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Tensions High Between Japan, China; New York's Bed Bugs

Aired September 20, 2010 - 14:00:00   ET


MAX FOSTER, HOST, QUEST MEANS BUSINESS: How the dragon roars. A fishing trawler dispute puts China and Japan in economic deep water.

Helping thy neighbor? Developed economies are finding it harder to do so as their debts spiral.

And New York's $500,000 itch; we'll tell you everything you need to know about bed bugs.

I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.

Hello to you.

What started as a minor incident at sea is now a major diplomatic dispute between Asia's two economic titans. China is tonight warning it will take, quote, "strong countermeasures against Japan" if it doesn't release a Chinese fishing boat captain. His vessel collided with two Japanese patrol ships, or boats, earlier this month. But a spat is now going beyond the seas with many fearing it could have regional, even global, implications.

There have been small protests in China because of Japan's decision to continue to detain the captain. Some Japanese companies fear the protests could lead to boycotts of their products. Japanese companies are heavily involved in the Chinese markets, selling electronics, cars and other goods.

Well, a two-way trade between Beijing and Tokyo is in the $10s of billions and economic experts on both sides don't want to see the countries close business links being eroded. CNN Senior International Correspondent John Vause looks into the background behind this dispute.


JOHN VAUSE, CNN SR. INT'L. CORRESPONDENT: Relations between Beijing and Tokyo now appear to be at their lowest point in years. It got a lot worse over the weekend when a court in Okinawa, Japan ruled that the captain of that Chinese fishing trawler will be detained for another 10 days while he is questioned by Japanese authorities who are investigating a collision between his boat and two Japanese patrol ship in a disputed part of the East China Sea.

The reason why that has causing so much concern here in China is because the captain is being dealt with under Japanese domestic law. It is being seen, in this country, as an attempt by Japan to extend their claim to a disputed part of the East China Sea, which China also believes it has sovereignty over. So as a result China has now suspended ministerial contact with Japan. So talks on expanding aviation routes and cooperation on coal. And there is warning on further so-called strong countermeasures to come.

And a statement from China's foreign ministry reads, in part, "The Japanese bear full responsibility and should immediately and unconditionally release the captain. And Japan shall beer all the consequences that arise."

The Japanese embassy here in Beijing told CNN, on Monday, that the ambassador has spoken by phone to China's deputy foreign minister. And he urged China to quote, "Act calm and cautious and to avoid making this situation worse."

John Vause, CNN, Beijing.


FOSTER: So are tensions between China and Japan likely to escalate and how is the situation likely to play itself out. I put that to Linda Yeuh. She is a fellow of economics at Oxford University.


LINDA YEUH, ECONOMIST, OXFORD UNIVERSITY: It is getting more tense. China has always been very sensitive about its sovereignty claims, but this particular spat with Japan comes on the back of another territorial spat in the South China Sea. Over disputed territories in which China is arguing with Southeast Asian countries. So there does seem to be a burst of activity around territorial claims made by China. And some view it as just a reflection of the fact that China is now the world's second-largest economy. And feels more assertive on all matters.

FOSTER: So economics is very much a part of this because China's power has grown via it's economy. Japan has always been the big power in that region. But also it is about economic resources, as well?

YEUH: Oh, yes, absolutely. So in this particular dispute with Japan it is over a stretch of water encompassing what the Japanese call the Senkaku Islands and what China claims at the Diaoyutai Islands. But what is important, I think, about this strip of water is that it potentially has gas and oil reserves, which could be equal to a fifth of China's proven reserves.

Now, of course, China and Japan back in 2008 agreed to jointly explore the area. But there is no question that the Japanese detention of a Chinese fisherman just highlights the fact that the agreement they reached a couple of years ago probably wasn't all the satisfactory, really, to either side. And China very much wants to claim the strip of water.

FOSTER: And it is getting tougher and tougher and more and more powerful. So the longer this lingers, the tougher probably China is going to get. And as you explained to me earlier, Japan's got this pacifist attitude. So it is not going to want to come up, militarily, against China.

YEUH: No, it doesn't. And, in fact, what Japan is likely to do is to revert to U.S. support. So we always have to think of the Asia Pacific Region as having another power, which is, of course, the world's biggest economy, the United States. And in fact, I would extend it beyond the China-Japan dispute.

So, the United States thinks that China has what they call a string of pearls policy, where China is asserting sovereignty all around this territorial waters. Not just in the East China Sea, with Japan, but in the South China Sea, reaching all the way to the Persian Gulf. Because what China is seeing is waters which pertain to transport lanes, vital for them to deliver commodities and shipping and traded goods.

Whereas all the other countries in this area are just very wary of rise of China, which of course is not a democratic state. And they are turning to the U.S., and the U.S. had neglected the region, some would argue, for sometime, under the Bush administration, because of focus on Iraq and Afghanistan. But increasingly the Obama administration is being much more active in Asia and asserting its place. I think as a counter balance to rising Chinese power.


FOSTER: Linda Yeuh speaking to me earlier. Now a blue print to end poverty, the world's leaders gather at the United Nations, in New York, to discuss progress made towards their millennium development goals.


FOSTER: Tonight world leaders are facing up to a $20-billion IOU made out to the poorest people on the planet. The United Nations says the world's richest nations are skimping on their aide commitments and it is putting attempts to solve hunger, child deaths, and disease in jeopardy. And $16 billion of the annual shortfall is owed to Africa. Leaders are gathered at the United Nations in New York, as we speak, and they are talking about their Millennium Development goals. And it is 10 years since these eight goals were set. They include an ambitious target to half extreme poverty by 2015. Richard Roth is following the action at the United Nations.

Richard, the question is will there be action or is it just words?

RICHARD ROTH, CNN SR. UNITED NATIONS CORRESPONDENT: Yes, a frequent question of those of us here at the United Nations. There have been some portions of these eight Millennium Development goals that have been achieved. But they only have five years left to make some big inroads in some major areas such a poverty reduction, environmental approval, child/mother mortality indexes.

Here at the United Nations speakers have been coming to the rostrum all morning to echo the call, that there is a need to approve funding to achieve these targets, major promises made 10 years ago. The goal is to do some good will and good work by 2015, but analysts will say that many of these targets are far away from being completely hit.

The Spanish prime minister, addressing the General Assembly, talked about the need for achieving these Millennium Development goals.


JOSE LUIS RODRIGUEZ, ZAPATERO, SPANISH PRESIDENT (through translator): Countries must keep up the effort and there attentions to the struggle for development, despite the crisis. The crisis may account for a slowdown in some of the efforts we have undertaken, but that will be a temporary stage.


ROTH: Look, different leaders have different proposals. Bolivia's leader saying there should be a new bank for developing countries in the South. Too much of the undeveloped resources are going towards the major banks and countries in the North. The French leader, talking about taxation, again, echoing a theme he has talked about for years; a need for maybe a financial transaction tax. And he also announced more funding for the Millennium Development goals fight.


NICHOLAS SARKOZY, PRIME MINISTER OF FRANCE (through translator): We don't want to reduce simply, or even just stabilize. What we are going to do is increase our contribution by 20 percent. The crisis is very serious for developed countries. There are deficits. But the crisis has much more serious consequences for poor countries. And so we have no right to do less than what we have decided to do.


ROTH: One other idea proposed, besides financial transactions and other banking ideas. The leader of Bhutan, here at the United Nations, said there should be a ninth Millennium Development goal. And that should be happiness.

Max, maybe by 2015, everyone will be happy, if they are not living in poverty.

FOSTER: I like that idea. It is what it is all about at the end of the day, Richard. I'm going to support Bhutan on that. Not that I've got any power. Thank you very much.

Now at a time when there is very little spare cash to go around, struggling countries in Europe are getting a boost. Europe's fundraising body has just received gold standard from credit rating agencies. It is called the European Financial Stability Facility, and it is rated triple A by the top agencies. So it is cheaper to borrow than individual members can alone. So, some progress there.

Greece is delaying banks stress tests, meanwhile. The government says the test would be pointless because of close scrutiny by the EU and the IMF. It is concentrating instead on refinancing debt. But the government says the two things aren't related.

And in the U.S. economists support cuts but not spending cuts. They want tax cuts. A new survey found economists in favor of extending Bush era tax commitments for all, including the richest Americans. And Obama favors removing tax breaks for the rich. Income tax rates are due to go up on December 31, unless Congress acts.

And that is in stark contrast to here, in the U.K., where the government is about to announce the details of some of the deepest spending cuts in a generation.

Well, in Britain the government is getting a bit of advice on where to spend and where to save. Courtesy of the Confederation of British Industry. That is one of the bodies which represents business here in the U.K. the CBI is telling the government to focus its spare cash on things that foster economic growth. Things like infrastructure, especially transport, which it calls knowledge assets. And also human capital.

Richard Woolhouse is the head of tax and fiscal policy at the CBI. He told me it is possible to save money and still promote growth.


RICHARD WOOLHOUSE, CONFEDERATION OF BRITISH INDUSTRY: The key thing is to make those choices in a smart way. Obviously, in terms of transport spending and public sector investment, I mean, our target is that share of GDP should be returned back to where it was, 2.25 percent, as soon as possible.

But within different budgets, we think there is money that can be saved. We think that there is plenty of scope for more efficient delivery of public services. We think there is also scope to address some unsustainable elements of government liabilities, in particular pensions. And thirdly, we think that welfare should be-welfare spending should be targeted on those that need it. So there is scope for the government to save money in a number of areas. And therefore ensure that we don't damage investment spending on the areas that are vital for economic growth and prosperity.

FOSTER: And you are coming directly up against the message that we are getting very clearly from the unions and the public sector, which is, you have to keep funding those public sector jobs and welfare shouldn't be the focus of the government as it seems to be right now. Actually we should be focusing on keeping the public sector, keeping jobs going. And your counter argument to that, effectively, how are you going to win that argument?

WOOLHOUSE: Well, I think in terms of the overall spending envelope, what we saw in the emergency budget back in June, were the right decisions in terms of the aggregate adjustment in the public finances and the pace of that adjustment. The important thing to note about that is that the public sector finances will be adjusted by constraining spending, rather than damages taxes.

FOSTER: Which will lead to strikes, which will affect your businesses?

WOOLHOUSE: No, I think that the important thing to note is that in aggregate, public sector spending in real terms is broadly flat over the next four years. The adjustments that are being negotiated in this spending review, are over the medium to long term. So departmental spending is going to be cut by 13 percent in real terms, over four years. That is about 3 percent, plus, a year.

Clearly there are some areas of non-ring fence (ph) spending, which will be badly hit. But the government needs to be very careful in the way that those cuts are implemented. So that we ensure that the private sector can step in and take over the baton of growth.


FOSTER: There we are. Now, we'll head to Wall Street where stocks are solidly higher. Mostly thanks to the official news that the recession in the U.S. has been long over. Alison Kosik is standing by at the New York Stock Exchange with more on that.

Also some corporate news which will help things, right?

ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: Exactly, Max. You know the recession, we found out today, has been over more than a year now. That is according to the National Bureau of Economic Research. That is the organization that is in charge of calling recessions and expansions. And they say the recession began in December of 2007 and ended in June of 2009, making it an 18 month recession. And that is actually the longest U.S. recession since World War II. And since then the U.S. economy has grown, although, many on Wall Street would say it is not growing fast enough, you know, at a strong enough pace.

Now (AUDIO GAP), today also puts an end to that prolonged double-dip debate. The group says that any future downturn in the economy will be a new recession and not a continuation of the recession that began in December of 2007. Now it has stocks up right now, we are rallying all three of the major averages are up solidly.

You know, one to watch, that we are keeping an eye on, Linear Homes. That surging about 9 percent, Max, on some really strong earnings from the homebuilder, Max.

FOSTER: OK, so the recession is over. It has been over for a year. That isn't much comfort to people losing their jobs. But just explain the economics here, Alison. Because this is fairly normal isn't it?

KOSIK: Yeah, sure, a lot of people will say, oh, it has been declared that the recession is over, but you know, at home we really just don't feel it. But here are the facts, the technical facts. Unemployment stayed low through most of the actual recession. And, in fact, it didn't peak until after the recession ended. Unemployment, of course, is this lagging indicator, but most Americans won't begin to feel like the economy is back on track until the jobs come back. Now even with the jobs recovery kind of moving very slowly traders, at least today, are feeling more confident, as you can see in this rally that we're having, Max.

You know, usually, before a Fed meeting and a policy statement, which is happening on Tuesday, it is usually a quiet day for the markets. But traders are especially focusing on a critical support level of S&P 500. They have been watching it really closely for the past week now. Right now it is sitting at 1138. The sort of support level is at 1132. And traders are really watching it today because if it closes above 1132, Max, traders think that stocks could continue rallying, just like we're having this really strong rally today, Max.

FOSTER: Here we go again, Alison. Thank you very much indeed.

That U.S. rally helped Europe as well. The region's main indices all posted a strong finish. Energy stocks got the boom started. Crude prices rose. And markets are looking ahead to Tuesday's Fed meeting on interest rates.

Now the green revolution, Cairo style. We'll show you how Egypt's capital transformed a rubbish dump into a urban retreat, and scored a break through in its quest to be a "Future City".


FOSTER: Now London has its raw parks, New York has Central Park, now Cairo, has Asapar. Richard Quest looks at how the largest city in the Arab world is joining the green revolution as it transforms into a "Future City".


RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS (voice over): Chaotic and claustrophobic, always intoxicating. Cairo's vibrant streets churn out a rich tapestry of colors. But green is not amongst them.

(On camera): In a city as crowded as Cairo, it is pretty difficult to escape from it all. Which is why the park developed over there has become such a symbol for improving the quality of life here. The Azare (ph) Park opened in 2005, more than 650,000 plants and trees have transformed this hillside, that hat remained a wasteland for the best part of the millennium.

DINA BAKHOUM, AGA KHAN TRUST FOR CULTURE: If you think about the location of this park, 25 years ago, or even more, for centuries, this was just a dumpsite. It was completely neglected and suddenly it was transformed into a green space.

QUEST: It's a project of the Agakan (ph) Trust for Culture. The origins of the Azare park date back more than two decades; 2 million visitors a year now visit this oasis, in Cairo's urban jungle. It has become a case study for change. Sewing the seeds of a green revolution within government walls.

UNIDENTIFIED MALE: The ministry of environment's plan is to expand that green area. We plan to have 100 kilometers of green built around greenbelt around Cairo. Also we have in the new vision of Cairo, which is at 2050. To expand the green areas and to have more walks like the other walks, inside the city center.

QUEST: Much more than a green space, the Azare Park was always designed for the higher purpose of urban regeneration. It sits next to the Dabarl Akbar (ph), one of Cairo's poorest neighborhoods.

BAKHOUM: The area of Dabarl Akbar (ph) is part of actually historic Cairo. Historic Cairo covers a very large area. The site of the park was chosen because it is actually in the heart of Cairo. And it has a very interesting and unique view of the historic Cairo. And the neighborhood of Dabarl Akbar (ph), which is an area very rich in culture and heritage. Yes, poor, socially and economically.

So, the idea was to create a park, a green lung, for Cairo, that would serve also as a catalyst for a number of social and economic activities, as well as cultural activities in the neighborhood of the Darbarl Akbar (ph).

QUEST: All sorts of welfare projects have followed in the wake of the Azare Park, targeting the quality of life for the 200,000 resident of the Darbarl Akbar.

The restoration of old mosques and monuments has also provided job opportunities for local craftsmen. Added to the UNESCO World Heritage list, historic Cairo is a treasure trove of Islamic and medieval architecture. There is no greater symbol of this rich heritage than the Ayubid (ph) Wall. A stone membrane bisecting the Azare Park and the houses of the Darbarl Akbar.

BAKHOUM: The historic Ayubid Wall is one of the landmarks of Egypt. It is one of the landmarks of Cairo, so on the western side of the park, the western slopes had to be adjusted in the landscaping, so that the stretch of 1.5 kilometers of the historic Ayubid Wall could be excavated as much as possible. So, in some parts we were able to excavate them fully, up to a height of 15 meters.

BAKHOUM: We're now standing at one of the historic gates of the historic Ayubid Wall, called Beba Machru (ph), it is one of the old gates of Cairo. Where we are standing here is actually an important point for us, because it the length between the Azare Park and the Darbarl Akbar area. So encourage people visiting the park to go and explore the area of Darbarl Akbar, and vis-a-versa, to facilitate for people from the community to easily access Azare Park.

QUEST: The Azare Park has reignited a passion for a way of life, long lost to Cairo's urban sprawl. It inspired monumental change in a neglected neighborhood. So what price then, a green haven, in a city like Cairo? The answer lies on a hillside overlooking the Darbarl Akbar, in the cluster of the houses below.


FOSTER: And on next week's "Future Cities", satellite cities, Cairo's got more than it can handle. We'll see how Egypt's capital is reigning in its urban sprawl.

BP may have killed the well but challenges remain. We'll look at the disasters legacy for the oil giant and the environment.


FOSTER: Welcome back. I'm Max Foster in London. More QUEST MEANS BUSINESS in just a moment, but first here are the main news headlines.


FOSTER: The complex political landscape emerges after Sunday's election in Sweden. The ruling (inaudible) rights coalition has won another term, but it doesn't have the majority and the far-right Sweden Democrats have won a place in the National Parliament for the first time.

Prime Minister Fredrik Reinfeldt has (inaudible) not to cooperate with them. He says they have until October to announce his government.

Many Afghans were denied the right to vote in the parliamentary elections over the weekend. That's according to an independent watch dog group. They have already been hundreds of complaints about widespread fraud and intimidation, but the group said, the relatively high level of voters participation was a positive sign. Ballots are still being counted.

Another chapter in the ongoing Cricket corruption controversy. Pakistan's top Cricket official reportedly told the Indian television station that England players took money from gamblers to fix the results of a match last week.

But (inaudible) did not produce any proof and later back track saying that he was merely quoting bookies. England's national team is probably denying the allegations of match fixing.

Tonight, a sense of relief for an embattled oil giant, BP's stock was on the rise today after U.S. officials confirm (inaudible) well in the Gulf of Mexico is effectively dead. Effectively dead, there seems to be many closures to this.

BP shares gains 2 percent in Monday's London trading (inaudible) so investors here has posted, but the stop has been (inaudible) since the April 20th explosion of the deep water horizon rig has found 37 percent since April more than $70 billion wiped off BP's value - market value.

BP has spent a total of $9.5 billion in the overall cleanup operation. Breaking it down, the oil giant says it's paid out $1.6 billion in claims of government payments, compensation for business hit by the disaster.

The payout rate is reportedly soaring since independent administrators took over control of dispensing those funds. BP's own investigation says contractors TransOcean and Halliburton share the blame though.

Changes at the top, Bob Dudley takes over as chief executive on October the 1st. He`s the former - the former CEO rather Tony Hayward moves to all the duties, but thus stay with the company.

BP's dividends suspended for the first time in 18 years and that's under - because of all the political pressure they received in the Unites States probably.

Now, even though BP has killed the well, the U.S. government's point person on the disaster says it's legacy lives on.


ADMIRAL THAD ALLEN (RETIRED), GULF OIL SPILL RESPONSE COMMANDER: We have detailed plans that we've negotiated with the states and the parishes in Louisiana to determine if you will how clean is clean.

And in some areas, we're going to stay with us for quite a while. Though the marsh areas in Barataria Bay for instance is down by South Pass still have oil in them and we still need to work on it.

And some of these places, we're just going to have to negotiate. We agree there could be nothing further could be done and we'll say that's it. But right now, we're still at it.


FOSTER: Now listen to (Mike Lanzone). He owns (Tomcat) fishing charters and custom vacations that's on the U.S. Gulf Coast. He says it's getting very, very tough. Getting a claim processed. We're going through that process with him now. He joins us from Florida.

Thank you so much for joining us. Just explain what sort of compensation you've applied for and what you have to do to make the application?

MIKE LANZONE, OWNER, TOMCAT FISHING CHARTERS: Well, on the Tomcat side, which is a charter booking service for - representing about some 20 fishing boats and then on the custom yard side, it's a cruise ship, dinner cruise for anniversaries, weddings and special events.

We have two separate claims. We applied in April. As of yet, we've not got a resolution. We've have gotten a couple of small checks. As of this morning, our - after the transition to Gulf Coast claims facility, we're still under review a month later.

FOSTER: OK, so what did you applied for and what you've got so far?

LANZONE: Well, the two separate claims, one is for under $100,000 and one is over $600,000 and on the first claim, we received about $9,000. On the second claim, we've received about $40,000.

FOSTER: And this is an absolutely mega job isn't it in terms of paperwork. Just explain what sort of process you've had to go through just to get that small amount of cash as you call it?

LANZONE: Well, originally with BP, they have asked for numerous documents. Everything from all of our tax returns, for all of the corporations even ones who we weren't filing for to Coast Guard regulations, insurance certificates, lease agreements. Just mounts and mounts of paper. We have submitted over 1,100 pages of documentation on these two claims.

FOSTER: So why do you think and what the explanation for the fact that what you've received is so much less than what you've applied for?

LANZONE: According to BP when they were in control, the claims have been approved on three separate occasions. Apparently, when they sent the claim - the check request off to KPMG, the check writing company, they sent e-mail or faxes I don't understand.

Now the Gulf Coast has taken over, they're saying that there's so much documentation. They're having a hard time getting through it and as of this morning, we have received e-mails last week. We've sent hundreds of e-mails to them.

We've received the e-mail that said it should have been resolved by the end of the week and as of today, it's still not resolved.

FOSTER: There must be - to their credit a huge amount of paperwork goes through and they do have to go through it in some detail. But do you think they're in some way acting on fairly?

LANZONE: I'm not exactly understanding what their methodology is. I know that they have - they say they have 30 claims adjusters where BP they have hundreds. With BP processed - although it was - it was time consuming and difficult, we were able to talk to our adjusters and work things out and deal with questions and resolve the issue.

Where as with the Gulf Coast facility, we cannot get a hold of an adjuster, we're not allowed to talk to anyone and while the people that answer the phone are very cordial, they have no idea what the status of my claim is.

FOSTER: OK, and - what does this actually leave as far as your business is concerned? How difficult is it getting on with things while you're dealing with all of these paperwork in admin?

LANZONE: Well, these are - both of them are small corporations. The custom (inaudible) start up corporation so in the oil spill we were hit on two fronts. One, the tourism industry during summer, which we lost because the oil was flowing in and people were nervous.

And the second one being the corporate weddings and anniversaries and then group events that typically happen in the fall and the winter and the spring, people would not book them for fear of unknown - of what the oil spill was going to do.

FOSTER: And how would you assess the general damage to business there because of the process of having to do this paperwork and go through for these - you know, you're having to go through all of these time consuming effort. How much damage is that doing to business there?

LANZONE: Businesses is down. When the oil was flowing, the Tomcat business was completely shut down because, of course, it had to do with fishing and the fishing boats, and they were not allowed to go in the Gulf. So they completely shut down that one.

On the yacht and the corporate side, we were not - they were no tourist coming because they were fear that there were oil in the beach or they didn't know what the hazard of these dispersants. They were just afraid to come to Florida.

So we lost the tourism industry there and by default, we lost all of the fall and winter business, which are typically the corporate and the weddings and the anniversaries and the holiday parties because of uncertainty of where the oil would be.

FOSTER: OK, Mike. This is tough time for you and good luck with it all. Thanks for joining us on the program today

It is exactly five months to the day since the explosion on the offshore rig, but of course, that oil spill is the worst in American history that changed BP and the U.S. Gulf Coast as we've been hearing further.

CNN April Williams tells us the focus is now firmly on repairing the damage.


APRIL WILLIAMS, CNN STUDENT NEWS: Gulf Coast, after months of frustration in the region, U.S. officials say an oil well blow out that polluted marshes, killed wild life and stained beaches has been permanently plugged.

Workers spent the weekend pulling out the pipe used to pump the cement that sealed the well shut. An estimated 4.9 million barrels escaped into Gulf waters during the disaster before the flow was contained in late July. John Wright is a contractor who worked on the project.

JOHN WRIGHT, CONTRACTOR: When we drilled into it, there was no sign of hydrocarbon in the (inaudible) so that means it's unlikely that there was oil flowing up at the back side of the casing.

WILLIAMS: Forty miles off the Louisiana coast, an explosion in late April on the oil rig deep water horizon killed 11 people and unleashed the worst oil spill in American history.

Intense national and international attention on the story is spreading up with the microscope on energy company, BP, the well's owner to clean up the disaster.

WRIGHT: The amount of press focus absolutely is - probably the most different from the previous projects we've been involved in.

WILLIAMS: President Obama held the sealing off of the well, but said the government will continue to work in the region to repair economic and environmental damage from the disaster.

I'm April Williams reporting from Atlanta.


FOSTER: From the time (inaudible) can do, we'll be talking about the goods that companies can do. We're going to be talking about corporate philanthropy next on the program and why companies should stick at it according to one executive.


FOSTER: So many names and many firms have thought corporate philanthropy onto the back burner not so Puma, chairman and CEO, Jochen Zeitz is in London to help launch "Peace Day," the U.N. International Day of Cease-fire and Non-Violence.

I caught up with him and began by asking how he had changed the way his company views and does business.

JOCHEN ZEITZ, CHAIRMAN AND CEO, PUMA: I believe in business has a force for good. You know, business has an impact on society. Of course, it creates job. It creates prosperity, but on the other hand, we also leave a negative footprint behind.

Whether it's an environmental and sometimes even social one and we believe as a company, we can also contribute to what sustainability not just from a commercial point of view, but also from a social environmental point of view.

And that's why we have a lot of initiatives that we're supporting globally whether it's in our social and environmental platform, whether it's promoting peace or just creativity by supporting documentary filmmaking and creative networks.

FOSTER: Just give us a sense of latest project for example. It involves football and it's a vast initiative and very expensive for you to do. So just take us there.

ZEITZ: Well, September 21st is the official "Peace Day." It's actually the day that was sanctioned by the United Nations in 2001. Thanks to the initiative of Peace One Day and Jeremy Guilley (ph), who has done a tremendous job to make September 21st the official "Peace Day" in the world.

And we felt that football was a great opportunity in order to really spread the message of peace around the world. It's the number one sport in the world and just like the idea of the Olympics back then to contribute to its peace and friendly competition.

We felt that football was a great carrier for positive message and so we are playing over 3,000 football matches under the one day, one goal umbrella globally in every single U.N. member state that's in 192 countries.

And it's really growing every year. We started with 400 matches, now we have 3,000 and the sky is the limit.

FOSTER: It's interesting because you mentioned the United Nations and being discussed the United Nations right now, governments are discussing how to cut poverty and there's something (inaudible) about reaching the so- called millennium goals because government haven't gotten as much cash as they had before.

And it's a saying for a lot of business as well. Why do you think it's important to keep giving even though the money coming into governments and businesses isn't there as it was?

FOSTER: Well, our mission as a company is to become a desirable - the most desirable sport lifestyle brand, but also sustainable company and brand.

And if you can only be sustainable in business if the social and environmental environment is healthy and therefore, we believe inherently in our business. We had a responsibility, but also an opportunity and as you rightly say governments have to cut back.

Businesses may have to cut back, but ultimately the old paradigm that politics have the rules and fund philanthropic initiatives and business create shareholder value and religion preaches values I think is over.

We really have to collaborate in partner in order to contribute to the greater good.

FOSTER: Jochen speaking to me earlier. We're going to have a look at the weather forecast for you. Now, we're going to focus on Europe because Guillermo says there are some interesting things going on here. Hi, Guillermo.

GUILLERMO ARDUINO, INTERNATIONAL WEATHER ANCHOR: Hey, Max. Two areas actually because it doesn't look that bad today especially if you look at the central part of Europe and October fest going on, and the weather is fantastic especially for the weekend.

And we're going to see here, one area developing in Britain then moving on into Scandinavia, the other one here in the south in Spain and also northwestern parts of Africa with some bad weather.

Britain, looking OK in the next two days especially in the south. We see some clouds and some rains. In Scotland, you see not so much, but the south is looking OK. France is also in good shape.

Most of Germany, fine. Also (inaudible) there in the north with some bad weather. Southern parts of Denmark also with bad weather, but Italy, fine. Here, you know, (inaudible) beautiful area here in Croatia into Slovenia looking fine.

The Atlantic Sea in general terms and also Greece, Turkey, coastal parts of the Mediterranean more than the (inaudible) looking fantastic. So this is a potential for the south.

In Spain all the way up to Barcelona, here Valencia including Valencia and then into Algeria and Morocco in northern sections. We may see some hail and some bad weather.

Another look for the next two days here in the east Med, Cyprus perfect, not much going on. You see some clouds here in the northern Turkey in the Black Sea apart from that fine.

Jordan in the clear. Syria in the clear too. Northern Egypt looking fine and then the temps. So we see 20s again, I'm surprised. I'm surprised. I felt that the cooling down process has started and it was at a point of no return.

But we see a little bit like 20s in London also in Paris. This is a perfect time of the year and a little bit cooler in the north too. OK, Hong Kong, you know why this is going on?

Because we have a cyclone there remnants of - well, it's actually a tropical storm. This cyclone made landfall first in Taiwan now into parts of China. It's moving towards the general direction towards northern Gwangju (ph) or north of Gwangju.

So we will see a lot of rain there. Actually those are the important things that we've seen lately more than winds, it's a rain event. Hong Kong is getting a lot of rain. The amazing amount of water that we got in Taiwan is in the thousands of millimeters.

So you see the trajectory of this system, Fanapi is going to continue to move there and Bermuda, you don't know bad at all. The cyclone actually too close to it, but now it's moving towards New Finland in Canada with winds, rain in high waist. Max -

FOSTER: Guillermo, thank you very much indeed. Now, just a story for you, some people live in their training clothes. One store wasn't too please though when it found something actually living the (dogs) themselves and (inaudible) and everything else.


FOSTER: And Nike's flagship store in New York is closed tonight because of some unwanted customers and they are bedbugs. The tiny parasites have left their traditionally sleepy surroundings for a more active lifestyle it seems in the sportswear store and it's not the first major business to be brought low by these mini-beasts. A lovely image for you here. I think you'll agree.

The bedbug is on the rise in the U.S. at least. Bedbug calls have increased by 81 percent since 2000 that's according to National Pest Management Association. A New York City officials have set aside $500,000 to fund this war on bedbugs. It's a massive, massive project.

It takes between 7 to 10 days to kill an infestation and that's a lot of lost revenue and it's causing untold problems of all sorts of different businesses particularly the retailers in New York. (Inaudible) at least one man who knows all about bedbugs is Timothy Wong.

(Inaudible) him a few months ago with his pest control business, M&M Environmental starts to take off in New York City. He joins us now from CNN in New York in the heart of Manhattan, of course, thank you so much for joining us.

First of all explain how big this problems become because it's taking out more of your work, isn't it?

TIMOTHY WONG, TECHNICAL DIRECTOR, M&M ENVIRONMENTAL: It has basically exploded in the past couple of years. I think that's because of the law of average. There are so many living in the United States and in the cities especially in New York City that people are having at a home and they're finding their way into commercial offices and businesses.

FOSTER: The population of people haven't exploded quite like bedbugs does so what's the drive there? What's causing this problem do you think?

WONG: I think that the main driving force is basically traveling, globalization. You know, we haven't had that bugs in this country for about 50 years after World War II and (inaudible) speaking - completely eradicate it because of the pesticide we've been using and less traveling.

And these days with more globalization and more traveling, people living closer together and bringing into the homes and to the neighboring units and into offices and into other, you know, areas where they work. And that's why it's something exploded in the past couple of years.

FOSTER: OK, so take a retail store, I know you've had to deal with a few of them. What sort of problem do you encounter when you get in there? What do you see? What point you called in?

WONG: Well, I think for the most part, a lot of the larger and more responsible commercial establishments are taking more preventative actions. Like for instance, bringing in dogs to help them do early detection and when they do something like this, they could protect the consumer in the beginning versus waiting for it to become an (inaudible) disaster.

I think a lot of the commercial offices and retailers now are realizing prevention is partly the key thing here and education, and that has changed dramatically about maybe probably two or three years ago.

We would be called in often because the stores have a bit a major problem. Today is not the case anymore. They would bring in dogs at a very early stage and they would do prevention. They would do early detection and they execute a strategy to protect the consumers.

That they probably wouldn't have done probably two or three years ago because they just didn't understand the problem and the extent of how bad it can get. So today is completely different.

FOSTER: What's the worst case you remember?

WONG: The worst case I remember - probably a case that I wasn't involved in where a store had it for a couple of months and probably close to a year and just ignored the situation and just waited and hoping that the problem would disappear.

And generally it doesn't happen by itself. It basically take prevention and takes - you have to be very proactive in looking for it and actually putting a (inaudible) place to make sure if something like this happens or it is detected, you can attack the problem immediately.

FOSTER: Yes, how do you attack it? What's the - if you've got a particularly bad problem in a store. It's been there a couple of months as you describe, exploded, how do you deal with it?

WONG: Well, whenever you're dealing with bedbugs, there are two components especially for store. The first is clearing the content of inventory. The second component is the structure and whenever you have a store where they have retail clothing or electronics or what have you.

They have to bring those items off site to be fumigated with some type of gas like sulfuryl fluoride or Vikane, which can kill both the bedbugs and the bedbug eggs. But there's a big undertaking to remove the inventory, to have it fumigated off site.

And then for the structure itself, conventional treatments don't work anymore. You have to do something a little bit eco-friendly, more advanced that will allow you to quickly knock them down such as Cryonite, which is instant freezing or maybe heat, thermoheating of the entire structure.

These are the kind of method and technology that you need today that can help you eradicate the problem quickly and safely. And a lot of retailers today are (inaudible) this type of strategy that's working very well for them.

FOSTER: Although the cover seems to imply that New York is under this infestation, this attack of bedbugs, but actually it's not that far from reality is it? Because once it's there, the extent that you're dealing with it now, you can't ever actually fully get rid of that?

WONG: No, it's just (inaudible) as you can never ever avoid catching a cold, but there are a lot of things you can do in terms of being able to avoid catching a major outbreak of a cold and that's what a lot of people and a lot of businesses are doing today.

Prevention programs, early detection, having a constant monitoring program and making sure if there is a problem detected, they immediately act on it and eradicate it and educate the employees and the consumer and I think that's how you control the epidemic.

And I see it's certainly improving. It's hard to see from your side or from the consumer or the public because they read about it in the newspaper. But from people inside the industry they can see how - like the hotel industry about three or four years ago, was very bad.

All major hotels would get infestations, but they are now instituting a protocol prevention program and now we don't hear about hotels as much anymore and I think the same thing is going to happen with retailers.

FOSTER: OK, well, we wish we luck in your work. Get rid of those bedbugs. Timothy Wong, thank you very much indeed for joining us from New York. After the break, we're going to have a look at the markets. It's been rallying somewhat today.


FOSTER: It's been a rally of sorts on Wall Street today after news that the - well, confirmation really that the U.S. economy has been out of recession for quite some time.

The S&P 500 has risen to a four-month high and as well the Dow is doing, it's up 1.35 percent. The question is, will it continue that rise?

Europe also enjoyed a rally ahead of Tuesday's big (inaudible) the region's (inaudible) all push higher to end with strong gains. Energy stocks led the pack. (Inaudible) the crude prices rose.

Asian markets, finished mix though. It was a fairly quite start to the week. The Shanghai (inaudible) 0.38 percent. Indian shares gained 1.5 percent similar to the Dow in the end. The (inaudible) higher since January rather 2008 and the markets in Japan were closed for a whole day. (Inaudible) to Wall Street in the coming hours.

And that is "Quest Means Business." I'm Max Foster in London. Thanks for watching. "World One" starts right now.