Browse content similar to 13/07/2012. Check below for episodes and series from the same categories and more!
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the headlines from BBC World News. Time for the latest money news. | :00:03. | :00:13. | |
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Here is Alice and World Business Hello. Welcome to World Business | :00:15. | :00:20. | |
Report. I'm Alice Baxter. Trouble for the global economy. China | :00:20. | :00:30. | |
reports the slowest growth in more than three years. And in Singapore | :00:30. | :00:34. | |
growth more than expected in the second quarter. We'll hear more | :00:34. | :00:40. | |
about the disasterous trading strategy at JP Morgan Chase, it | :00:40. | :00:50. | |
:00:50. | :00:50. | ||
cost the bank at least $2 billion. China's economy is experiencing the | :00:51. | :00:55. | |
sharpest slowdown since the global financial crisis in 2008. Figures | :00:55. | :01:00. | |
out Friday showed that the annual pace of economic growth slowed to | :01:00. | :01:05. | |
7.6% in the 3 months to the end of June. In the previous quarter | :01:05. | :01:10. | |
growth was running at 8.1%. The Government has been trying to | :01:10. | :01:15. | |
revive the economy by lowering interest rates and lifting spending. | :01:15. | :01:18. | |
Private sector firms have been seeing a fall in sales and are | :01:18. | :01:25. | |
cutting back on staff. One simply tom at the slow down is because | :01:25. | :01:31. | |
stockpile of coal has been building up at its ports. If you want a | :01:31. | :01:37. | |
symbol of China's economic slow down, this is it. We are here home | :01:37. | :01:43. | |
to China's biggest coal port. It is from here that Cole is transported | :01:43. | :01:48. | |
in ships to the power plants across the country to fuel China's | :01:48. | :01:54. | |
economic boom. Analysts say the demand for coal is dropping and | :01:54. | :01:59. | |
dropping fast. Huge mountains of coal that you can see here has been | :01:59. | :02:03. | |
growing higher in recent months. It was a clear indication that China's | :02:03. | :02:09. | |
economy was slowing. Analysts say stock piles reached record levels | :02:09. | :02:14. | |
with 8 million tonnes of coal stored. That's happening because | :02:14. | :02:20. | |
China's factories are cutting back in production. The last sign that | :02:20. | :02:28. | |
this happened was back in 2008. When the global financial crisis | :02:28. | :02:34. | |
struck. That was a report from Singapore. Michael is a Professor | :02:34. | :02:38. | |
of finance at Peking university. Thank you for being on the show. | :02:38. | :02:43. | |
How worried should authorities in China be about this. Growth is | :02:44. | :02:47. | |
slowing. They've been trying to boost the economy by cutting | :02:47. | :02:52. | |
interest rates. Will they redouble their efforts, do you think? Yes, I | :02:52. | :02:57. | |
think they will. I think we are likely to see and already are | :02:57. | :03:07. | |
:03:07. | :03:07. | ||
seeing an increase in loans, and moving attention towards ajustments | :03:07. | :03:13. | |
etc. The problem is a slowdown in growth is a necessary component of | :03:13. | :03:19. | |
rebalancing the economy, which the authorities urgently want. So my | :03:19. | :03:23. | |
suspicion is because this was the leadership transition year. We'll | :03:23. | :03:27. | |
probably see them step on the accelerator more, growth in the | :03:27. | :03:32. | |
second half being better than the first. That doesn't solve the | :03:32. | :03:36. | |
problem, it postpones the problem. We have a once in a decade | :03:36. | :03:41. | |
leadership change due later this year. Realistically, what can | :03:41. | :03:45. | |
authorities actually do in China? Surely the real problem here is a | :03:45. | :03:54. | |
slowdown in Europe and sluggish US growth. The two biggest exporters | :03:54. | :03:58. | |
for China. Well, I don't think that's the biggest problem in China. | :03:58. | :04:02. | |
The problem is that those things are happening at the wrong time. | :04:02. | :04:07. | |
The biggest problem in China is we have been overinvesting through | :04:07. | :04:12. | |
many years in projects whose economic value does not justify the | :04:12. | :04:18. | |
amount of the investment. You have to bring investment levels down in | :04:18. | :04:23. | |
China. Since is the main source of growth, as you bring levels down, | :04:23. | :04:27. | |
growth slows down. The fact that this is happening at the wrong time, | :04:27. | :04:32. | |
while the US is slow and the Europeans are going through a | :04:32. | :04:36. | |
crisis makes everything much worse. Michael, Professor of finance is | :04:36. | :04:41. | |
the Peking university, thank you for joining us. There's been gloomy | :04:41. | :04:45. | |
economic news from Singapore as well this morning. The economy | :04:45. | :04:52. | |
shrank an annual rate of 1.1% in the second quarter. Our | :04:52. | :05:00. | |
correspondent is in Singapore. Is this a surprise? It is, indeed. | :05:01. | :05:05. | |
There were expectations that it would expand marginally in the | :05:05. | :05:10. | |
second quarter. All of this is a sign of how much the slowdown in | :05:10. | :05:14. | |
Europe and the anaemic growth in the US is hitting trade in this | :05:14. | :05:20. | |
economy, which is reliant on trade. The EU is Singapore's largest trade | :05:20. | :05:25. | |
partner, and trade makes up a great portion of growth numbers. It was | :05:25. | :05:30. | |
really the manufacturing sector that took a hit, down 6% from the | :05:30. | :05:36. | |
previous quarter, due to a drop in biomedical production, coming amid- | :05:36. | :05:41. | |
a day's bigger story that you have been reporting, that China saw its | :05:41. | :05:47. | |
lowest growth in three years. China was one of the biggest drivers of | :05:47. | :05:51. | |
Singapore's export growth. There were some bright spots, we saw | :05:51. | :05:58. | |
gains in the service sector growing marginally. Thanks for that. | :05:58. | :06:03. | |
Exactly how many billions of dollars did JP Morgan lose when | :06:03. | :06:08. | |
trades went bad earlier this year? Investors will hope for an answer | :06:08. | :06:11. | |
to that question when the bank releases results for the three | :06:11. | :06:18. | |
months to the end of June, losses estimated at $2 billion caused the | :06:18. | :06:24. | |
departure of the chief investment officer and triggered an | :06:24. | :06:27. | |
investigation. Jamie Diamond, JP Morgan's Chief Executive is getting | :06:27. | :06:31. | |
used to being in the hot seat. you too big to fail? No, we are not | :06:31. | :06:37. | |
too big to fail. We belief that a bank should be bankruptable. That | :06:37. | :06:42. | |
was him grilled by US law-makers. This Friday shareholders will be | :06:42. | :06:48. | |
asking the tough questions, keen to know how much America's biggest | :06:48. | :06:52. | |
bank lost on bad derivative trades. Whatever the figures, the damage | :06:52. | :06:58. | |
has been done. The size of the loss is not the issue. The issue is why | :06:58. | :07:02. | |
did they miss the loss in the first place. It raises a question of are | :07:02. | :07:07. | |
the banks too big to manage, regulate and fail, and too big to | :07:07. | :07:12. | |
understand. The trading loss may seem like another example of risky | :07:13. | :07:18. | |
behaviour by an investment bank. There's a key difference. JP Morgan | :07:18. | :07:24. | |
is going after the pay of the group where the losss occurred, starting | :07:24. | :07:27. | |
with the head of the investment office who worked here. This makes | :07:27. | :07:33. | |
it the first major banks since the financial crisis to penalise its | :07:33. | :07:38. | |
staff in this way. The claw backs are symbolic. They are designed to | :07:38. | :07:43. | |
send a message to the market, which has been troubled by the fact that | :07:43. | :07:48. | |
a few individuals can cause such a precipitous market drop in the | :07:48. | :07:53. | |
value of JP Morgan. I think this is to say to the market "Look, we'll | :07:53. | :07:59. | |
penalise people who do bad acts". This Friday, the 13th, JP Morgan's | :07:59. | :08:07. | |
horror show is unlikely to end with regulate investigating other | :08:07. | :08:11. | |
potential missteps by the bank. BBC investigation has raised | :08:11. | :08:17. | |
questions about the effectiveness of advertising on Facebook. | :08:17. | :08:23. | |
Companies spend money to attract Facebook users. A report by our | :08:23. | :08:28. | |
correspondent found some responded to other adverts. Facebook said | :08:28. | :08:36. | |
Rory's example does not work, because it was poorly targeted. His | :08:36. | :08:43. | |
credit -- Moodys cuts rates concerned about euro leading Greece, | :08:43. | :08:50. | |
it could have an knock-on effect to Italy. Praises fell 5r' in New York | :08:50. | :08:56. | |
trading, -- prices fell 5% in New York. Trade fell 18% in the second | :08:56. | :09:02. | |
quarter compared to the same period last year. Trade blamed a slowing | :09:02. | :09:08. |