09/08/2012 World Business Report

headlines from BBC World News. Now for the latest financial news with

Alice Baxter and World Business Inflation in China hits the lowest

level in 2.5 years. Will that prompt more stimulus from the

government? Jaguar Land Rover - a UK success story, but cannot it

With sluggish growth in Europe and the United States, economists are

looking to China to pull the global economy out of the doldrums. And

the latest economic report from China is encouraging. Consumer

price inflation fell to 1.8% in July - the lowest annual rate in 30

months. Inflation has been a key concern for Chinese officials. But

the decline over the last few months will, perhaps, allow them

room to boost growth. From Beijing, I'm joined by Qian Liu, who is the

Deputy Director for China Forecasting at the Economist

Intelligence Unit. Will Chinese policy makers capitalise on This

deceleration of price rises to boost the economy? A good question.

We have seen the 1.8 is a 30-month low. If you look month-on-month

a three-month consecutive negative territory for month-on-month CPI

inflation. This month is 0.1% positive. This does give the

government plenty of room to consider the cut in both interest

rate and reserve requirement ratio. I would argue it is not necessary

for the government to cut down interest rates, because of the

government still aims at 7.5 GDP growth, we are confident it will be

able to happen. What sort of measures might policy makers be

considering in order to boost growth? Some speculation we could

see the tiny central bank lowering lending reserve requirements again?

I would not exclude the possibility of further requirement ratio cuts.

I would emphasise I am not excluding the possibility of an

interest rate cut but it will not be necessary. The Chinese

government is a risk adverse at the moment. The global outlook is very

weak. The political change of guard means the government needs to be

very careful to maintain its minimal % growth. If Europe

collapses, the government can easily was -- reverse its very

tight control over the property market. He mentioned the official

growth target of 7.5% in 2012, who has been an economic for China in

the last six quarters, is the economy still on track to meet that

target? Absolutely. Even though 7.5 is the government target, usually

there is very little linkage between what is the actual number

and the government target. At our unit we are looking at a 0.1%

growth for 2012. We believe for China now days, even though

external demand is weak, the domestic market is very important.

We think the second quarter is already the bottom and it will pick

maker Jaguar Land Rover announces its latest results in the next few

hours. Under its Indian owner, Tata Motors, Jaguar Land Rover has

become the UK's most profitable car-maker, creating 8,000 new jobs

in the last two years. But for how Jaguar had its first public outing

last month and we had a glance at the amazing speed at which this

company continues to grow. Can cells keep increasing when so many

markets are slowing? One of the country's answers to that is to

constantly re- stock its showrooms with new cars and new technology.

on sale last September. On the Jaguar side, they are planning a

replacement and a compact car which will compete with the BMW 3 series.

The company is boasting it will produce 40 new models of the next

five years, five years, including this new Land Grover and next month and

all new land -- Range Grover. Carbines in recession-hit countries

are still moving towards luxury brands. -- car buyers. In the UK, a

greater share of the market has been taken by premium brands. There

is no -- we can continue at the same rate of growth. 1,100 new jobs

were announced at the stage upon last month in return. Agreeing to

work Saturdays. Unions say they may not always be so flexible. Be one

to see members have good or skills and good training opportunities. We

will not take part in a bidding war to see how low we can go. For the

moment, the company rides a wave of success, to keep up with demand for

its new release, it will run its factory on Merseyside for 24 hours

a day. Manchester United is due to set the price for its shares on

Thursday. The club is selling a 10% stake which could raise as much as

$330 million.. But some are saying that Manchester United is being

overvalued. Particularly as it has hefty debts and is facing

competition from rivals with very deep pockets. Sean Hamil, is a

lecturer at The Birkbeck Sport Business Centre. The club's

proposed valuation with a price tag of $ 330mn - would make it the most

expensive sports franchise in the world - nearly double that of Real

Madrid - investors will be asking themselves if they're getting a

good deal. Is it really worth that much? I do not think it is worth

that much at the mom structure is not good value for

investors. The problem for the company the debt is so large that

the operating profit goes to pay down the deck. Even with the

proposed reduction in debt from the Shia issue they will still have

substantial debt. The family which owns Manchester United, how will it

pay down its debt power bid and? The fundamental problem is the

structure of the football industry in Europe. It has to competitors in

England, one of them as Manchester city. They did -- expand them

matter what they do. In order to stand still they have to spend as

much as the competitors on salaries. The -- that will impact on the

ability to get a pre-tax profit. This happened in the 90s. There was

a lot of share flotations in the 90s. Fans bought the shares. The

clubs went making any money. The sheer prices decline in the clubs

went off the markets. I do not see any difference between there are

now. A after the sale, the Glaser family will retain almost 99% of

the voting control, but they are relying on the emotional appeal of

owning a bit of Manchester United? For her done a good night

generating promotional revenue. They could be profitable within

three or four years' time. It is uncertain. There are so much

uncertainty around this. There are other alternative investments

around and this is not a good one. To conclude, ironically, if they

went for a traditional share issue, they sold shares on equal part in

used it as an exit strategy, there would be demand. But they want to

take some cash and retain control. I do not think they can do both.

Asian stocks rose after reports showed China's consumer prices

climbed at a slower pace for a fourth month and Australian