under developed, we're coming from a very low starting point. that's why, in our new five year plan our growth could reach 20 percent. >>reporter: one of pengshui's big ideas is to build a new city centre on this farmland, a 20 minute drive away. in a couple of years' time, the billion dollar project will be linked to the old districts via a tunnel through the mountain. investors are supposed to provide 23 percent of the cash, the banks 60 percent with the balance coming from central, regional and local governments. >>those facing relocation don't really care if this is a rash development or if it makes sound economic sense - so long as their pay-off is worth it. >>us farmers can benefit from the development and construction. but if the government goes ahead with the project and we're worse off, who will agree?

>>reporter: the trouble is, as the people's bank of china knows only too well, the real value of compensation risks being diluted by inflation - which, despite three interest rate hikes over four months, accelerated in january to 4.9 percent year-on-year >>the spur was a four trillion dollar stimulus package - which cushioned china's export-reliant economy from the global financial crisis. in turn, this opened up the floodgates for huge levels of banklending that saw the money supply grow more than 50 percent in two years. >>it went to companies that bid up the price of land, it bid up the price of the natural resources around the world. when it did land in people's pockets, people put it into tangible forms of tangiblesavings like real estate or even gold. and so what you've seen in china is actually asset inflationand not necessarily consumer inflation. but eventually, asset inflation is a tricky thing. >>reporter: it's tricky because it feels like a boom. that is until inflation spread to payrolls andthe general

basket of consumer prices - notably food. >>even those with strong buying power, like this new york listed chain with over 100 outlets, saw prices soar in late 2010. >>commodity prices have gone up across the board. we've seen chicken prices gone up probably around 16 percent year over year; rice, cooking oil - they've all gone up - pork, beef, almost everything >>reporter: and, of course, property buyers are finding prices are still rising - defying measures like higher down payments and restrictions on multiple mortgages. as for the thousands of foreign companies operating in china, concerns are mixed - with much depending on which market they're selling to. >>some of these are targeting the fast growing chinese domestic consumer market. and even though we can see some declines now in consumer confidence index i think that their prospects or their concernfor the future is

less than those who are here now for the sourcing and production for exports to europe. >>reporter: the government's primary focus, however, is the economic health of this nation. so today's leadership wants to move away from an export and investment driven model to one powered by domestic consumption, with single digit gdp growth. this means allowing the rmb to appreciate; and also wean the economy of its addiction to cheap, ready available money. but this is easier said than done. >>you're going to have a lot of people screaming for loosening again. and there's going to be a lot of entrenched interests - property developers, local government officials who want to meet their gdptargets, who are going to be screaming to resume the lending. >>reporter: china's regions have already published their latest five year plans - and most have breakneck double digit gdp growth targets, fuelled by investment. >>this could well heighten inflationary pressure - though

local policy makers in western china say inflation of up to five percent is beneficial. >>it's good for the movement of capital, it's viability, it's good for attracting personnel, it's good for restructuring, for adjusting industries. >>reporter: different tiers of officialdom have different priorities. and while china has an authoritarian government machinery, the leadership must perform a delicate balancing act with the regions where policy is often re-interpreted, or sometimes phased-in, to fit with local needs. over the coming quarter, the government's mettle will be tested. >>reporter: climate change is a reality and something the world has to adapt to fast. one issue thatis already a serious concern and looks set to become increasingly severe over the coming years is food security. eckart sager sat

down with the director of the earth institute, jeffrey sachs to find out more. >>in general the staple foods; rice included, but also wheat, maize and other grains have seen a very significant increase of price in recent years. basically this is rise in world demand pushing against limited supplies; and there's more pressure like that to come. the world's getting richer in income levels, especially with asia's growth. the world's becoming more populous; reaching 7 billion in2011 and a little more than a decade later we'll reach 8 billion, according to the un medium forecast now it could be more than 10 billion by the end of this century. all of this means this challengeis becoming more and more serious; while there still is some productivity growth, it's much slower than

it was in the past. the big gains of the green revolution have already been achieved, the ecological cost of the first green revolution are becoming greater and greater. for instance the drop in water tables in places like northern china and in india where bore wells were used to irrigate greenrevolution crops. so we need a second green revolution; one that is also ecologically green as wellas yield green. >>reporter: how do you see the importance of investment into agriculture more? how can we do that down the road? >>we have a huge unmet challenge; we have to invest more in agriculture to get more per unit land area of using existing technologies better and we have to invest more in research and development to find better ways to grow the food that give good yield, but also

resilience. and then there's one more piece of this puzzle; and it's a daunting puzzle. we are already in the era of climate change, sometimes we talk about climate change as hypothetical, or for the future. well climate change is real;it's not hypothetical and it's not only in the future, it's in the present. there's more climate instability, there are more hazards; like drought and like floods that are undermining the food supplynow, not just in the future and there's more to come. >>reporter: ...are we facing a doomsday scenario? i mean what solutions are there? how do we get ittogether? and especially the political will; who should lead this? >>asia needs to take the lead; asia says 'us?! why should we take the lead, we're still following, we're still catching up...' but the fact of the matter is; asia is more than half the world's population, asia is incredibly vulnerable to climate change so no chinese leader,

or indian leader, or indonesian leader could say 'ah, what difference?' because these are the most crowded countries of the world, there are environmentally vulnerable; they will suffer droughts, they will suffer water stress, they will suffer massive pollution, they will suffer extreme events of massive typhoons and so forth, and they know it. so asia's going to have to take the lead; asian leaders say, 'you know, it's not fair, the us is in per person terms way ahead of us in environmental destruction.' and in fairness, there are absolutely right about that; the united states needs to do more. but we have to understand that you can't use that as an excuse because in the end if we go over the cliff, and everyone says 'woooooooah, we're collapsing, but they should have done more!' that's not going to be an answer either. >>reporter: these rising food prices that we are seeing...

everybody talks about it. in a nutshell, how would you say what impact does it have on the lives of so many people? >>the rise in food prices are a huge threat of course because some of the world's poorest people arefood deficit households; meaning... even if they're farmers they are actually buying food part of the year to make up their needs. we have to help smallholder farmers become food surplus households, then these rising food prices work for them; rather than against them. so one has to take a holisticview of things; now if we don't have a holistic view that links energy, food, and poverty alleviation as well as protection of habitat, we're not going to make it. >>reporter: i wanted to ask you finally about the uprising that we're seeing in the arab world and the instability going on. is that at all linked, do you think, to the global food crisis? >>now when you look at egypt and tunisia and some of the other countries;

the first thing you see isdictators that overstayed their welcome because they've been there for decades, that's the first thing to say. but it's also true that high food prices this year for food importing countries like egypt, the largest single wheat importer in the world, egypt, was certainly part of the tinder which led to a lot of this unrest. and though egypt through its social policies kept some bread prices down,other pasta prices and wheat based products definitely saw rising prices, rising tension, rising social insecurity and social instability. this is a phenomenon that is going to roil the world unless we get ahead of it. and for those who believe that military approaches...whether in libya, or afghanistan,

or iraq, or not so secret 'secret' war in yemen, somehow can solve this problem; they are making a serious mistake. all the war in the world is only going to exacerbate this hunger crisis. of course what we need is farmers that in a stable environment can plant high yield crops and get the support that they need to earn their livelihoods and help feed their populations. we need a different approach; peace will come through sustainable development; and this is the absolutely the most vitalrealisation that we need to make in the world. >>reporter: still to come on world business... >>from a war torn country on the brink of starvation to stellar success, we look at the rise of vietnam >>and competitive climbing is not hanging around in its quest to attract new fans. >>scaling new heights... and the rest in just a moment

on world business... >>25 years ago vietnam started reforms to move the country from a planned economy to a socialist oriented market economy. reforms that have transformed both the country and the lives of its people. >>reporter: every morning for thousands of vietnamese, the day begins in the traditional way with a steaming bowl of pho, noodles in beef broth. >>the dish is served up in side streets and doorways for less than a dollar. but a new breed of young affluent vietnamese are willing to pay double that for more upmarket surroundings. >>we gave the customers, people more options, you know like more modern look

and modern service, youknow modern lifestyle eating culture. but it's going to be replacing traditional way of eating pho;i think the traditional way is so beautiful, so they both survive the modern and traditional way. >>reporter: the firm is doing well, with 78 cafes across asia. its success is symbolic of the modernvietnam, with its rapidly expanding middle class, which has increased from 28% of the population a decade ago to 64% in the cities today. it's a change felt across the retail sector. >>the vietnamese between 20 and 30 years old now, they're just different from how i see when i was 20 and 30, they have no. it seems like they have no - they don't look

far, they don't live in that mould where, you know, our parents used you live where you have to save, save, save because you never know what's tomorrow, you never know what vietnam's going to become tomorrow, they seem to be much more free spirited >>reporter: it's a young country, 60% of the population are under 35. there's also a new generation of middle-class vietnamese, educated at universities in the west who have now returned home, bringing an international mind-set and capitalist dreams to this socialist-orientated market economy. >>people like henry nguyen, a harvard graduate, who heads a venture capitalist company in ho chi minh city. >>i guess i'll co-opt a phrase from the clinton campaign, it's the demographic stupid, you know, like it's this is a young up and coming country, people here are very ambitious, very optimistic, very hard working and because of that you basically have a country really that is literally

on its way up, it's growing up right before our eyes, i don't consider myself that old of a person but 70% of the population is younger than i am, and that makes me kind of a grey hair here somewhat prematurely... >>reporter take this internet technology company. >>the average age here is 28; they're designers, programmers, and marketing >>the ceo was a former champion gamer, who successfully bet on vietnam's young workforce & hungry consumer habits. >>we've seen things happening in the last five years and we say, like, you know, with internet coming in, with technology being introduced to people we could become the brain of the world, i mean competing with the best brand out there >>reporter: the country aims to have achieved fully developed status by 2020, an ambitious goal, butone that looks achievable. the main exports may still be basic products like textiles, crude oil, rice and coffee, but they provide a strong economic backbone to a country still expanding rapidly.

>>i think the pace of growth in vietnam is quite good, with almost 7.2 percent of gdp growth for over two decades continuously. and even during the crises in the world and in the region vietnam could still maintain some positive growth, and i think that is quite good. of course we want to see the country develop faster in future. >>reporter: that now seems to be happening, especially in the major cities like hanoi, ho chi minh &danang where growth can be seen everywhere. >>one example is the bitexco financial tower. >>it is 262 metres high with vietnam's first helipad at the 52nd floor...defying gravity on the sideof the building. >>this us$270 million investment was constructed entirely with vietnamese money and ambition, the vision of self-made businessman, mr vu quang hoi. >>prior to this construction project, i felt a strong

desire that our generation has to do somethingsignificant to change our country for the better. i asked myself what should this symbol of power be? i decided it must be a sky-high building, which looks fantastic and can clearly demonstrate power >>reporter: power the country clearly has, but vietnam, despite its strengths lies in a fiercely competitive region. its proximity to china laos and cambodia is a handy strategic location, but its stellar growth must be compared to even brighter stars in asia. >>reporter: competitive climbing is a relatively new pastime. the sport only really acquired a foothold in the public consciousness in the late 80's. today however, it's able to support a world cup circuit spanning 4 continents, and as the competitive side of the sport gains traction recreational climbing facilities are also chalking up some impressive results... >>reporter: sunday in milan.

some enjoy the town centre...others retreat to the city's parks. everywhere...people soak up the sunshine and relax.... >>well...not quite everywhere... >>this is speed climbing...one of three specialty events on the sport climbing world cup circuit >>we've also got two other disciplines of climbing that we have a world cup circuit; one of them is bouldering..//..and then we've got the lead world cup .. >>reporter: sport climbing has only had an international federation for 4 years...but today it has 76 member countries...which provide hundreds of wiry wall monkeys, all competing in arenas easily accessible to the general public... >>a lot of the world cups get around 3, 5 thousand. some

of them the best attended one is probably in chamonix in france and they estimate about 15, 20 thousand per day there. >>reporter: there are now 20 world cup events stretching from europe to china, north america to the middle east...event funding is provided by local organizers...who in this case had to come up with around 200000 euros... >>of course the world cup circuit represents the sharp end of a sport that continues to thrive in a non-competitive sphere... >>pop down to this former pumping station in north london on a typical weeknight and such is the activity it seems as if the walls themselves are moving... >>during our peak periods we can expect about 420 to 450 visits per day... >>reporter: at 10am across town in west london things are rather more sedate

but over a year the earning power of both establishments is impressive... >>we're very busy on weeknights. you'll generally come in here and probably find 2-300 people. this wall generates a million pounds plus in income. >>our turnover is about 1.4m and that includes the climbing shop and the climbing wall and the cafe. >>reporter: but before you rush out and build a climbing wall and muffin stand in your backyard...it's worth considering that insurance payments are high, walls do need to be maintained to a safe standard, and remember, a static route gathers no customers... >>the customers demand varying routes constantly, so about every six weeks we have to change all theroutes >>our route setters are experienced climbers and they've climbed all over the world and they come here and they try to recreate moves that they've experienced climbing outside... >>we have ...about 4 to 5 routes per wall, so about 400 routes. we change about 80-90 routes per month.

>>reporter: look around...and you won't see any speed climbing going on... there's only one officialwall in the entire uk... and in fact the discipline is dominated by eastern europeans and russians... >>because while it's only just taking off in western europe... the first speed climbing competitionswere held in the former soviet union in the 40's... >>well that wall looks flat but in fact it's angled backwards so it hangs over the climbers making things even more difficult...and at all but one of the world cup events the course is exactly the same. and if you think you can cover 15m in less than 6.2 seconds... well you should give this sport a go because that is the world record... >>you need dynamic power in your arms and in your legs and also you have to have strong fingers. >>reporter: as a climber... covering the world cup circuit requires dedication... and money... in asport which doesn't exactly churn out

millionaires... >>there's a few handfuls of people are serious sponsored climbers. >>reporter: in terms of exposure... at this particular event the state television broadcaster covered the finals live... but that's something of a rarity... >>at the moment the main way we're getting our publicity through webcasting. >>reporter: so, as with many sports... the authorities see one key way to raise climbing's profile... >>the ifsc's goal is to get to the olympics. hopefully we'll be on the shortlist in 2013 for the 2020 games. >>it's the easiest to follow because its literally the starting gun goes off... two climbers race upthe wall and whoever gets to the top first wins. >>reporter: like climbers chalk... it can be gripping stuff >>from the falls... to the silent pre-race

pantomimes... >>they are mapping the route in their head. you have to do it like you are blind. >>the most important is here... inside... >>reporter: although incredible agility... problem solving abilities... and explosive strength are also rather useful if you wish to succeed in a sport not hanging around as it attempts to scale heights it's never reached before. >>reporter: that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.