17/02/2016 BBC Business Live

This is Business Live from the BBC with Ben Thompson and Aaron

The China Conundrum - how to reform the world's second

largest economy without causing financial chaos around the world.

We'll assess what's at stake as China prepares for a new normal.

Live from London, that's our top story on Wednesday, 17th February.

We're taking a look at the latest moves by Beijing to try

and re-ignite the world's seconnd largest economy and the impact

that's having on investors around the world.

Also in the programme: Asia's biggest aerospace and defence

airshow is in full swing in Singapore.

We will get the latest buzz from the world's fastest

And as Iran says it will continue producing oil despite agreement

between Saudi and Russia to cut production,

we'll assess what markets make of the latest round of oil volatility.

We'll get the inside track on the cost of HIV.

The boss of specialist drugs firm Veev will be here to discuss

the work being done to tackle and treat the disease.

As Apple refuses to grant US police access to data

on the iPhone of a gunman who killed 14 people,

we want to know, should tech firms play a greater role in solving

and preventing crimes or would it be an invasion of privacy?

China is going through a difficult transition.

Gone are the days of rigid socialism and it's starting to open the doors

to more market-based economics of supply and demand.

It's now one of the world's fastest-growing economies,

a leading exporter and major overseas investor.

But the turbulent start to the year on global markets highlighted

After enjoying rapid growth for more than a decade,

China's economy grew by 6.9% in 2015, compared with 7.3% a year

earlier, marking its slowest growth in a quarter of a century.

The government is trying to shift the economy to one driven

by consumption and services, rather than manufacturing,

exports and investment in state enterprises.

But managing that transition has been challenging.

There are doubts about whether Chinese data can be trusted.

Critics say that real growth figures may be much weaker.

And at the same time, worries about the devaluing currency

Even though the yuan strengthened this week,

thanks to China's Central Bank governor breaking his silence

We hadn't spoke heard from him for six months.

The BBC's Tanya Beckett spoke to Dale Nicholls,

who manages a big Chinese investment fund for Fidelity,

and started by asking him, if he thinks the authorities

in China have coped with the stock market volatility well.

I think there is probably a learning process going on there. I have got

to be quite frank and say that overall I have been disappointed

with the level of intervention that we see in the market when things

started to correct and I think you could argue that there probably

should have been a little more oversight as the market was moving

up and we saw margin balances, you know, in the market really sort of

expand significantly. But, you know, I do think, you know, the overall

direction of the Government is towards opening up and reform and

moving to a more market been based economy. I do think, if you look at

things in the long-term, the progress that's being made and if

you look at the direction that is set in areas, the direction is set

for the long-term, it is about opening up and a more market based

type of economy. What sectors do you think benefit particularly from this

rebalancing that you're describing? Well, I still think really any

consumption related. That's anything that is consumption related is going

to be interesting for China in the medium-term. The Government has

clearly made this goal that the economy needs to rebalance and the

consumption needs to grow, but it will happen naturally, I think. It

is just general development of middle-class. People want to have,

if you look at just broad penetration whether it is autos as

in cars, home products, the penetration levels are still very

low relative to what you see in the west. In the IT space, in the

internet area, it is very interesting and I think things are

moving online globally, but you can argue that it is happening faster in

China in a range of sectors as well. That was Dale Nicholls there.

Charles Dumas, the chief economist for Lombard Street,

an independent research house based London.

Charles welcome to the programme. He was fairly positive and optimistic

on China. Do you feel the same way? Well, I mean, the situation is worse

than they're showing because the growth rate is about 3.5% or 3%, not

7% or whatever they're broadcasting. That's the interesting point. The

other thing is, it has been predictable for several years that

this was going to happen and it is only a bunch of blind bulls who

ignored it and now they are in a panic that they got it wrong and we

are all in a panic with them. To pick up on the point about the real

growth rate. The world markets got in a tiz about a slow down to 6.9%,

you are saying it is significantly lower and this is what many people

expect the reality on the ground is very, very different from what the

official figures tell us? We recalculate Chinese growth and it

comes out at 3%. But I mean, that's not so bad. The investment was

ludicrous to nearly half GDP and saving was a little bit more. Both

of them wildly high and unsustainable and they had to come

down. So if 46% of GDP comes down, the whole economy gets dragged down

which is why they have to weaken their currency. Now, the real

exchange rate, the relative prices are being cut by massive deflation

of 6% in the producer price index. So the Chinese are actually

adjusting and they've got roughly speaking the right policies and we

think that they'll pull through, but it will take three to five years.

We're not talking about a quickie here. So we have got to brace

ourselves that this is the norm for China as they get through this,

three to five years, you mention the currency. We heard from the big boss

of the China's Central Bank. He has been stumm for six months. He spoke,

the currency strengthened in value. Well, the thing is, as you say, six

you get to August. August is when you get to August. August is when

they started making a fool of themselves in the stock market. I

dare say the Central Bank governor was embarrassed by what they got up

to because it was an extremely ineffective intervention in

something which they clearly didn't understand. And that bungling was a

big source of the subsequent financial market troubles.

Charles, we're short and sweet, but we appreciate your time. Thank you

very much for your insight. Iran signalled it'll take a tough

line in talks among oil producers on curbing production,

aiming to get output back up to levels seen before international

sanctions were imposed. It comes as oil prices keep falling

despite Saudi Arabia and Russia agreeing to freeze oil output

if other producers follow suit. Japanese carmaker Nissan is to start

assembling cars in Myanmar this year The company will initially

assemble its sunny sedan at an existing facility of partner

Tan Chong Motor Group, It comes as the Southeast Asian

country opens up its economy. Is that the opposite of a cloudy

sedan? A cloudy station wagon! Asia's biggest commercial aerospace

and defence airshow has opened It's a chance for the industry's

major players to gather in one of the world's fastest

growing regions. In fact

in South East Asia Boeing expects to sell almost 4,000

new planes, worth $550 billion It is usually the air show where we

see the big order announcement. Me thinks, we are seeing big orders,

but they are not as big as they have been in the past? Well, Aaron, it is

the second day of air show and we have had slighty meatier deals

announced today compared to yesterday so Airbus said Philippines

Airlines is buying 12 of their latest A250 jets for $4 billion.

That's meatier. The A350 is a more fuel efficient, quieter plane.

Boeing said that a Chinese private airline called OK Airways is

spending 1.3 billion to buy 12 their 737s as well. Compared to yesterday

where we saw smaller orders, I think we're getting meatier ones come

through today. Have fun. We will talk to you soon,

no doubt, lots coming from you guys as the show progresses over the next

few days. Cheers. We look different today. Those are

the numbers. That's what happened in Asia overnight and of course k those

are the figures from the US yesterday.

A couple of things to keep an eye on. We get unemployment figures

later in the UK. But that section in the US yesterday helped translate to

a more positive start for markets despite the falls in Asia overnight

and it is the volatility as far as the oil markets are concerned that

is still causing problems. Oil gone down again. It is below $32

a barrel. How low can it go?

Why are we different today? We may have one less camera in the studio.

Let's have a look at what's going on in the markets.

Michelle Fleury can tell us what will making the headlines

in the business world in the United States today.

America's third biggest wireless network T-Mobile reports on

Wednesday. It has gone from the poor relation

in US mobile to arguably its strongest performer. Attracting

customers away from its great rivals, Sprint and Verizon and it is

looking for its subscriber base to have grown by four million for the

last three months of 2015. Now comes the hard part of any turn

around and that's higher expectations. Everyone will be

looking carefully for what T-Mobile claims it can do in 2016. Also out

on Wednesday, minutes from the last Fed meeting. Further fuel for the

wildfire of speculation about monetary policy that burns across

the markets these days. .

Joining us is Jane Foley, Senior Currency Strategist at

Shall we start with oil? I love this story. Yesterday, we had the meeting

in Doha. We had Venezuela, Qatar, Saudi Arabia, non OPEC member,

Russia, saying we will agree to freeze levels at January's level, as

long as everybody agrees? That's the point, as long as everybody agrees

and the other thing is this is only a freeze. Many people in the market

had hoped perhaps for a cut and we get a freeze.

Not necessarily a freeze, but January, we are having record

levels? Record production for a lot of countries. So again, frozen at

high levels. It isn't a concession, but we have got to remember Iran,

perhaps OPEC's second largest producer. They have only come back

on to the market and they need revenue after the years of

concessions. Are they going to cut it back? After years of seeing OPEC

work well as a cartel, they have managed to pull together and be

co-ordinated in their action. This time, it is about self interest,

self preservation and keeping the oil taps open for the countries like

Iran that need it? Over time a lot of producers have come online. If we

go back 20 years ago, OPEC didn't have the competition from Canada,

and the US, etcetera, every time the oil price went higher, it became

profitable for other countries to invest and bring all the supply

online and now, we have a situation, OPEC is playing a game. It wants to

squeeze out marginal producers by keeping and pumping and keeping the

price low to cause bankruptcy in some of the other corporates or to

stop the investment for more oil feeds and it is the game it is

playing. And it is a dangerous game. We're going to wrap it up. You're

coming back to talk us through the papers.

Still to come: Cutting the cost of HIV.

The boss of specialist drugs firm Veev Healthcare will be here.

He'll give us the inside track on developing treatment and funding

You're with Business Live from BBC News.

Clothes manufacturing was once a thriving part of the UK economy

but competition from abroad means it has been in steady decline

Let's head to a factory in Blackburn where staff are hoping

She gets the glamorous once! Last week it was pigs, today it is

clothing. I have upgraded!

Good morning. This business started off making leather where the men

delivering coal, then they moved into military uniforms. But this

time last year, the company got into trouble because a lot of those

contracts for making military clothes went overseas, and we have

seen that across the textile sector. The number of people employed in

this industry in the UK has gone from 800,000 in the 1970s to around

85,000 people in the last few years, so it has been a big fall. And if

you look at the wages in this area, there is a big difference between

the wages people would get, chemical workers for example will earned more

than people working in this industry, even though they are all

in manufacturing. We are seeing some jobs coming back to the UK, and one

analyst is predict that around 20,000 jobs will come back from

China to the British textile industry, and this is good news for

a factory like this one. What they are doing here is something called

community clothing, led by the fashion designer, because a lot of

this business is seasonality. In this time, they will make products

sell direct to consumers, so they will make a couple of garments which

they sell at a lower price than they normally would in the hope of

keeping these types of places open. Steph McGovern in Blackburn for us.

We were trying to work out what it actually is that they are making. We

should pay more attention. Let me take you to the tablet. There are

now more estate agents in London than independent butchers,

greengrocers and fishmongers, so the decline of our high street not great

for those traditional businesses. But if you are an estate agent, good

news, you can't move for them on the high Street.

Our top story - Beijing tries to re-ignite the world's second

largest economy, where growth continues to slow.

It is having trouble doing it, and that has had huge repercussions

right around the world, more coverage of that online.

Drug companies have come under flack for the way they sell

Under particular scrutiny is how accessible their drugs are in poorer

countries and what they charge for them.

So when a new start-up offers drugs at not-for-profit prices,

you might question where it makes its money.

And ViiV health care says its doing just that.

ViiV is a specialist drugs company, part-owned by GSK, Pfizer

and Shion-ogi, and focuses solely on developing treatments for HIV.

The company has 12 HIV treatments, generating annual sales

The company says it grew by 54% in 2015, which is faster

Dominique Limet is chief executive of ViiV health care

Can we start, that growth number is staggering. How have you managed to

achieve that, 54% growth? When you deliver a product which really is

well differentiated and adding value to patients and Society, which is

fairly priced, you get such a result, and I think we have

demonstrated that our innovation strategy that we put in place in

2009 is delivering great results. And let me get this in and get this

out of the way, because I'm sure people are thinking about it. If

you're HIV treatments are a not-for-profit, going to countries

that account for 75% of people living with HIV, if you're doing

that not-for-profit, how are you making money? We have a strategy

which is very clear. We make money in the Western countries and we give

away our products in the countries that are poorest, the sub Sahara

countries, where we have agreed with companies to give them access to our

IP rights. So in a way, what we are doing is we are selling in the most

developed countries while we are also giving away free of charge the

products for most of these countries. And that is the first

decision that we took in 2009, which was to give this right to those

companies, the generic rights for our products. We often hear from the

big health-care firms that they need to charge high prices to fund future

research and development of new drugs. You are saying that is not

the case, you don't necessarily need to charge those prices in the

developing market because you can make money elsewhere? That is

exactly right. I think it is clear that we needed to make sure that we

had a fair pricing strategy to ensure that our products are

affordable in all territories. We can't talk about HIV drugs of the

cost without talking about Martin Scott rally. Many people will know

he was described as the most hated man in America because he took over

the drugs firm and put the price up by 5000%, and The U's that excuse,

that it was to fund the drugs to pay for new drugs. I think it is a sad

story. It doesn't help the reputation of the pharmaceutical

industry. We have continually tried to respect the contract between

society and us. That is why we are currently pricing and product at a

fair price reflecting the value, the differentiation, of our product, and

that is why at ViiV health care we have been able to be so successful,

because we have fairly priced our products and we are considered as a

fair partner for society. Do you feel comfortable that your drugs are

being ethically delivered to those in the nations where we see a lot of

HIV? Do you sleep at night that the drugs are getting to the right

people? It is a continuous preoccupation. We want to make sure

there is no patient left behind, but it is a tough job, because we have

to get the registration right in those countries, then we have to get

access and supply, and it is a very challenging environment. But we do

at Won everything we can do to improve access through voluntary

licensing agreements, to work with positive action initiatives that we

have to improve the infrastructure, to work on stigma discrimination, to

work with the governments to improve accessibility and affordability, but

it is a very challenging and demanding task. I can only imagine.

Dominique, we're going to leave it there, but thank you. Dr Dominique

Limet from ViiV health care. In a moment we'll take a look

through the Business Pages but first here's a quick reminder of how

to get in touch with us. The Business Live pages where you

can stay ahead with all the latest business news. We will keep you

up-to-date with insider analysis from around the world. Get involved

on the BBC Business Live web page, on Twitter and you can find us on

Facebook. Let's see what other

stories are being talked -- Let's take a quick look

at the stories making business The Verge says a US judge has

ordered Apple to help the FBI to unlock the San Bernardino

gunman's phone. The Times reports on the dip

in oil price as traders According to the Business Insider,

some analysts are now expecting an imminent collapse of China's

banking system and currency. And the Telegraph says there are now

more estate agents in London than independent butchers,

greengrocers and fishmongers. Jane Foley from Rabobank

is back with us to talk us through what the business

pages are looking at. Lets start with China. If we look at

the possibility of the next crisis, if China's debt could be it? This is

what a lot of people are worried about. If you look at the amount of

debt China has, it is huge, particularly for an emergency

economy, and the pace of growth of debt has been shocking. So there is

the fear that this debt could collapse, and one thing that is

really very worrying is where the debt is being, if you have taken on

debt, you are hopefully investing in product of capacity, what they have

is too much infrastructure in housing and factories, so there is a

concern, but a lot of other people say they will manage to muddle

through, they will get through this. It depends which side of the coin

you are looking at. And this story, a judge says that

Apple must help the FBI break into an iPhone belonging to the man who

killed 14 people in the US. Apple says it can't actually do this, it

doesn't have the technology, but at the same time, it strikes me that

they should be able to do this and want to. With this operating system,

it cannot be broken into, 90% of it, they say. What about the other 10%?

Does the person have a right to privacy, after such a horrendous

crime, do you give that up? But also on the getting into the software

that Apple will use, some of the critics are saying that even though

the judge has said they need to do this, it could take up to five years

to find the right pass code. Jane, thank you!

There will be more business news throughout the day on the BBC Live

web page and on World Business Report.

Hello. We have a band of rain, sleet and snow heading across the UK to

do, but I did, it will turn brighter with a scattering of showers. It is

quite an active