17/02/2016 World Business Report


17/02/2016

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My autocue has disappeared so I don't know who is doing World

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Business Report, at some new guy. While those fragile talks

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between London and Brussels continues over an in-or-out Europe

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referendum, we are taking a look at what a Brexit would mean for one of

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the UK's most important industries. And we are taking a look

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at the latest moves by Beijing to try and reignite

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the world's second-largest economy, and the impact that is having

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on investors all around the world. In a minute we will have the

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latest from the Singapore Airshow. Gordon in my ear tells me I have

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eight minutes and 58 seconds. There is the deal, it is like Christmas

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all over again. You give me that and I will give you a fascinating and

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exciting snapshot of all the latest in the world of business and money.

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Later today, European Council President Donald Tusk publishes

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a final draft report to national leaders on a potential deal with the

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A two-day EU summit starts in Brussels on Thursday,

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during which a final agreement is expected to be struck.

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If the talks this week in Brussels don't go well, the UK could well be

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So what could the cost of an exit be to the City of London?

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Andy Verity went to the Square Mile to find out.

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Those in the city who want Britain to leave the EU say that warnings

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over 100,000. Job losses are scaremongering. While red tape from

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Brussels is strangling their business. It is just unnecessarily

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burdening UK businesses and it is 100% of UK businesses which get

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impacted when actually only 5% export to the European Union. So why

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should the rest of us suffer? You take a country like Switzerland, it

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is only the businesses that export to the EU that have to comply with

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the rules and regulations. More than 2 million people work here in

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financial services, and to generate the trade surplus for Britain of

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around ?70 billion. Why put that at risk, say opponents of a Brexit? Why

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not keep the status quo? But those in favour of a Brexit say that you

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could keep all those benefits by signing a new free trade deal with

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the rest of Europe and you would gain the big prize, control over

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immigration. But most in the city, especially big businesses, what

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Britain to stay. Leaving the EU would be a leap into the unknown. We

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don't know what the relationship between Britain and the rest of

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Europe would be. We would have a period of some years of uncertainty,

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and in uncertainty then you would get less investment. People would be

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reluctant to take decisions. I don't think anybody is going to rush to

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leave, but visitors would then state written will not be in the European

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Union. The billions of pounds that have modernised the city have come

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to London since the UK joined the European Union more than 40 years

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ago. Those in favour of a Brexit would say that is in spite of the

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European Union. Those against would say it is because of it. Until we

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have the vote, we won't know who is right.

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We will keep across that until we are blue in the face, I'm sure.

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China is going through a difficult transition from rigid socialism to

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It is now one of the world's fastest-growing

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economies, a leading exporter and major overseas investor.

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

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

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The government is trying to shift the economy to one driven

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by consumption and services, rather than manufacturing, exports, and

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But managing that transition has been challenging.

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There are doubts about whether Chinese data scan be trusted.

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Critics say that real growth figures may be much weaker.

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Meanwhile, worries about the devaluing currency persist,

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even though the yuan strengthened this week, thanks to China's central

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bank governor breaking his silence on currency policy.

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Let's find out more. She is in the house, I dragged her in.

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Linda Yueh, professor at London Business School and Fellow

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So the big boss of China's Central Bank broke his silence. Explain to

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the uninitiated what is going on with the currency. A sickly the

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central bank governor hadn't spoken about monetary policy for months but

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gave an interview to a Chinese weekly magazine and what he said was

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the currency is basically stable. Either way, China used to drive half

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of global growth, but we account a quarter of the world's population,

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and now look. We drive a quarter of global growth, so basically this is

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about right, this is a hard landing. So that has given

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confidence that China has responded on the big shifts that you have

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described. On the back of that, the yuan increased in value on other

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currencies around the world. So a weaker currency is good if you are

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exporting a lot of stuff, right? So all the stuff that Chinese factories

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make an ship off, if the currency is lower in value that is cheaper for

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all of us around the world to buy Chinese stuff, so we buy a lot of

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it, right? But if they are trying to shift its economy, they want more

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Chinese people, middle-class etc to spend money in the economy, it is

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better to have a higher value currency, isn't it? It is, yes. That

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means by the same reasoning that Chinese people will find it cheaper

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to buy stuff from the rest of the world because their currency, the

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yuan, goes further. That is why at the moment, the long-term uncertain

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value of the Chinese currency is what is contributing to some of this

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volatility. Because unlike other major economies, China is not a

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market economy. You can't just look at, for instance, what the interest

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rate is or how things look for decades, how financial markets

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traded, because financial markets are still largely closed. It is that

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uncertainty around the value of the currency which is contributing to

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this global volatility. But let me just add, I am not sure entirely if

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I agree with the Governor's assessment on this but he said the

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central bank is neither God nor a magician when it comes to

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uncertainty. And so I think that means we just have to wait a little

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while longer to see whether Chinese currency settles but it is

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undoubtedly why we see so much turmoil in global markets these

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days. And you will come back and take us through the papers. For you!

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Thank you and great to see you. -- poor you!

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Now, Asia's biggest commercial aerospace and defence airshow is

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in full swing in Singapore, and for the latest, Karishma Vaswani

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We are talking about China and of course some of the struggles. Now

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China's economy may be slowing. One thing that is not necessarily

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slowing other Chinese airlines. They are buying a lot of planes, right?

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-- are the Chinese airlines. That's absolutely right. I am coming to you

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one day two of the Singapore airshow. This is when the wheeling

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and dealing gets under way and we have seen some deal signed. China's

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OK Airlines has picked up 12 737 Boeing aeroplanes, that is for a

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pricetag of $1.3 billion. Still nowhere near the figures and numbers

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we have seen at previous airshows in Singapore in 2014, this airshow sold

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deals worth $30 billion. So the niggling concerns about global

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economic uncertainty, what you were talking about a few minutes ago,

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that is certainly a bit of a theme here at the airshow but I am large

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aircraft manufacturers are feeling extremely confident about the

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future. We have heard from Boeing saying they are going to sell almost

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4000 planes in Asia over the next 20 years, worth $550 million. -- 500

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$50 billion. And 1500 planes worth $70 billion. I know we are going to

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get more from you throughout the rest of the day. I am very jealous

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you are there. $550 billion. The Nikkei has been up, down and up.

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It is down over 2.5% and Brent crude slightly up but still a barrel of

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oil worth 32 a barrel. Don't forget,

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you can get in touch with me

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