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Chinese investment in Europe and the US continues to grow
reaching almos $100 billion last year - but can the trend continue?
Live from London, that's our top story on Monday 6th February.
So why is investment from a nine chain in Europe and the US --
mainland Europe and We will also speak to the
award-winning business leader who took over a waste management company
at the age of 19. Also today - Ryanair
profits are down - So do you still have
the cheap flights bug? If you are planning your holidays,
why not tell us where you are off to?
The political events of 2016 may have ignited an unprecedented period
of uncertainty for the global economy but one thing that appears
to remain unaffected is the growing appetite of Chinese investors.
Last year Chinese investment in the US increased
Meanwhile, Chinese investment into Europe grew by 90 percent.
All of this gives the impression 2016 was a good year for Western
economies when it comes to foreign investment.
Well the UK is about to begin a two-year period of Brexit
negotiations and this echoes wider concerns over the health
France, Germany and the Netherlands are all set to head to the polls
later this year and Eurosceptic parties are gaining ground
And in the US the uncertainty about what the Trump administration
means for future deals with China is very unclear.
During the recent election campaign he vowed to impose punitive
Add to that moves from Chinese authorities to crackdown on money
Chinese overseas deals could have been worth billions of dollars more
if Beijing had not blocked some 30 acquisitions with Europe and the US.
Tim Gee is Mergers and Aquisitions Partner at Baker McKenzie and one
He explained why those deals were blocked.
Some of the transactions and ousted not complete because the Chinese bid
was outbid. The Chinese bid for London City Airport was outbid by a
Canadian pension fund. Then you also have regulatory control from the
West, particularly in the US. Some deals were blocked there, including
European deals. Then you have controls within China, and what we
have seen is concern over capital outflow from China, and that has
caused some transactions to be pulled as a result of China saying,
we don't want this to happen. Linda Yueh is a Fellow in Economics
at the University of Oxford and an Adjunct Professor
of Economics at London Nice to see you, Linda. This report
is interesting on what happened last year, because the numbers are
staggering, the amount that was invested in the US and Europe, but
also the amount that wasn't. Talk us through a bit more the reasons why.
The Chinese are trying very hard to control out what capital movement.
There are some economic reasons. One is to stabilise the value of the
Chinese currency. Remember, China pegs its currency. They have to
control the amount of currency flowing outside its borders. The
other reason is they don't want companies companies being bought,
but that is how commercial transactions should work. That is
more of an excuse. The real reason is that they want to control the
capital markets, just as they control pretty much everything else
in the financial markets in the country. I wonder what your take is
on the future appetite of Chinese investors investing in the US when
we have quite convert of statements from Donald Trump, accusing China of
manipulating its currency, questioning the one China policy.
Will that affect investors' willingness to pour money in? I
think the rhetoric will have some impact, but I wouldn't overstate it.
Politically, there has always been a lot of tension between the US and
China, but a lot of businesses do deals anyway. The Chinese don't view
Donald Trump that negatively. There are some who are worried, but there
are others who say, he is a businessman. He welcomed some
Chinese companies to make jobs in America. There are only two roles in
an American economy, he said - hire American people and by American
products. -- purchase American products. . There has been a shift
away from... The Chinese Government is attempted to control not just the
financial markets but the whole economy. China's growth is slowing.
It is one of the reasons why big companies want to invest overseas,
to diversify. The Government doesn't want them to put money into things
that they don't think will help china's growth. They want
innovation, expertise and things like high-end financial services,
high-tech manufacturing, so their investment in America and Europe
tends to be permitted if it is of that ilk. It tends to be scrutinised
if it is more about buying entertainment companies. Thanks,
Linda. All was good to have you on the programme. There is more about
that on our website. Take a look when you have time. Some other news
now. Apple, Facebook, Google
and Microsoft are among 97 companies to have filed an official court
document opposing Donald The US President's executive order
prevents people from seven mainly Muslim countries
entering the United States. On Saturday, the federal appeals
court rejected the Trump administration's request
to reinstate the ban after it was initially
blocked a day earlier. Ryanair has reported an 8% fall
in profits as increased competition forced the Irish airline
to cut fares. The company says that average ticket
prices may have fallen by as much as 15 per cent over
the winter period. Ryanair has warned that 2017
will continue to be a difficult year for the industry,
but the carrier left its profit Two of Japans biggest
automakers have announced Toyota and Suzuki said they'd been
working on the deal since October. This is interesting, isn't it?
That's right. I just want to mention that Toyota has just released its
latest earnings numbers. They have raised their profit forecast thanks
to stronger sales. They say they expect profit of 15 billion US
dollars in the financial year to March, a 10% increase from the last
forecast. Toyota last year lost its title as the world's biggest
car-maker to Volkswagen. The industry is getting more
competitive. Tidying up with Suzuki is a means to address that. They
will develop green cars and other technologies, but it is worth
mentioning that both companies have a history of failed alliances, so
let's hope that this relationship works out. Thank you very much.
Asian markets rose as investors tracked a record on Wall Street.
That was fuelled by a better than expected jump in US jobs.
Financial stocks in particular have been boosted by Donald Trump's
He's likely to relax the tighter regulations that were imposed
on banks after the 2008 crash to try and prevent a repeat of that.
In Europe the main markets opened a shade higher - but fairly flat.
Some things to watch out for this week -
investors will be looking at the results from BP and Total
They are two of Europe's biggest energy companies.
Will their results reflect the rebound in oil prices?
And Samira Husain has the details about what's ahead
If the last two weeks were anything to go by, we could see another busy
week. It will also be a busy week per business news, as companies
continue to report earnings. General Motors will release results on
Tuesday and it is expected to have a record year. Coca-Cola is also
reporting this year. Fizzy drinks are going flat as consumers look for
a healthier options. The company has been trying to diversify away from
sugary drinks into coconut and vitamin water, but it hasn't been
enough -- but has it been enough? Wall Street is -- twitter is
reporting as well. Joining us is Trevor Greetham,
Head of multi asset A lot going on, as usual. We'd been
touching on some of the issues. Let's talk about travel, because
that seems to be impacting trade in Asia, with shares doing well.
Perhaps an executive order on financial regulation coming up soon?
Yes, and you will generally here Donald Trump using the short form of
the consumer protection act. He wants to deregulate the American
market generally, which would mean getting banks... Wasn't the
regulation brought in to protect us against another 2008 - style crisis?
Yes. It is that a question about whether it will be a good thing or a
bad thing, but it will have to go through Congress. There will be
opposition. Generally, we are testing America's separation of
powers. Donald Trump will say stuff and then see what happens. The
challenge to immigration. Companies now joining the legal case to try
and get the travel ban overturned. From his point of view, he can't
lose, because he says, I will ban people from these countries, and he
is then stopped from doing it, but he can say to his supporters, I
tried and I was stopped by so-called judges and so-called politicians. He
has nothing to lose. There is a continual war in the markets between
what it sees good, such as stimulus, and what they see as bad, all the
crazy stuff. Other crazy stuff coming up this week - what are you
watching? Amongst all this political noise, the world economy is strong,
which is good. Markets. China is strong this year, whereas it was
weak for four or five years. Maybe they don't want to slam the brakes
on, so it will stay quite strong. Thank you for joining us.
Still to come: We'll speak to the woman who unexpectedly took
over the family firm at the age of 19 and turned it into
You're with Business Live from BBC News.
Let's tell you a bit more about Ryanair reporting and 8% fall in
profits. They said average fares fell to ?28 per customer, a fall of
17%. Traffic was up 16% on last year. The chief financial officer of
Ryanair joins us now. It's an interesting time for you as a
company, as many of your rivals. More people travelling but you're
making less money per passenger and your profits are going down. Good to
talk to you. We're having a relatively good year, to be honest.
Our profits in the first nine months were up. As you said, passenger
numbers were exceptionally strong. We had record load factors of 95%.
An average fare of ?28. Fares could be down as much as 15% in the fourth
quarter. We have maintained our guidance of 1.35 billion, which
would be record profits for Ryanair this year. It really is an issue for
you, isn't it? We have heard you will sustain those low prices the
rest of this year and probably the first quarter of next, so your
profits will be more and more squeezed, when they? -- won't they?
We have the lowest fares of anyone out there, and we announced this
morning that our total costs will be down by 4%. When you consider that
our next nearest competitor's 's 40% higher than ours, and yet we're
looking at unit cost reductions, excluding fuel, that puts is in a
strong position relative to everyone else. We're better hedged next year
compared to competitors. We have compared to competitors. We have
which is our biggest cost, and there which is our biggest cost, and there
will be significant savings on fuel. We are very good at cutting costs in
the businesses and keeping competitive advantage. We grow
profitably on the back of it. Next year, our plan is to deliver 130
million customers. That's the chief financial officer.
More detail is on our website on Ryanair's earnings and other
companies out with news. Our top story, Chinese direct
investment into the US and Europe more than doubled to a record
$94 billion last year. Lawyers Baker McKenzie say
that was despite $75 billion worth A quick look at how
markets are faring. This is how they're looking after a
fairly flat open. The FTSE is up a shade. The DAX and the Cac down
slightly. In the UK alone, the industry
is worth more than ?0.5 billion. But it is in a predominantly
male-run sector, Jacqueline O'Donovan stands
out as a rare female leader. At the age of 19, Jacqueline took
over the family business 30 years on and O'Donovan Waste
Disposal is a fast-growing firm It employs 160 people
and mostly operates in London and the South East,
a complex and very Jacqueline O'Donovan,
Managing Director Tell our viewers about the beginning
for you. Because your father died suddenly when you were just 17. He
was running the company? He was, yes. He had a successful business
and he died back in 1985 when I was 17 and I'm the youngest of four. The
youngest of four? The youngest of four. But it fell on your shoulders
to run the business? It fell on all our shoulders, but it took a couple
of years to stabilise and once it stabilised, we picked our role and
mine was managing director. How did you manage that at such a young age?
You're running a company, what sort of business experience did you have
at that stage and were you just winging it? I was winging it. I ran
out of school at 16. I couldn't wait to get out the gatesment I had a job
as a childminder in Germany which I didn't take on and the rest is
history. What reaction do you get from friends when you tell them your
line of work? They say what line of work are you in and I say, "I bet
you can't guess." Which they can't! It is a difficult business to be in
anyway, I imagine 30 years ago, at the age of 19, being a woman running
this company in London it was extremely tough. What kind of
barriers and difficulties did you face? First of all, the biggest
barrier was I was a female in a male dominated industry which I think
bothered the men more than it bothered me. Then I didn't play
golf. That was also a bit of a hurdle especially when it came to...
Do you play golf now? No, no time to shop or golf. That was a hurdle. But
I just saw them as challenges and worked my way over them each and
everyone. How did you overcome them? Was it by proving to people that you
could hold your own and you were just as able to grasp this industry
as they were? I didn't really think about it at all. It wasn't something
that I thought about, oh, my gosh, I'm a woman in a male dominated
industry. It was something I took as a challenge. I enjoy a challenge and
I got on with it. The males felt more intimidated than I did.
The actual industry itself has changed in that period of time? Oh,
massively. We just chuck everything away in one bag and you guys would
take it away. I imagine in the UK many viewers around the world have a
similar experience, we're separating our waste, we might get fined if we
don't do it properly and it is left behind. It has completely changed.
What has that meant for your business? It brought us to the fore
front. 20 years ago if you were at a social event with regards to
business you would tell people you were in waste disposal, it was right
move on to the next question or the next subject. Now, they want to know
how you do it, what equipment is involved, whether people are still
involved, and people are more interested in how it's done. Is it
harder to make money now? Oh, yeah, without a shadow of a doubt because
it takes a lot more money, a lot more equipment to recycle more. So
yeah, the prices have gone completely. What's your ambition for
the business. Where do you take a waste disposal business in the
future? Bigger and better things. I would like to try different waste
streams. We would like to expand as a family. So yeah, bigger and
better. Are we sitting on a waste time bomb in London? I imagine any
capital city around the world in terms of waste is a big problem? I
wouldn't say it is a time bomb. I think it is very well handled.
Behind the scenes what normal people don't see is very well handled. How
much is landfill and how much in terms of percentages? We are 100%
diverted from landfill and we have been for years. The old landfill,
the biggest issue is food waste going to landfill. That's the next
hurdle for the food waste industry. I could talk to you for hours,
couldn't you? Yes. Fascinating. We can't. Thank you for coming in.
Really good to have you on the programme. Thanks.
And now for the latest instalment of our ongoing CEO secrets series
we're going to hear from the head of a family company that's now
Paul Symington is chairman of the Portuguese wine company
This is the business advice he wishes he had been given
If you were going to have a big row, leave it for the really important
things and don't have arguments over the small things.
We're a family business that goes back into the 19th century.
A family business that is united is unbeatable and there
is incressing evidence of the success of family businesses
Put aside the little irritations because they're not important.
Take a deep breath, sleep on it, come back and then
If you let small niggly things get in the way,
you really break up a really, really fantastic business.
There you have it. Loads of top tips from bosses on the programme today.
Let's see what other stories are being talked
We have to talk about Brexit. It is on the front page of the FT today. A
survey which indicates big quota companies are negative on the UK
following the vote to leave the European Union. Which is hardly
surprising given in the run-up in the campaign most of these people
would have campaigned in favour of Remain. That's despite all the data,
you know, proving them perhaps wrong? Yeah, it shows the UK is
growing reasonably at the quarter it was 0.6% one of the best of the G7.
Are they wrong? Well, it matters if they have a negative outlook because
they are the ones who drive investment into the UK. They are the
ones who provide jobs for the k. I must say also the survey is at odds
with the ones I've talked to, most business people are prag pattic
about life. Most business people I speak to are let's get on it. Some
companies will have to move people, but by and large business people are
flexible and adaptable, I think. Let's talk about this fascinating
story about the boss of Tiffany. He was shown the exit door in a kind
of... He has been in the job for two years. He got the boot on Sunday
night they announced it. Just before the Super Bowl when Tiffany had one
of its first time ads? Tiffany sells upmarket jewellery. Tourists going
to New York, you know, it costs them more to buy Tiffany jewellery, if
you know New York, Tiffany's main store is right beside Trump Tower.
They said it was getting hard for them to get people in and out of the
door because of the motorcades arriving, it is a double Trump
thump. Why get rid of the boss? That's not his fault? It is often
the boss that carries the can. It is difficult for Tiffany. All the up
market brands are flying on the edge. One mistack and you can easily
fall out of favour. There you go. On the ropes. He's looking for a new
job. Thanks Dominic. That's the end of another packed show. It flies by.
There will be more business news throughout the day on the live page
and on world business report. We will see you soon. Take care.
Bye-bye. Hello there. The week has started on
a cold note with quite a widespread frost this morning. The week will
end on a cold note as well as I'll show new a moment, but we have a wet
and windy interlude to get through first and that's heading our way