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Last Updated: Friday, 29 December 2006, 21:56 GMT
2006: Business year in review
By Martin Webber
Editor, World Service Business programmes

Hong Kong
Businesses are moving from Hong Kong to escape the pollution

Energy prices and climate change were twin topics which cropped up regularly during 2006.

Drivers and airline passengers complained bitterly as the price of crude oil hit its highest level for 20 years, reaching almost $80 a barrel.

But oil prices slipped back again, to end little changed over the past 12 months.

The environmental impact of China's frenetic growth continued to be debated.

It has been the fastest industrialisation in history - the past six years of growth in China equates to double the total annual economic output of India.

That growth has taken close to 400 million people out of poverty in China, but pollution is getting worse.

Growth at a price

More and more business people are now moving out of Hong Kong to go to Singapore to escape South East China's smog.

A worker stands in front of containers at China's new Yangshan deep water port
The world wants China's cheap goods
Jim O'Neill, chief global economist at the bankers Goldman Sachs, believes the issue is being addressed by the Chinese government.

"I've noticed in the past year that the authorities have got dramatically more concerned about the sustainability of this growth from an environmental prospective," he says.

But environmental agencies in China have only a handful of people and local party chiefs don't take much notice of them when they want to provide more jobs and faster growth.

In just five years, China is expected to overtake the United States as the world's biggest emitter of the global warming gas carbon dioxide.

Green pressures

The climate change issue continued to be much talked about, without anyone coming up with effective policies to tackle it.

Companies spotted an increasing public relations advantage in announcing they were "going green" while European governments announced they wanted to deal with rising emissions but still pushed ahead with plans for expanding airports.

Meanwhile, the British entrepreneur, Sir Richard Branson, said he was now very worried about global warming but insisted he wasn't going to sell his most profitable venture - his transatlantic Virgin airline.

He argued that flying long distance could not be stopped as it was vital to economic growth, but new airline practices could allow air traffic to grow without destroying the planet.

Sir Richard said he wanted to change the way planes move about on airport runways and wanted more money spent on better air traffic control systems.

But Jeff Gazzard from the Green Skies alliance, a pressure group that wants to crack down on air travel, said he did not believe the numbers.

"Richard Branson has obviously had an idle moment on a train and has sketched these out on the back of a fag packet. Civil aviation worldwide emits about 600 million tons of CO2 - that's slightly more than the entire UK economy," he says.

Old guard falters

Lego bricks
Lego has moved production to cheaper countries

The collapse of Enron five years ago rocked confidence in American business and led to sweeping new regulations. The two top men at the former US energy giant were found guilty of fraud.

Kenneth Lay never went to jail - he died of a heart attack a month after the verdict, while Jeffrey Skilling began a 24-year prison sentence.

There was more trouble for the old guard of the US motor industry.

Ford announced 30,000 jobs were to go and 14 factories were to close in the next six years.

"These cuts are a painful last resort and I'm deeply mindful of their impact," said Bill Ford, the great grandson of Henry Ford who founded the company in 1903.

"They're going to affect many lives, many families and many communities."

Entertaining gains

Away from the manufacturing gloom, overall the US Stock market had a healthy year, gaining 15%.

It was technology that once again set pulses racing - a company with just 70 workers was sold for a staggering $1.65bn.

The outfit snapped up was a video-sharing website, called YouTube, which hosts files ranging from TV shows to home movie clips.

YouTube claims clips on its site are viewed 100 million times every day.

The company that bought YouTube was Google - the search engine which floated on the stock market just over a year ago.

Tradition maintained

Staring at computer screens may have a certain fascination, but that's nothing compared with the time spent slotting together plastic bricks.

The Lego brick has filled countless happy childhood hours since it was invented in Denmark in1949.

In the past year, Lego announced it was moving most of its production from Denmark and the US to Hungary, the Czech Republic and Mexico.

Chief executive Jorgen Vig Knudstorp says Czech staff cost only 20% of those in Denmark, but he insists the family owners are determined to hang onto the iconic Lego brick.

2005: Business year in review
30 Dec 05 |  Business
China growth forecasts rise again
06 Sep 06 |  Business
Are the skies turning green?
19 Jul 06 |  Business


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