26/10/2015 BBC Business Live


Similar Content

Browse content similar to 26/10/2015. Check below for episodes and series from the same categories and more!



This is Business Live from BBC News with Sally Bundock and


All eyes on China, where leaders are gathered for their four day meeting


to discuss the nation's economic and social plans for the next five


years - but what tricks does China have left up its sleeve?


Live from London, that's our top story on Monday 26th October


A cut in interest rates at the end of last week has given


markets across Asia a boost but how optimistic can we be about


the Communist Party's ideas for the world's second biggest economy?


Also in the programme - Toyota is back at the top.


The Japanese carmaker is the best vehicle seller


of the year so far - it's overtaken Volkswagen as it grapples with the


And a new trading week has just kicked off across Europe - markets


are mixed as investors grapple with the latest earnings news from some


And we'll be getting the inside track from the only female


chief executive at one of the top ten global accountancy firms.


Keep in touch with us on social media -


Today we want to know what would be in your five year plan


How can China kick-start its economy?


China dominates the headlines this week.


China's leaders are to gather for a four day event in Beijing


today for its fifth plenum - whatever is decided there will set


the agenda for China's policies in the coming five years.


Top of the agenda, unsurprisingly it's expected to be the economy.


The government's new annual growth target could be top of the agenda -


with a cut of growth target from 7% to 6.5%, but some are speculating it


The party will also shift the focus away from a dependence


on exports and extensive investment in infrastructure to concentrate


There could also be an increase in social welfare spending


and push for further financial liberalisation, including promoting


the internationalisation of China's currency, the renminbi.


Dr Linda Yueh is a Professor at London Business School joins me


Good to see you. China very much charted a course in 2003 when it


started doing these plans, from a farming nation into one of mass


industrialisation. Now the process has finished, where do they see the


engine for growth in the future? They certainly see it in a new


sector, services. Something that would be familiar to advanced


economies, but for something like China it is a massive structural


change, from being a manufacturing power to having its economy already


predominantly driven by professional services, educational services,


restaurants. That transformation is not the only one they have to


contend with in this 35 year plan. They also have to work out how you


drive growth, when we move away from factories producing things that can


be sold by exports. They have to come up with more innovative ways to


sell exports, including in the services sector. Over the last five


years, they averaged about 7.8% growth. Do you think they will stick


with that will do away with that target? I think the growth target is


likely to be lowered. The 25 year plan, from 2011 until 2015, that


have an average growth rate of about 7.5%. They have pretty much exceeded


that. Looking forward, there is not a great deal of confidence. They


want to sustain that kind of growth rate, but I don't think they could.


It is more realistic to grow at 6.5%, or even lower than that. There


is no question, that growth rate will be the single target that


everybody will be watching for. I have looked at the five-year plans,


and there is going to be at least 30 to 40 qualitative, as well as


quantitative plans. The other one to watch for is what they do in terms


of the share of the economy coming from investment, compared to


consumption. Briefly, credit growth is vastly outstripping economic


growth. Do you think China will come up with a plan in time for its debt


mountain? They tend to say things like they want financial stability.


Yes, that is one of the reasons why they don't want to grow through


investment any more. A couple more targets to watch for, they usually


have a money growth target. That gives you a sense of how much credit


they want to unleash on the economy. Beyond that, I would keep an eye out


for overall rebalancing targets. They were pretty good in the last


one, but I think the next one is going to be a lot harder, especially


in terms of exports. We are going to leave it there, lovely to see you.


Time for a quick look at some other news:


It's not quite signed, sealed or delivered, but the


long-awaited sale of Japan Post and its subsidiaries is getting closer.


Shares in the main holding company for the


state-owned giant have been priced in the top of the expected range.


That raises 693 billion yen - that's about $5.7 billion.


Investors from Japan will be able to buy 80% of the shares,


with the other 20 available to international investors.


And bankers at Royal Bank of Scotland will soon be using Facebook


to communicate with colleagues, swap information and, even,


It's the first bank to adopt Facebook At Work and aims to


connect people across the company more quickly and efficiently to


'S been a busy day. Lots of companies out with earnings, we


can't imagine everything in the show, so please look at the website,


because they talk about stories as they break. This is about Phillips.


better-than-expected quarterly better-than-expected quarterly


profits, off the back of strong orders for US health care


businesses. We this earlier. They think it is all


about chronic they think they are going to be


doing well. I spoke to the chief executive earlier and he was talking


about the fact that one of businesses they are trying to sell


off, they have hit a regulatory hurdle in the US. That was one of


morning. Other stories, we can't imagine them more, more about RBS


and Facebook, quite an interesting new manoeuvre on the part of RBS. I


can't see us using Facebook at work. We would never do that, would we?


Never, Now, as Volkswagen deals with


the diesel emissions rigging scandal, Toyota is pulling ahead


in terms of global vehicle sales. Mariko Oi is in Singapore - Toyota


is taking full advantage of trouble Indeed, if you remember, in the


first six months of this year, Volkswagen overtaxed Toyota in sales


numbers for the first time, which was very exciting for the German car


manufacturer. As you say, as we have been reporting, VW now has this huge


scandal which affects its reputation, as well as sales


figures. In the first nine months of this year, Toyota sold about 7.5


million cars, while Volkswagen sold just over 7.4 million. Now, experts


believe that Toyota will keep the top spot as the world's bestselling


car manufacturer. It lost its top position back in 2011 because of the


huge earthquake and tsunami. It regained it in 2012 and has


maintained its ends. It looks like Toyota will keep the spot for this


year. Thank you very much. Very interesting, in the case of Toyota


and VW. They have both actually said that part of the obsession to be the


number one in the world has meant they have perhaps seen some elements


falling behind. Talking about the big recall crisis at Toyota, you


will remember that well, not many years ago. Looking at markets across


Asia, Hong Kong is flat, that was the close on Friday in the United


States. These markets are still digesting the latest move on the


part of China, when it comes to cutting interest rates in China.


Europe has been going for about 40 minutes. Brand-new trading week. As


you can say, it's all going in the wrong direction. That is despite the


fact we had good news from Peugeot. It says it is much stronger in the


third quarter. WPP, we will talk about that later. Also, I spoke


about Phillips, I spoke to the boss, their sales are strongly as well.


And now Nada Tawfiq can tell us what will making the headlines


in the business world in the United States today.


Earnings season is still in full swing with a number of major


companies reporting, such as Apple, Twitter and Alibaba. Up first is


Xerox, which expects the first quarterly loss since 2010. An


increasingly digital marketplace has affected the company, widely known


for paper copiers and printers. It is now shifting its focus to its


government health care business. But that has not come without issues.


Interrupted projects in California and Montana will hurt the company


this quarter. Also on Monday, figures on new home sales are


released, which helps determine consumer confidence and translate


into economic momentum in other industries. On Tuesday, policymakers


will begin a two Dave meeting. No rate hike is expected, but, as ever,


anything can happen. -- two day meeting.


Joining us is Jane Foley, Senior Currency Strategist, Rabobank.


We have a big week ahead. We have the Fed rate decision on Wednesday,


the bank of Japan on Friday. Do you think we are likely to see a bit


more stimulus when it comes to Japan? Probably not. The market has


been suspecting for some time that they need to go. Japan has an


inflation target which is 2%. Inflation is nowhere near. A lot of


analysts have been saying they are going to have to go, but that is not


the noises we have been hearing from the bank of Japan. They have been a


lot more upbeat than many economists. That suggests that it


won't. Many economists say that we needed, so it will be an interesting


meeting. We have to talk about the Fed. We do indeed. That meeting is


exciting, not necessarily because the market expects a move, they


don't, but we want to see if there are clues. Is there the possibility


of an interest-rate hike in December? If we go back about a


year, the start of the year, the market thought the Fed would hike


interest rates in June. We are now nearly in November and many people


in the market, the majority of people in the market, think they


will not be able to go until next year. Ben Bonallack was being


interviewed over the weekend on an American news channel and was


talking about how difficult it is for Janet and her team to get the


timing right. Many people say it is a poisoned chalice, never an easy


thing to do. Some of the corporate results, the stories we are reading,


some culprits are having a tough time. If we do see more stimulus


from Japan, from the eurozone, it means the dollar will probably


strengthen. We will see you later. She is not off the hook yet. She has


to do more in five minutes. We will be hearing from one of the top ten


global accountancy firms. Our guest is the only woman at her position in


the industry. The world's biggest ad agency,


WPP published their trading A strong three months from its


North America business helped it But there was a warning that many


of their clients are still focusing on cutting costs rather than


growing their businesses. You've been speaking to the chief


executive Martin Sorrell - what does He has a great knack of talking for


a long time so you can't ask any more questions. Did you manage to


get some end? I was prepared and headed him off at the pats. I think


he knows I'm not going to put up with that. Normally, when he talks


about his results, he gives a very clear, unequivocal picture about


what is happening in the global economy. He will say Asia is doing


this, Europe is doing that, the Americans are doing this. The


picture he painted today was a much, much more nuanced one. You have been


talking about some other factors that play into that. One of them, of


course, is the transition that is happening in China, away from the


investment and manufacturing, towards consumer led economies, less


of a focus on exports. The effect that has is that we have seen the


falling commodities prices has been very sudden and very dramatic,


particularly over the past year. I said to him, surely if we turn more


Chinese people into big consumers, that is going to be helpful for


advertising. He said, that is true. But that is not something that


happens overnight. We have to wait a little bit for that. What you have


been talking about, he said this could be a blueprint for the


company. We will be looking at that closely. Another thing, because it


is very much an international company, movements in the foreign


exchange markets. That has been very prevalent because of what central


banks have been saying. You have been reporting about what China has


said about dropping interest rates. The sixth time this year. It is a


very rapid change that is going on. He has said the central bank is


going to keep its foot on the easing pedal. That affect the currency


markets. As you have rightly pointed out, the company is very focused on


cost cutting. There is some information about bingo centres up


for sale. Our top story -


Chinese leaders begin a four day meeting to set out an economic


blueprint for the next five years. After massive industrialisation,


the big question now is whether it will manage to ease


the transition for the country to And now let's get the inside track


from the only female boss of any of Jean Stephens is


Global Chief Executive of RSM International and an advocate


of diversity in the workplace. RSM is a multi-national network


of accounting firms which together form the 7th largest


professional accountancy services Members employ over 32,000


people across the world. It includes some really big names -


including McGladrey in the US, Baker Tilly here in the UK


and Ruihua in China. Jean Stephens,


Global Chief Executive of Welcome to the programme. You were


in more than 100 countries across the world. That must be a nightmare.


You must spend a lot of time on planes. I sometimes live on a plane.


I spend about 75% of my time travelling. Meeting with members,


talking and sharing strategies. That was part of your ambition, wasn't


it? You wanted to work for a global company as opposed US company. Yes,


I trained as a CPA in the US, I graduated young and got my masters.


Explain that. Certified Public accountants. I am a chartered


accountant. I got my degree and then my license, I loved it, but I'll was


had a dream of living abroad, living and working abroad and being in a


different culture. Having the opportunity to come to the


headquarters in London with the then CEO, working with him for ten years,


and then we grew and developed and I was fortunate that they asked me to


take over when he stepped down. You've grown up throughout the


company, you've been there a long time. I wonder what the biggest


challenges for you must be, trying to manage a consistency across the


entire network when it comes to all the different cultures and people


you've got to work with, because there are lots of ways of doing


business. That is right, and it is what has kept me in this position


for so long. The issues that we have around the world are so varied, I


start my day with Asia and follow the time zones with regards to


talking to our members. I love that. We are very focused on client


service, adding value to our clients, working with them, with


their growth ambitions. As part of that, there are two things that I


really focus on, one is the quality structures we have within our


organisation, doing our very best to make sure that is the highest level,


and the other is the relationships we have with each other. If we can


connect very easily and seamlessly then that brings value to our


clients. We want to provide the services based on those


relationships. Something that is important to you is diversity, and a


big part of that is enabling women to claim the ladders. You are


actually in favour of quarters. -- quotas. How did you get to where you


are given many women say it is difficult to get to the top? Most


professions, we are still not at the level that I think we need to, to


have a well rounded workforce. I believe when you have diversity at


the table, not just gender but all diversity, it makes for better


business, and better decisions. Everybody agrees with that but it is


how you make that happen. It is multilayered, it is very


complicated, that I think one is having the conversations, the


current leaders need to set the stage for making that happen. I am


very fortunate to work within RSM, in a predominantly male profession.


I don't have my own children, so I'm able to devote a lot more time than


others could. That is just a reality of the world we are in. In business,


we need to make adjustments for the different needs our people have so


we can get that diversity. With regards quotas, we've been talking


about this for so long. I graduated a long time ago and we were talking


about it then, we are still talking about it. Everybody agrees we've not


made enough progress. The pace of change is not fast enough. Quotas


can help. They can mandate and drive change to the point where we don't


need them. Interesting that you say you don't have children. In the


Green room you said there is a recruitment that is 50-50 but you


said you see the fallout after eight or ten years. How do you manage to


get women to boardroom level and still be able to have a family? I


think it starts with women having a discussion with the employer, saying


this is what they need, and being flexible with regards the hours,


making it easy for women to have that, and families. It is not just


women, it is a family issue. When you talk in Scandinavian countries,


it is much more socially acceptable for them to take time off. We've got


to challenge all those things and having the discussion is very


important. It would be good to get to the point. Thank you for this.


There are lots of ways to keep up with BBC business. We would love to


hear from you, here's a reminder of how to get in touch. You can stay


ahead with all the day's breaking business news. We will keep you


up-to-date with insight and analysis from the team of editors around the


world. We want to hear from you, get involved on the web page. You can


get involved on Twitter. It is on TV and online. Jane is back and with us


in the studio to talk about the other stories out there. There is a


story in the Financial Times. This relates to sanctions. There have


been sanctions placed on Russian businesses. Banks have the job of


facilitating business. I work for a bank, we have all had compliance


training. We have had training with businesses that are sanctioned. This


investigation, reported in the FT, says the US authorities are


investigating some business that Deutsche Bank has been doing in


Russia. It is only an investigation at this stage, but they are saying


they are potentially investigating a breach of those sanctions. One of


the stories we were alluding to is what is going on with earnings at


the moment and the slowdown. The Wall Street Journal is looking at


this, companies warning they will see a dip in profits and sales. This


is fascinating. All year we've been debating whether it is doing well


enough for them to hike interest rates. This story suggests US


corporate, manufacturers are stressing out. One manufacturer says


the sector is in recession. We know that energy companies are under


pressure because of oil prices but this goes further in suggesting


other corporate companies are under stress as well. I would say that we


can take this back to the first quarter. A number of corporate work


complaining about the strength of the US dollar, the strongest


currency over the last 12 months, it has affected the profits of many


companies overseas. A story which caught our attention, the originator


of Green Black saying he regretted selling it to Cadbury. He says we


value corporate for how much they are valued for, not the number of


people we employ. Short-term as is the failure of capitalism. That is


such a deep ending. See you soon.


Download Subtitles