>>abirached: this week on world business a look back at some of the best stories of the last year includingà >>adopting a western consumption model to escape the western caused recession; beijing's efforts to boost spending in china's heartland. >>promoting rural consumption is great as a 10 year strategy but as a one year quick fix, it's very,very difficult for me to see that it can provide enough of an offset. >>temporary workers but long lasting problems, japan is turning its back on permanent staff. >>now that we have long-time stagnation, and we are facing an aging population, we have to change that labor market. >>and breaking the back of bonus culture, how the downturn is forcing firms and staff to reassess

remuneration. >>i think this is an emotive time. there is a lot of speculation and not enough facts when it comes to dealing with this issue >>hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. this week we are looking back at some of the best stories of the past year. as global trade worsens china is braced for rising unemployment and social unrest. tocounter the downturn, beijing is encouraging the chinese to spend, in particular, the 700 million living in the vast hinterlands. this is a tall order, as these are china's poorest people.

>>reporter: there's a saying in china, that ôif you want something done, then give something first >>here in changpo, southwest china's guizhou province, 17 farming families each received a 2,000 us dollar government grant - plus land û to help construct new homes after landslides severely damaged their old properties. >>as it costs around 8,000 dollars to build a house like this, the policy succeeds in boosting consumption by encouraging devout savers to spend. >>and in these times of economic uncertainty, the party also banks considerable political capital from those that missed out on china's economic boom. >>chen: they helped build the home, gave us a warm place to live; they laid on electricity, we have light, water supply, we can clean û and the most wonderful thing is that they gave us a path to prosperity. >>reporter: across guizhou's wudang district alone û an area around the size of new york city û theauthorities

have helped fund over a thousand new homes, as well constructing roads and bridges to connect remote communities with the market. >>the zhong family in hongqi village says all this makes a big difference to their living standards û as do other specific farming policies. >>zhong: the government helps to finance purchases of seeds and they also send experts here to advise us û especially those agricultural technologists. >>reporter: the policies are designed to boost rural net incomes û and so spur domestic demand enough to help cover the collapse in exports and meet the government's, ambitious, 8 percent growth target. >>in a bid to supercharge spending, right now, farmers can also qualify for vouchers that rebate up to 15 percent on home appliance purchases >> -- a scheme that could generate, this year, over 20 billion dollars in sales of warehoused washing machines, refrigerators and televisions.

>>on the work front, other similar discount schemes cover motorbikes and vans û plus there's a popular 38 percent discount on farming equipment. >>he: it's a tremendous change. in the past, farmers didn't want to spend money. once the governmentoffered the preferential policies, they started spending money on farming machinery and home appliances. this helps the farmers out as well as assisting our domestic consumption needs. >>reporter: but to what extent? the 700 million strong rural community certainly supplied ample cheap labor during the export manufacturing boom, but can it really be expected to spend and turnaround a slowing economy? >>farmers' incomes, after all, are still a quarter of those in the cities; agriculture accounts for only 10 percent of the gdp. >>fishwick: you can boost that income by 20 percent and it's still going to be less than a third of the salaries of the jobs on the coast that have been lost as a result of export industries shutting down. so the hard fact is, is that promoting rural consumption is great as a 10 year strategy but asa one year quick fix, it's very, very

difficult for me to see that it can provide enough of an offset. >>reporter: what can make the difference is old fashioned keynesian economics. in china's case, allocating sufficient amounts from its 580 billion dollar stimulus package to projects û notably highways, railroads and other infrastructure building - that provide replacement jobs for as many of the 20million redundant migrant workers as possible. >>mackie: the party realizes, however, that there won't be stimulus jobs for everyone. so, for those now back in the townships who want to set up a rural enterprise, local authorities are providing basic business training and start-up grants of around 800 dollars. in addition, the government is trying to encourage rural based banks to provide unsecured loans. >>reporter: but in reality, the banks still want loans backed by collateral ûand that doesn't include the farmhouse. >>although micro-credit is available in china, like from this sichuan based organization, lenders cannot work with savings deposits

or equity as this fledgling sector's operational cash must come fromdonations. >>li: in china, the legal system and politics restrains it. however, china has realized that micro-credit is an inevitable part of our economy's development. >>reporter: these days, the government welcomes cash in most forms for rural initiatives as it embarks on a huge, expensive structural change to its economic model. the big focus on farmers is not because the party has suddenly remembered who brought it to power 60 years ago. rather, beijing needs to maintain confidence at large as it tackles the economic crisis and unemployment fall-out. and thisdovetails with the longer term strategy to narrow the urban-rural income gap and establish a credible internal market. >>abirached: as the scale of the global recession became clear at the end of 2008

the resentment thegeneral public felt towards the financial sector was clear to see. so when bonus season rolled around in the depths of last winter, many workers had to face up to the fact that this was going to be avery lean year. >>reporter: this winter high rollers in the city of london lined up for their annual windfall of cash. in years gone by it was a time for celebration but it soon became clear that this year was the winter of discontent. >>benson: clearly you've seen this year collectively banks, financial institutions announcing huge losses. clearly bonuses that make up the bulk of compensation are down significantly this year. >>reporter: it came at a chilling time for europe's financial capital. and turned out to be one of the worst bonus seasons since the dot-com collapse. as investment banks tried to weather the recession -- thousands of city workers expected an icy dropin payments. some were even calling it the ôyear of the doughnut meaning a zero

bonus >>any extra payments to city workers were likely to cause friction with the general public as the u-k recession kicked in >>ispahani: it is an emotive time there is a lot of speculation and not enough fact when it comes todealing with this issue. there is a perception that people on the whole have been consistently overpaid and that is not the case. i think what has happened it has been the few who have behaved badly and have been overpaid that have bought scrutiny to financial services >>reporter: late last year the uk's financial services authority got involved for this very reason ûwriting a letter to ceos at investment banks highlighting their fears >>there is widespread concern that inappropriate remuneration schemesàin the areas of investment banking and trading have contributed to the present market crisis. >>reporter: once frosty to reform -- institutions are now scrambling to revamp pay structures. >>ispahani: the fsa's dear ceo letter was their opening salvo

to financial services about get your house in order. and what we are seeing already from a number of houses is that they have. >>reporter: ubs and morgan stanley are taking the lead û with claw backs on bonuses if deals turn sour û they also deferred payments so that bankers think more in the long-term. >>benson: there is clearly a huge amount of political pressure on both sides of the atlantic. to make changes to the bonus culture but let's not forget that this is performance related pay so people who perform well do need to get rewarded well. >>reporter: in new york eighteen point four billion dollars in bonuses were paid out this year despite the downturn. in response president obama is looking to cap wages at firms that are now receivingus government aid. >>flanagan: there is an over-hype creating a link between bonuses in the city and the downturn stroke recession. it is inevitable that in times of want people will look at those who have. and i think that is what's driving this. i also think

that this is an unfortunate populist measure that the government is focusing on because it is easy to explain. >>reporter: yet the city now expects a slippery ride --fearing new regulation and political pressurefrom the uk authorities -- the question is whether this could freeze up london as a financial hub -- with fears mounting that other global banking centers could be eying disenchanted workers. >>benson: clearly there's going to be more regulation. that needs to come in. i am hopeful that thatwon't be overly oppressive because if it is it will tend to drive away talent. it will tend to drive away institutions and that will be severely damaging to london. >>reporter: the entitlement culture that mushroomed in the bull market years is thawing. bonus expectations are already lower --the city is more sensitive to public outrage at big payouts. and globalrecession -- by its very nature -- is ushering in a new era. >>flanagan: i think the greatest impact

and the biggest hook if you like on which to hang potential change for the next few years is the fact that bonuses will undoubtedly be a great deal less this year. there will be a degree of self-regulation simply by the fact that there is not enough money around. >>reporter: this year a diet of doughnuts or zero bonuses may just save the banks from their own excesses. yet the uk public's icy attitude towards the city is not likely to move to sunnier times as long as the short-term bonus culture is still seen to fuel business. >>abirached: still to come on world businessà played by millions around the world but watched by hardly anyone, why squash needs to think outside the box. >>and as firms shy away from hiring permanent workers in japan the country is seeing the rise of a new professional underclass. >>plus farming fish eggs û why the caviar industry is turning to sustainable sturgeon. >>abirached: fishy businessà and the rest in just a moment

on world business employment system - but now it has become the land of the temp worker, in the wake of sweeping deregulation which transformed the business about a decade ago. the temp revolution has proved a windfall for japanese companies, but has also unleashed a host of social problems. >>reporter: they are a fixture of shopping arcades across japan û all-night internet cafesà >>but many regular patrons of japan's internet cafes have no interest in web-surfingà >>they are known as net cafe refugees workers who can't earn enough to support themselves, like this34-year-old video shop

clerk >>i stay here twice a week, the rest of the time, at my parents house. if i come here at seven and leave at five, it costs only ten dollars. but you can't really sleep. it's cramped. and it's exhausting. >>craft: i'm here at the mambo internet cafe in a section of town called kamata. it's a blue collar section of tokyo. i've all the comforts of home here. i have internet, i have a video player, i havea comfy place to spend the night if i wanted to, they have showers here, slippers, free drinks, theworks! as i say it has all the comforts of home, and for a lot of japanese it is in fact has becomehome. >>reporter: these rooms are plush, compared with the dirt-cheap strawberry internet cafe, which charges 100 yen or about a dollar an hour. cameras are not allowed to film inside, where 200 tiny cubbyholes fill by nightfall with men, young and old. >>japan's internet cafes, in other words, have become flophouses, home to a burgeoning army of part-time workers, and symptom of a national

malaise. >>sekine: temp workers are considered disposable. low wages, and unstable working conditions have spread so fast, we have ended up with a population of 'working poor.' no matter how hard they work, they just can't make ends meet. >>reporter: today, one out of every three workers in japan is a part-timer - the highest percentage in the industrialized world. >>nariai: that generation from late 20s and 30s, it is an important period to get a skill. but these people may not have opportunity to get such kind of specific skill. that's a problem for our society. >>this is a list of all jobs right now that are onlineà >>reporter: but the temp industry û growing by a scorching 30-40 percent annually since deregulationof the sector a decade ago û argues the temp revolution has been a boon for many, such as housewives and students à

>>nemoto: do all these people really want fulltime jobs? from our perspective, no. people say they want choice. we need to create a marketplace that offers all options û whether full-time, part-time, or entrepreneur. >>reporter: yet critics argue most workers take temp work out of necessity, not choice. some economists believe the root of the problem lies not with the temp industry, but with overly protected regular employees, legacy of japan's fast-growth eraà >>yashiro: now that we have long-time stagnation, and we are facing an aging population, we have to change that labor market practices as soon as possible. >>reporter: yashiro, who advises the government, says only by reducing benefits for regular workers,can draconian conditions for temps be improvedà >>yashiro: if in japan, just like the us, regular workers can be laid off at recessions, we don't need such large amount of temporary workers. >>reporter: such suggestions are political dynamite,

and experts predict current legislation, to be reviewed by the parliament later this year, will do little to stem a continued surge in the ranks ofthe working poor. >>abirached: for centuries caviar has been a symbol of wealth and indulgence, but now pollution, poaching and overfishing have all combined to create a crisis in the industry. wild sturgeon are in danger of dying out, so increasingly consumers and suppliers are turning to farmed caviar. >>reporter: for centuries the world's greatest caviar has come from the caspian sea, but today thereis a real fear that wild sturgeon could be dying out. >>roberson: the threat to sturgeon in the caspian sea is very serious. iranian scientists have estimated that unless poaching is controlled and management is taking care of we could see the extinctionof sturgeon within 14 years.

>>reporter: the annual legal caviar trade is worth around 200 million dollars, but poaching and the black market could be 10 to 15 times greater, with even conservative estimates above us $1 billion >>but the tide is beginning to turn; consumers are increasingly choosing a more ethical and sustainable alternative; farmed caviar. >>gross: five years ago we used to sell approximately 95% of wild caviar and last year for instance,2008, we sold 80% of caviar from farmed caviar so the trend inverted. à most of them, i tell you the truth, are preferring the farmed caviar now. >>reporter: and some major retailers have stopping selling wild caviar completely. >>gates: we made the decision to switch in the autumn of 2008. we had a mixture of some wild and some farmed and with everything that was really going on in the caviar

arena, and looking >>gates: we made the decision to switch in the autumn of 2008. we had a mixture of some wild and some farmed and with everything that was really going on in the caviar arena, and looking at the quality of farmed, we made the decision to switch and obviously the sustainable production was a key factor as well. >>reporter: farmed caviar was once the poor cousin to wild, inferior in both taste and quality, but now, despite costing up to 40% less, even professional chefs are impressed. >>harris: it's much more like caviar. i remember when i first tried it, it really tasted as it was trying to be caviar but wasn't quite there. that is caviar. >>reporter: not bad for a product that only came into being 15 years ago as an offshoot of farming sturgeon for meat >>sabeau: at the beginning we don't know the production. we never make farmed caviar, never in the worldà, firstly we learnt how to grow the fish and then how to prepare the caviar >>reporter: at this farm 200 tonnes of female sturgeon are kept in fresh river water tanks until they can be harvested at the age of eight.

but such a long lead time means a long and expensive wait. >>sabeau:it is very expensive and you have a lot of risk, because you have to wait 8 years to produce caviar and during all this period you can have a lot of things different. you can have a lot of risk and perhaps at the end you have nothing >>reporter: however, ultra sound scanning and biopsies enabled the farmers to keep constant checks and harvest at the optimum time. 9 >>milns: here in my hands i've got about $1500 of caviar which i have taken fresh from the belly of this newly slaughtered sturgeon and if you look closely you can see each individual egg glistening. it's still attached to the membrane so the next stage is going to be for us to go and sieve this through the mesh and clean it up. >>reporter: once it has been rinsed, the salting is the key part of the process. >>we have to mix, but gently. >>reporter: it is then tinned and can stay in these slip lid

tins and mature for up to 12 months. what's more, it's now taking on a very international flavor. >>sabeau: you have the middle east, the chinese and in europe and in south america you have two or three countries. all over the world you have some projects of production of caviar. >>reporter: farmed caviar also enables a much more consistent supply. harvest qualites of wild caviar can fluctuate wildly, as can the final price. >>gates: we found it difficult to often quote prices to customers so farmed caviar has allowed us tohave something that is constant and customers knew where they were. >>reporter: and it seems customers approve. farmed caviar took a while to catch on, as much for reasons of snobbery as gastronomy, but so far the switch to sustainable caviar has been a smooth one. >>gates: those people who enjoy eating caviar will continue to enjoy eating

caviar so we are very happy with the sales of caviar. we've not seen any drop-off at all. >>reporter: so it seems that even in a recession, connoisseurs will continue their love affair with caviar. only these days the very best caviar may just be farmed. >>abirached: the largest beluga sturgeon ever caught was in astrakhan in 1908. it was the length of 11 men standing shoulder to shoulder and yielded 450kg of caviar. today that haul alone would be worth $800,000. >>abirached: the game of squash has existed in various forms since the early 19th century, and is one of sports' most physically demanding pastimes. around the world, it's played by millions, but despite this, it's always struggled to generate real interest in the media, and that's hampered its progress. however, squash is now pursuing one major goal it believes could transform the game. at the end of last year we went to the world

championships in manchester, to find out what it isà >>reporter: what is there not to love about squash? a sport with speed, skill, and passionà. >>no wonder then, that it's the game of choice for millionsàin over 150 countries worldwideà >>khan: we have more than 50m people playing all over the world. we have so many countries coming upwith different tournaments and things like that. >>reporter: but talk to the game's biggest sponsor, in a sport that struggles even in a major tournament like the world championships to attract blue chip backers, and you'll find these aren't quite halcyon days for squashà >>wezel: squash from say a very popular sport in the late 70's and 80's has lost a little bit of impetus.

i do see the participant numbers and of course over the- shall we say- last 10 years they havedropped. >>reporter: one major problem is a lack of tv coverageà.largely because it's just not the most spectator friendly sport in the worldà >>david: at the moment we are struggling to because it's so fastà the game is such a fast gameà people have a tendency to lose the ball at a certain time. >>khan:but i think it's improved a lot. now we have the glass courtàglass flooràthe ball is so visible that you can see much better. >>reporter: indeed the plexiglass court does help, and in recent years the transparent courts have appeared in some rather spectacular locationsà >>david: so it's our position to really bring the game to the public. like bringing glass courts to shopping malls or to like main landmarks like the pyramids or to the grand central station. >>reporter: events like that have drawn big crowds and stirred up interest, but it seems everyone

from the sports administrators to superstars liketriple world champion and world number one, egypt's amr shabana, recognise the one thing that would truly spur growthàis inclusion in the olympicsà >>shabana: 3x world champion & world number 1 hopefully we'll get the message across that squash is still the only racquet sport not at the olympics and should be there. >>khan: this is our main target right now. >>reporter: squash has been lobbying for olympic inclusion since 1986 and is hoping that from a shortlist including golf, rugby and baseball, it'll be one of 2 new sports selected for the 2016 games >>wezel: when it becomes eventually an olympic game, as we all hope, i think then it will definitelywill see a round the world more squash participation. >>reporter: it's certainly a very good way to work up a sweat, but quite apart from being healthy, squash would undoubtedly trump its olympic rivals if it came to judging which sport had the most unusual starting pointà

>>jong: well, the fact that i'm in a confined space, surrounded by 4 fairly high walls may give you a clue as to the origins of the sport. because it wasn't invented by some bored pe teacher, or some posh public schoolboysàit was invented by the lags in a london prisonà >>reporter: one assumes the inmates in fleet prison weren't as fleet of foot as those playing todayàand as it was a debtors prison, not quite as solvent either, although when you learn that nicol david took home just 17, 000 us dollars for winning this tournament, and the biggest men's prize ever has been $31000, you can see that playing is no licence to print moneyà >>gaultier: we can live comfortably but not as a tennis player or football player we are so far awayfrom this you know. >>shabana: i always say squash is like tennis or football, but you take 2 zeros or 3 zeros off the bank account.

>>reporter: that lack of cash might explain the inner rage some players seem to harbourà >>although there's little doubt, that come october 2009, if the ioc decides squash is ready to take its place at the olympic table, the prevalent emotion in the game, will surely be one of celebrationà. >>abirached: that's it for this week's world business. thanks for watching. we'll see you again atthe same time next week.