27/11/2015 BBC Business Live


27/11/2015

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This is Business Live from BBC News with Aaron Heslehurst and

:00:11.:00:13.

Russia prepares to crack down on trade with Turkey.

:00:14.:00:20.

But is it in danger of doing more damage to its own economy?

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Live from London, that's our top story

:00:24.:00:25.

Russia prepares for wide-ranging economic sanctions

:00:26.:00:41.

against Turkey after they downed one of their military jets

:00:42.:00:44.

And have you got that Black Friday feeling?

:00:45.:00:50.

From toasters to TV's, retailers are slashing prices today

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in a bid to get your cash, but is it worth the hype?

:00:54.:01:04.

As markets across Europe open we have the latest on the winners

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holiday but will open for a shorter trading day later.

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And we'll be getting the inside track on some of the biggest

:01:13.:01:15.

stories of the week, with our Business Editor Kamal Ahmed.

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the markets including the biggest merger in pharmaceutical history.

:01:20.:01:25.

Today we want to know what you think of Black Friday -

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Welcome to the programme. of time and money?

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It hopes to put in place sanctions against the country in the next few

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days - if the sanctions go ahead it's likely that both countries will

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lose out economically. The countries do $33 billion worth of trade each

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year - until events of this week that number was

:02:06.:02:09.

Now Prime Minister Dmitry Medvedev has called for a range

:02:10.:02:16.

of economic sanctions to be drafted within 2 days.

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There are fears the TurkStream gas pipeline project,

:02:20.:02:24.

which would supply Europe via Turkey, could be under threat.

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Russia has already advised its people not to travel to Turkish

:02:28.:02:33.

tourist resorts - normally the top destination for Russians.

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.5 visited Turkey last year. -- 4.5 million.

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It's already stepped up checks on Turkish food products - and

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It's also putting pressure on Turkish businessmen.

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39 delegates at an agricultural exhibition have been deported

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Sir Andrew Wood, a Former British Ambassador to Russia and now an

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Associate Fellow with the Russia and Eurasia Programme at Chatham House.

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Thank you for coming in. We are talking about bans and restrictions,

:03:10.:03:17.

they could hit joint investments between the countries, including

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that people in. Do you think that Russia is in danger of cutting off

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its nose to spite its face? Certainly. It is developed a habit

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of sanctioning everybody. They are very unhappy with the Russian

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population because the main seem trivial but depriving yourself of

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tomatoes altogether, that is a blow to people. We looked last year at

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the bands and the sanctions on food from the EU. Turkey had come in and

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had been filling that Hall and feeding effectively the Russian

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population. Are the in a situation where we might see popularity fall

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for the Russian leader because of this? I think this is a temporary

:03:59.:04:03.

phase. It is silent noise without having the long-term significance

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yawned making the idea of the close Russian Turkish alliance rather

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promote. The Turkish pipeline was a periodical idea. -- theoretical. It

:04:15.:04:23.

did not have a great future. The trouble is both countries are ruled

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by similar types of people. People who are easily insulted making the

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decisions. It is difficult to find any kind of face-saving formula? The

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Russians are accusing the Turkish Prime Minister of corruption.

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Biggest temptation for the Turkish people to return that compliment. On

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a day-to-day basis, which could put a dent in the economy, that is

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energy. Correct me if I am wrong, 57% of Turkey's gas comes from

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Russia. Turkey also buys energy like steel, wheat, if Roger was to turn

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off some of its gas, they might start with 20%, what does Turkey do

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with its energy? There are other countries in the region that have

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gas and oil to spear. -- to spear. There is the potential for gas in

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the Mediterranean. It would be get another one mistake on the part of

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Russia. I do not see either country having a real interest in taking

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this too far. I wonder how unique this situation is. Two countries

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backing the opposite sides of the Serbian war but they are of huge

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economic importance to each other. -- Syrian. From the respect --

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perspective of most of us, Russia will back President Assad and in

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this case to attack Turkish cousins just over the border. It was

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careless of the Russians to go so close to the border whether you

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accept if they went over it. They were asking for trouble and behaved

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with arrogance towards Turkey. The Turks are not prepared to put up

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with that and neither is the Turkish president. We should not be

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surprised by what happened. Thank you very much for coming in and

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talking as through that. The publisher of Hong Kong's South

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China Morning Post has confirmed it In a filing to the stock exchange it

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says it has received a 'preliminary The BBC understands that Chinese

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e-ecommerce giant Alibaba is Mining giants BHP Billiton and Vale

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have rejected a UN report which says mud released

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in the Brazilian mine disaster A village was engulfed and

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at least 13 people were killed when a dam burst at the San Marco

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iron ore mine. UN experts earlier said there was

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evidence the flood contained "high levels of toxic heavy metals

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and other toxic chemicals". BHP though says

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the debris poses no danger. Consumer goods giant Unilever

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says it will switch to using Its also pledged to stop using

:07:24.:07:25.

coal for energy within five years. The announcement comes ahead of the

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global climate summit which begins in Paris on Sunday - where almost

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200 countries will try to agree It is Black Friday today. Ben is out

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at an electronic store. It is not curry as in the food. This is a very

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unscientific poll about who is shopping today. There is nobody in

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the shop he is in. It is not the scenes that we saw last year where

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people were pouring in and fighting each other over flatscreen

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televisions. He says are braving the coast today, 91% of the people he

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has surveyed have said, no. We've only really had one year of Black

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Friday. I was going to talk to you about something else. Let us move

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on. Let's take a look round the world

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at what business stories are making In China stocks have fallen sharply

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- closing down more than 5%. Let's get more on this from Rajeshni

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Naidu-Ghelani who is in Singapore. There is a series of reasons. If you

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are events have shaken the investor confidence in the mainland market

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today. First we had disappointing data which showed industrial profits

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fell 46% and it over from one year ago. Igniting concerns of the

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economy slowing down. 4.6%. And then a crackdown by regulators on

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leveraging. And the biggest security firms saw big losses because

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regulators said they were investing major brokerages. We know there is

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increased pressure on the trading firms since the dramatic sell-off of

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Chinese shares in the summer. It is a first batch that would make a

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debut next week which will draw more liquidity from the market. Investors

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in China have quite a bit to worry about today. Thank you very much.

:09:50.:09:53.

You have a good weekend. The big drop in Chinese industrial

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profits plus the lower value of China's yuan appear to have set

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off a wave of selling And the bigger concern is certainly

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the potential for China to steadily Also a fairly disappointing range

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of Japanese data released today, Europe - the euro continued to

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falter, hovering near 7month low. Europe - the euro continued

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falter, hovering near a 7 month On expectations that the European

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Central Bank could announce further Now in the US the markets have been

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closed because of Thanksgiving. Today people will be trying to work

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off some of that turkey dinner as they hit the high street and hunt

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for some Black Friday bargains. Black Friday is now slowly beginning

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to spread around the world with European shops increasingly

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embracing the sales day. Here's a little look at what it

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means in the US, the UK and China. The United States for Black Friday

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as the day before buying is given, it traditionally marked the holiday

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shopping season. Last year, 87 million people rushed to the stores

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shop online for the chance to save money, spending $9 billion. Whether

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you can call it the most famous shopping day is up for debate. Each

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year retailers are bringing your sales earlier and earlier to out

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competitors. British retailers decided to get in on the act. One

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major credit card company reckons we will spend nearly $3 billion in the

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UK today. One third more than last year. The question is could this be

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the peak, fights broke out last year and some retailers are scaling back.

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Asda, owned by Walmart, are not taking part. Here in Hong Kong, the

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big day for discount shopping has already passed. China does not

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celebrate Black Friday, instead it has what it calls single speed,

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we're on the 11th of November, online retailers offer discounts of

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up to 70% off regular prices. The online shopping giant Ali Bacher

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run-up purchases of more than 14 billion US dollars. Making single

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state a much bigger sales stayed on Black Friday.

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Joining us is Mike Amey, managing director

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James Newman said, the reduction should be 80% for Black Friday, not

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25%. It is not worth it, I is spending the day at Chatsworth

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house. If you want to know where James Newman as he is at Chatsworth

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house. Have a lovely day. The ongoing concerns that Chinese

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currency could be devalued, explained to us by the IMF is set to

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include the Chinese currency as part of its standard drawing rights in

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the Baskett by the 30th of November. What does that mean? The IMF is the

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entity that lends to countries that nobody else will lend money. They

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are the lender of last resort. It is the question of what cash will be

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IMF want to lend to a country. You have to lend them cash which has

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value in all markets. They define that as including the standard

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drawing rights. Dollars, euros, Stirling and again. The benchmark of

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the global trading currencies. Being in that gang is a good gang to be

:13:59.:14:04.

in. -- the Japanese currency. That is official confirmation you are in

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the top tier. The euro is having its worst run in history against the

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Chinese currency, what is going on? Is it to do with policy decisions?

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The Japanese and the Europeans have been trying to print cash to keep

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the economy is going. The Japanese have tempered down their enthusiasm

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for printing cash and the Europeans are going in the opposite direction.

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As the Europeans start printing more cash and the Japanese hold fire, the

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natural response is the value of the usual has to go down due to the

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amount in circulation against the yen. We will see that next week. Do

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come back. We have got lots of papers to get through.

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Still to come we look back at the weeks biggest business

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stories, including the biggest pharmaceuticals deal in history.

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The US drugs giant Pfizer sealed a deal to buy the Botox-maker

:15:01.:15:07.

Allergan for $160 billion at the start of the week.

:15:08.:15:10.

The takeover could allow Pfizer to escape relatively US corporate tax

:15:11.:15:12.

rates by moving its headquarters to Allergan's Dublin base.

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You are with this is live on BBC News. Let us take a look at some of

:15:22.:15:34.

the UK stories. Earlier this morning, cut-price deals were put

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online overnight, Black Friday, we have heard about the expectations,

:15:39.:15:45.

and our very own Ben Thompson, last week we talked to you. He was in

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Salford and now you are in an electric store, Currys, on your own.

:15:50.:15:58.

What have you done to everybody? Welcome to Brentford and it is Black

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Friday, no repeat of those big crowds that we saw last year, you

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remember those pictures fighting over this sort of stuff, it was

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televisions, laptops, washing machines, to try and get their hands

:16:13.:16:19.

on some of this. Nonetheless, it is Black Friday so that means that

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retailers are trying to get more people through their doors to get

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more money through. All of those scenes of people fighting last year,

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retailers are very keen not to see a repeat of that because it was not

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good for business and Black Friday actually cost businesses money, in

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terms of extra security, opening their doors earlier. There is also

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the issue of all of those orders that coming at the last minute

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whether they can get to people on time. We have got somebody from a

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credit card company, what is in this for retailers, because it strikes me

:16:58.:17:01.

that there is a lot of added cost, do they make money? It is a very

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good question, it is yet to be proven as a concept, this is a

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concept that came through several years ago. Last year it only read it

:17:13.:17:17.

came in, it is only going to work if you get value for the customer. The

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deals, that you had to wait after Christmas for, we are now seeing

:17:23.:17:26.

some of those in the period before Christmas. Thank you very much

:17:27.:17:32.

indeed: More from you later, that is the issue, expected to be the

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biggest shopping day of the year, ?1 billion, many people choosing to do

:17:38.:17:43.

it online, no reports, of websites going down online, more from us a

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bit later, I will see you soon. STUDIO: There are more BBC people

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down at that store than apparently shoppers! It will be me later. You

:17:57.:18:08.

are watching business live, Russia is preparing wide ranging economic

:18:09.:18:12.

sanctions against Turkey after Turkey downed one of its military

:18:13.:18:17.

jets on the border with Syria, the Prime Minister Dmitry Medvedev says

:18:18.:18:19.

that the measures will be drafted within days and it could also hit

:18:20.:18:24.

multibillion-dollar gas and oil investments. Let us get the inside

:18:25.:18:29.

track on some of the big stories that had been hitting the headlines

:18:30.:18:34.

this week. Our business editor joins to take us through lots of things,

:18:35.:18:38.

but we are going to start with the big drug steel, I was on air that

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day. We are talking about the maker of Viagra, bought the maker of

:18:46.:18:52.

Botox. There is a joke there somewhere, we will not

:18:53.:18:57.

repeat it at this time of the morning. Pfizer is taking over

:18:58.:19:04.

another one, the Chief Executive of Pfizer remains the chief executive

:19:05.:19:08.

of the increased size to business if it goes through, and it will be

:19:09.:19:14.

called Pfizer. But technically it is a reverse takeover, the smaller

:19:15.:19:18.

businesses actually taking over Pfizer, that allows for this taxing

:19:19.:19:24.

version which is a key for Pfizer, in terms of the wider deal. It can

:19:25.:19:29.

move its domicile from New York where the corporation tax rate is

:19:30.:19:33.

35%, to Ireland where the corporation tax rate is 12.5%, you

:19:34.:19:39.

do the maths. That is why Pfizer thinks it is so important. Has the

:19:40.:19:43.

US not being trying to crack down on this? Yes but if it is a reverse

:19:44.:19:50.

takeover the rules are different? They have tried to tax down -- they

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have tried to crack on this type of taxing version, but there is

:19:59.:20:05.

gridlock between Democrats and Republicans so despite Obama wanting

:20:06.:20:09.

to rain this in, on what critics say is avoiding American taxes on

:20:10.:20:13.

profits globally, there has been no agreement about it. But I think

:20:14.:20:17.

there is quite a high chance that politics will intervene on this deal

:20:18.:20:22.

and maybe change some of the terms of the deal because the break fee

:20:23.:20:25.

which is usually put at billions of dollars for this, is only $400

:20:26.:20:30.

million if there is a political reason why the deal does not go

:20:31.:20:35.

through. It looks like the deal will not complete until the end of next

:20:36.:20:40.

year, Hillary Clinton, presidential candidate, has already said that she

:20:41.:20:44.

does not like the has Bernie Sanders. There is quite a high level

:20:45.:20:49.

of political risk in the deal, investors are worried about that

:20:50.:20:52.

because both share prices fell immediately after the announcement.

:20:53.:21:00.

We did see that. The other big story was the spending review, although

:21:01.:21:04.

the latest round of cuts are shallower, the British State looks

:21:05.:21:07.

like it is taking on quite a different shape in the future?

:21:08.:21:13.

Absolutely there is a feeling that the British economy is growing

:21:14.:21:17.

faster than expected, interest rate payments on UK debt will be lower

:21:18.:21:21.

giving George Osborne Finance Secretary some room for manoeuvre.

:21:22.:21:26.

What was very interesting of course, this has dominated western economies

:21:27.:21:30.

across Europe, is the question security being so important. The

:21:31.:21:35.

British government announcing increased funding for the security

:21:36.:21:39.

services, no cut in the police services domestically. I think it

:21:40.:21:43.

shows how much, countries like Turkey and Russia, Paris, France,

:21:44.:21:48.

the UK, the economy is now have to be assessed with the issues of

:21:49.:21:52.

security and that is dominating really the economic discussion. We

:21:53.:21:57.

are going to have to leave it there, I'm afraid that we have run out of

:21:58.:22:01.

time but we will have you on the show I am sure in future as always.

:22:02.:22:06.

In a moment we will take you through the business pays is but first, a

:22:07.:22:10.

video that has been doing very well on the BBC website, it is about the

:22:11.:22:16.

Dulwich picture Gallery in London, one of the first to offer a reality

:22:17.:22:21.

tour of the collection. The very first visual visitors were young

:22:22.:22:24.

patients at the nearby Kings College. Take a look.

:22:25.:22:38.

Della mac it is an art gallery with pictures everywhere, it feels like

:22:39.:22:44.

you are everywhere. I have been to quite if you are at galleries, it is

:22:45.:22:49.

quite realistic, you do get the feel of being there and seeing all of the

:22:50.:22:55.

paintings, it is really cool. It is not as good as the actual thing, it

:22:56.:23:00.

is not as good as a proper art gallery. You can definitely tell kit

:23:01.:23:04.

is fake but for a little person they probably think it is the most

:23:05.:23:06.

amazing thing in the world. That was a very Joe Mattock end to

:23:07.:23:15.

the peace and you can see many more videos on our website. What other

:23:16.:23:20.

business stories have been taking the media by storm? We just want to

:23:21.:23:26.

start with this one, this is in the Wall Street Journal, this is all

:23:27.:23:31.

about South Korea and being able to do a bit of a U-turn when it comes

:23:32.:23:35.

to its Asian problem, too many men? That is

:23:36.:23:43.

right, this is a great story, for a number of years, there is a

:23:44.:23:48.

challenge of too many men, male births compared to female births,

:23:49.:23:59.

150 to 120. Thankfully, Korea has led some movements to address that

:24:00.:23:59.

and normalise things and issue than Korea, if you look at

:24:00.:24:12.

things like China, the one child policy, if career can make this turn

:24:13.:24:14.

and great news. And in one generation?

:24:15.:24:25.

Yes. Speaking of population control, an astonishing story in China daily,

:24:26.:24:30.

Beijing is vowing control over population growth, 21 million people

:24:31.:24:36.

and they want a ceiling of 23 million. How will they do it? In a

:24:37.:24:40.

controlled economy thereof ways that you can do that. In reality, the way

:24:41.:24:46.

that you do it is that you move parts of the state out of ageing,

:24:47.:24:53.

whether it be state enterprises, if you say, for any particular

:24:54.:24:57.

department, it is going to move out, I think that is how they will do it.

:24:58.:25:01.

People want to go to Beijing because it is the centre of the action. I

:25:02.:25:06.

don't know how much time we have got. Eddie Jones, joins, he is now

:25:07.:25:20.

the England rugby coach commie was the Japanese rugby coach, Japan

:25:21.:25:25.

famously beat South Africa in the Rugby World Cup. He has got a very

:25:26.:25:30.

big thank you courtesy of the private sector, joining the board of

:25:31.:25:34.

Goldman Sachs in Japan. If he was short of incentives, there is yet

:25:35.:25:42.

another want to encourage him. There you go. That is it I'm afraid, thank

:25:43.:25:50.

you very much. You are going off to a shop to do some broadcasts. Will

:25:51.:25:56.

you pick me up something. That is it from business live, goodbye.

:25:57.:26:03.

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