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it a "massacre of the moderates". Now on BBC News all the latest | :00:00. | :00:16. | |
business news live from Singapore. New signs that China's economic | :00:17. | :00:19. | |
growth is stabilising, why do concerns persist about the bubble in | :00:20. | :00:25. | |
the property sector? Concerns from the head of America's central bank, | :00:26. | :00:29. | |
that social media and biotechnology companies are overvalued. | :00:30. | :00:41. | |
Thank you for joining us. China's economic growth number is better | :00:42. | :00:45. | |
than expected, new data just doubt reveals it has picked up speed, | :00:46. | :00:49. | |
expanding by 7.5% in the second quarter, and in June. Let's go to | :00:50. | :00:55. | |
Beijing and join our correspondent Martin. What factors have basically | :00:56. | :00:59. | |
boosted the Chinese economy from April to June? On the face of it, | :01:00. | :01:06. | |
these figures will obviously be welcome, 7.5%, but when you look | :01:07. | :01:11. | |
behind the figures, what is bolstering them, I think many | :01:12. | :01:15. | |
analysts will say that they are being pushed by a government | :01:16. | :01:20. | |
stimulus programme, which is now bearing fruit. If we look at for | :01:21. | :01:25. | |
example, some of the banks have reduced their holdings, in order to | :01:26. | :01:31. | |
lend more money. Panellists would say that this growth will not be | :01:32. | :01:35. | |
sustainable without more government support, and one big area of concern | :01:36. | :01:42. | |
is, of course, the once booming property market, which is beginning | :01:43. | :01:45. | |
to slow. Many analysts would say that if it slows sharply, that could | :01:46. | :01:51. | |
pull down overall economic growth. Indeed, the property sector is a | :01:52. | :01:55. | |
major headache for the mainland officials. Why the economy was up | :01:56. | :02:02. | |
was because of targeted stimulus measures... Do you think they could | :02:03. | :02:05. | |
introduce more of them going forward? To sustain expansion? The | :02:06. | :02:12. | |
Premier has said that the targeted 7.5% and it has been hit today. | :02:13. | :02:17. | |
Obviously, they want to hit that in the future. Most analysts want to | :02:18. | :02:23. | |
unveil smaller measures, and the danger always is that there are | :02:24. | :02:29. | |
bubbles in the economy, and you can kick the can down the road, and not | :02:30. | :02:33. | |
deal with fundamental problems in the world 's second`largest economy. | :02:34. | :02:39. | |
Thank you be joining us. `` thank you for joining us. Despite this, | :02:40. | :02:44. | |
there are concerns about a stronger slowdown in the property market, | :02:45. | :02:49. | |
which makes up 20% of China's economy. | :02:50. | :02:51. | |
Our correspondent joins us from eastern China. | :02:52. | :02:56. | |
Despite the looming clouds on the economic horizon, this city, like so | :02:57. | :03:02. | |
many Chinese cities, has kept on building. Now, it may have become | :03:03. | :03:09. | |
the first to face the storm of overcapacity and unsold housing | :03:10. | :03:15. | |
stock. This year, something previously unheard`of is rife. | :03:16. | :03:19. | |
Massive property discounting. This brand`new apartment is being | :03:20. | :03:24. | |
advertised with 30% off. That leaves those who paid the original price | :03:25. | :03:29. | |
furious. China has been through property wobbles before, and the | :03:30. | :03:34. | |
question this time is whether it is another adjustment or something more | :03:35. | :03:39. | |
serious and systemic. Some observers suggest that if this country 's | :03:40. | :03:43. | |
massive construction boom really is unwinding in a catastrophic way, | :03:44. | :03:48. | |
then it could by two percentage points off GDP at a stroke. Many | :03:49. | :03:56. | |
analysts had feared the market the years, and important engine of | :03:57. | :04:01. | |
growth is posing the biggest risk, there is talk of further government | :04:02. | :04:05. | |
action to support home sales. Others, like this estate agent, so | :04:06. | :04:10. | |
that the danger is limited. Chinese families have lower debts than those | :04:11. | :04:15. | |
in the west, so they are less vulnerable to price falls. Anyway, | :04:16. | :04:18. | |
he says that it's all about the sheer weight of numbers. People from | :04:19. | :04:24. | |
the countryside are still flooding to the cities, for better education | :04:25. | :04:30. | |
and life. The demand will always be there. The Chinese government | :04:31. | :04:35. | |
agrees, it is urbanisation, it says, that will ultimately keep growth on | :04:36. | :04:39. | |
track. But if so, critics are beginning to wonder why so many new | :04:40. | :04:44. | |
homes are still empty, and why prices are so damp. | :04:45. | :04:52. | |
The US central bank is the most powerful financial institution of | :04:53. | :04:54. | |
its kind in the world, and controls the flow of trillions of dollars of | :04:55. | :04:59. | |
bonds, when the banks boss speaks, the world listens. And today she | :05:00. | :05:04. | |
warned a stretched valuations for social media and biotechnology | :05:05. | :05:07. | |
companies, and danger signs for the global economy. | :05:08. | :05:12. | |
Prices of real estate, equity and corporate bonds have risen | :05:13. | :05:16. | |
appreciably, and valuation metrics have increased. But, they remain | :05:17. | :05:21. | |
generally in line with historical norms. In some sectors, like lower | :05:22. | :05:30. | |
rated corporate debt, valuation is stretched, and insurance has been | :05:31. | :05:40. | |
brisk. I asked what is behind her concerns. It is about financial | :05:41. | :05:45. | |
imbalance, it is what has been talked about, low interest rates | :05:46. | :05:49. | |
breeding financial excess. What she is effectively warning is that rates | :05:50. | :05:52. | |
can go up and you have to be careful. She also talks about the | :05:53. | :05:58. | |
economic outlook in the US, and continues to champion it. She says | :05:59. | :06:07. | |
the labour market is slack, the Fed have to keep interest rates low for | :06:08. | :06:11. | |
as long as possible. It is unlikely that interest rates will go up as | :06:12. | :06:16. | |
fast as the market expects. She will keep interest rates low, but how do | :06:17. | :06:20. | |
you think this could impact the monetary policies of Adrian `` Asian | :06:21. | :06:26. | |
central banks? Those linked to the dollar, and in Singapore, to some | :06:27. | :06:33. | |
extent, and there are those who run independent policies, like New | :06:34. | :06:36. | |
Zealand. The policies linked to the dollar will follow. Automatically. | :06:37. | :06:42. | |
Those that don't are not concerned by domestic conditions. New Zealand | :06:43. | :06:45. | |
have raised interest rates, you have high interest rates in Indonesia, | :06:46. | :06:51. | |
and in India. What about the economies that have basically kept | :06:52. | :06:57. | |
interest rates low with their monetary policies? How will they | :06:58. | :07:01. | |
react and move with the latest statement from Janet Yellen? You | :07:02. | :07:05. | |
have career who have kept interest rates low. They will not do anything | :07:06. | :07:10. | |
until they see a pickup in global growth and trade. And in the | :07:11. | :07:15. | |
domestic economy. Shares in the ship maker Intel have risen by 4% when | :07:16. | :07:24. | |
the company grows profits. It has gone up stronger than expected. | :07:25. | :07:29. | |
Intel also expected growth for the remainder of the year. Shares in the | :07:30. | :07:37. | |
Internet giant Yahoo have rebounded after a fall, an 18% rise until the | :07:38. | :07:42. | |
end of June. Revenue will drop, falling by 3%. Most of the decline | :07:43. | :07:47. | |
was due to a sharp drop in digital and display advertising which | :07:48. | :07:51. | |
plunged by 8% in the second quarter. Apple and IBM are joining forces in | :07:52. | :07:56. | |
a partnership to design applications for iPhones and iPods. IBM will | :07:57. | :08:01. | |
begin selling Apple devices preinstalled software to business | :08:02. | :08:05. | |
clients. They were once rivals, but experts say it is too soon to know | :08:06. | :08:09. | |
how significant the deal will be. Leaders of the world 's largest | :08:10. | :08:13. | |
emerging economies meeting in Brazil have signed a new agreement, a 100 | :08:14. | :08:20. | |
billion dollar reserve fund. They will be recording in Shanghai. | :08:21. | :08:30. | |
The fact is that the BRICs countries have always felt that they lose out | :08:31. | :08:33. | |
when it comes to the global financial institution, the World | :08:34. | :08:36. | |
Bank has always had an American president, the IMF has had a | :08:37. | :08:42. | |
European leader, they feel these are emerging economies, they are | :08:43. | :08:45. | |
powerful and hold 40% of the world 's population, why shouldn't they | :08:46. | :08:48. | |
have more of a say when it comes to London? That is what the bankers | :08:49. | :08:53. | |
about, and it is what Brazil's president spoke, the fact that the | :08:54. | :08:57. | |
BRICs have the power to change for the good in terms of making things | :08:58. | :09:02. | |
fair and equal. The idea behind this is that they can fund projects in | :09:03. | :09:06. | |
the developing world, not only in BRICs countries, but they can extend | :09:07. | :09:15. | |
outwards to other emerging markets. They can have more of an influence, | :09:16. | :09:17. | |
on the emerging markets in the world. What will happen if the | :09:18. | :09:19. | |
International monetary fund, in this new body of the BRICs group of | :09:20. | :09:25. | |
nations, have a different or contradictory approach to deal with | :09:26. | :09:30. | |
the financial crisis? One of the concerns is that the critics talk | :09:31. | :09:34. | |
about the fact that the BRICs are more rivals than friends. Certainly, | :09:35. | :09:37. | |
up until the announcement was made early on Tuesday, there were | :09:38. | :09:41. | |
concerns that these new headquarters that would be in Shanghai men that | :09:42. | :09:46. | |
India would have a say, there are concerns in the rivalry between the | :09:47. | :09:50. | |
two countries. And in the wider BRICs as well. It is early days, | :09:51. | :09:54. | |
they have to iron out these issues. The bank has not begun yet, and how | :09:55. | :09:58. | |
the money will be spent is important. One of the crucial things | :09:59. | :10:03. | |
is that these countries will put in equal amounts into the bank, in the | :10:04. | :10:08. | |
start of it. It is an important role, that these institutions are | :10:09. | :10:12. | |
equal going into the beginning of the development bank. | :10:13. | :10:18. | |
Before we leave, we will tackle the aviation sector. Malaysia Airlines | :10:19. | :10:28. | |
have signed a deal to buy players. `` air Asia. It is worth $40 | :10:29. | :10:37. | |
billion, and it will start in 2018. Now, let's have a look at the Asian | :10:38. | :10:54. | |
markets. `` to buy planes. Thank you for investing your time | :10:55. | :10:57. | |
Sport Today is up next. This is BBC News. I'm Adnan Nawaz. | :10:58. | :11:07. | |
The top stories this hour. An attempt to introduce a ceasefire | :11:08. | :11:10. | |
in the Gaza Strip fails, with rocket attacks | :11:11. | :11:12. |