvd over blu ray, or betamax over vhs. >>frost: the consumer needs to remember the battles between the various video formats for example. and bear in mind there will be winners and there will be losers. and so when you are backing a piece of hardware be aware that it could end up being the loser. >>mann: certain players just get the formula right; the combination of the form factor, the price point, the availability of content and applications and the marketing and brand that associates that. there will be many players who try, there will be many players who don't have all the ingredients intheir arsenal; and therefore won't be able to compete against the likes of apple and amazon. >>reporter: predicting the writing on the wall...with these devices...it reads like a good digital thriller. >>reporter: and since we made that film blackberry has also

entered the market, taking on the ipad with its playbook. >>still to come on world business... >>vietnam may be one of the stars of asia, but with rampant inflation and serious inequality, could it soon burn out? >>something slightly different to the daily grind, we look at the new wave of specialty coffee shops. >>and the rough and ready sports of shinty and hurling clash together to form an interesting hybrid. >>the clash of the ash... and the rest in just a moment on world business... >>reporter: earlier this year we travelled to vietnam to report on the huge leaps forward made sinceit began economic reforms in the mid 80s. however despite some undeniably impressive progress, the country still

faces some serious issues.... >>reporter: there is an energy to modern vietnam - even an it fair calls for cheerleaders and dance troupes. >>it's an this energy proving attractive to foreign investors like intel, which has invested 1 billion us dollars here, building this high tech processing plant just outside ho chi minh city, but evenfor firms prepared to plough huge sums into the country there is a feeling of caution. >>howarth: what i find in the government is willingness, they want to grow their industry and they want to go change their economy they're very conservative but conservative because they don't know and don't have resources of some other countries around here that they can make mistakes. they're very methodical, and ask lots of questions which i think is prudent, again trying not

to make a mistakethat will set them in the wrong direction >>reporter: for 25 years, since economic reforms began, vietnam has been moving in the right direction, transforming itself almost beyond recognition. from the brink of starvation and ravaged by war it is now a vibrant, rapidly growing and modernising economy. >>baweja: vietnam is the rising dragon of the east if you consider the growth numbers but it is a dragon on steroids >>richards: so there is real pride in the way the country has developed but there is a long way to go yet before it is seen as one of the leaders in the south east asia region. >>reporter: gdp is growing at nearly 7 percent, a figure many western economies can only dream of, yet there is an increasing fear this growth is unsustainable. >>baweja: if vietnam doesn't slow down right now, it needs to slow down credit, it needs to raise interest rates and it needs to reign in external deficit, if it doesn't do that i'm afraid we're heading towards bubble territory.

>>reporter: inflation is already rampant, hitting 11.8% in december 2010 on a year on year basis. the dong has been devalued three times since last year. and there is a current account deficit of $2 billion dollars. >>tam: this year our growth rate is 6.7 % but actually inflation 11%. a growth rate of 6.7% inflation needs to be the same or lower, it means the real economy is low. that is why vietnam needs to improve >>reporter: meaning this stellar growth may all count for nothing to the man on the street, presenting a real issue in a country already suffering from serious inequality. >>baweja: i think the government has to keep a very keen eye on social unrest especially in an economy that is overheating, because unlike the developed world in the developing world food prices comprise of a very large part of the overall consumer basket, and if food prices and consumer prices in general are rising it's

a big tax on the have nots >>reporter: while in the cities young upwardly mobile youngsters snap up mobile phones and the latest fashions in rural vietnam - which accounts for 75% of the population a quarter of people live on less than $1.25 a day >>it's a deepening divide posing some say the nation's greatest threat. >>weeks: if you begin to get ostentatious displays of wealth, which you're beginning to get now, i think there is going to be quite a social strain, i think that is probably the greatest danger the government faces >>dinh: there are still big gaps and in the future i think we need to have a new model that combineshigh growth and equity. >>reporter: a new model that requires inward investment, especially in infrastructure to link the booming cities to rural areas. it's estimated about 120 billion dollars is required for railways, roads,

electricity and water supplies. >>yet despite steps to open up the economy, the government remains extremely conservative, too oftenbureaucratic red tape and an economy dominated by large state-owned groups put off would be investors. >>weeks: if foreign investors are hoping for a vietnam in five years that has an independent centralbank, a floating exchange rate an open capital account then they are going to be disappointed. >>richards: things have really changed in the last 10, 20 years. but there's still a sense the communist party have this controlling mentality, where it's really reluctant to go the whole way >>reporter: the country is freeing up, but with the communist legacy looming large, changes will be small and will not happen overnight. >>baweja: i think this is going to be a slow process, i don't think they will, i think they will begin to let

go of key things like interest rates and credit rationing, but over a period of time, thisis not something that will change over the next two years >>reporter: that said, if you listen to the country's successful businessmen, the future for vietnamis the focus and looks to be a bright one. >>trung: the thinking of the vietnamese people is very positive and that's important, everyone thinks tomorrow is better and that we can do something tomorrow and we don't have time to think of the past, that's the key element to the fast development of the economy >>reporter: 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 is filtering into the mainstream.

>>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 of coffee 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: 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 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... >>reporter: and 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. >>reporter: the celtic cross-code sport of shinty/hurling is an unusual hybrid. it has no dedicated leagues or clubs but is played at international level, has a unique rule book and opposing sides even use different equipment. at the end of last year we took a trip to dublin to find out more. >>reporter: in front of a 60-thousand strong crowd the ancient celtic sports of shinty and hurling combine to produce a thrilling spectacle in dublin's main stadium.

>>the shinty sticks of the scottish national team are pitted against the hurleys of the irish in a clash as fierce as any ancient battle. >> cooney: we're all celts and it's important that we would try and get a game together to play against each other. for our players its important because it gives them recognition at the national level, gives them the opportunity to play under the irish jersey. >>reporter: although both sports come from the same distant root - the rules of this cross-code gameare unique. >>daly: what we've had to do is compromise as best we can... obviously the shinty players have a different stick, the hurlers have a different stick so we believe the best way of achieving balance is to not allow the players to handle the ball with the exception of the goal keeper so the shinty players can keep the traditional skills of playing the ball on the ground, the hurling players can lift it and strike but it is not permitted to take the ball in the hand. >>reporter: that significant rule change from the game of hurling can be hard to hold to as irish centre forward, neil mcmanus explains. >>mcmanus: all those guys have

been playing hurling since they're maybe three or four years of age so whenever a ball comes to you at chest height the natural instinct is to catch it. so you really have to think what you're doing and concentrate. >>muriel: but the fact is this shinty-hurling match is a warm up for the day's main attraction - another cross code international between gaelic and australian rules football. sharing the limelight with ireland's most popular sport it is hoped will raise the profile of hurling and its sister sport in scotland - shinty. >>cameron: it's the only international that we have and we view this occasion as the ultimate in a pathway for our top players. for the players they have played for a club, for a district, for a region and now they are playing for their country... we are still a minority sport and we don't have massaudiences. >>reporter: there are just 46 listed shinty clubs in scotland -compared

to 2-thousand 500 hurling clubs in ireland - but both are amateur sports - and that's the way they are likely to stay. >> cooney: there was a push by players some years back that they wanted pay for play but now that's gone totally off the equation. we're working very closely with the gaelic players association in developing positive player welfare schemes and pay for play is not an issue. >>reporter: but winning sponsorship can be. >>innes: you cannot make a career out of an amateur sport - there's just no money in it for us. if there were then obviously we'd be very, very happy >>reporter: scottish hydro-electric recently signed a second three-year contract with shinty's governing body as its main sponsor for an undisclosed sum - but every player on this pitch needs to holddown a day job in order to survive. >>former shinty international captain gary innes has an instrumental part to play in promoting his beloved sport. an image of him playing shinty was used by scottishp rug

on a recent album cover - and he features playing the accordion on runrig's shinty tribute song 'clash of theash' - a reference to the type of wood used to fashion the shinty stick. >>despite its ancient roots in the scottish highlands shinty is a sport undergoing change. >>innes: that's with great respect to the camanachd association putting money back into the sport and getting it right back to grass roots levels in the cities. >>reporter: 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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