04/01/2016 BBC Business Live


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This is Business Live from the BBC with Sally Bundock and Ben Thompson.


A new year and fresh fears about the slowdown in China and it's


sending jitters through global markets.


Live from London, that's our top story on Monday 4th January.


Shares in Shanghai are suspended after a 7% plunge.


A slowdown in manufacturing is one of the key reasons why.


And also a change to share trading rules.


We'll be live in Beijing to make sense of the mayhem.


Also in the programme: Takata shares rise as Japanese car companies look


set to support the troubled airbag maker.


Our team in Singapore has the latest.


And it's the first trading day of 2016 Europe, it's a sea of red.


Would you pay to watch oerts play video games? One man thinks it is.


And would you pay to watch others play video games?


One man thinks you will and it's proving to be a huge success.


We'll meet the boss of video gaming TV channel Ginx and get


the inside track on the fastest growing entertainment sector


We want to know what are your financial New Year's resolutions?


What are you planning to do differently with


Save more, invest more, or spend more?


Let us know, use the hashtag BBC BizLive.


We are already talking about serious volatility on China's stock market.


index, the Shanghai Composite was suspended today after the market


It's been blamed on another slowdown in the manufacturing sector


which contracted for a fifth straight month in December.


The data suggests the Government may have to step in with more aggressive


stimulus measures if it wants to avoid a more dramatic


One of the biggest risks this year is a sharp depreciation


Experts also fear the number of corporate debt defaults


Economic policy could create turbulence ahead from the removal


of capital controls to efforts to rein in debt.


Even as China tempts to steer away from growth driven by its factories


With me now is Qian Liu, director of access China


Welcome. Some issues there and responses we have had from the


Chinese Government, now it's this newly launched circuit breaker plan,


the plan that's stopped trade when they fell by 7% there. Just part of


a raft of measures the Government have taken to ban things like short


selling. Some people saying it's worked on this occasion and stops


the market falling any more but it is symptomatic of a Government


trying to influence the way the stock market moves. Exactly. Now


this new idea of suspending the trading is really something that


started to be effective, actually from today, now that was introduced


after the stock market fallout in the summer of 2015. What


us is above everything else stability is the key thing that


holds China together. Now one key reason that led to the stock market


fallout today is from the purchase managers index. Both the Government


official number from last Friday and also the private one is both of them


are telling us numbers are pointing to a contraction in the Chinese


economy. What we are seeing today, part of that is


lack of confidence over Chinese economy overall. Depending on who


you believe and what you read, some say this is actually a good sign,


maybe China is over the worst, we have seen all the headlines of the


last six months where we saw a big fall in the value of the stock


market, we saw that in the depreciation, maybe 2016 is the year


things start to stabilise. Is that the optimistic view? Well, depends


on which particular sector you refer to when you say the worst is over.


When we look at China as a whole I say at least the best part, the


fastest growth is over, the good days of double digits and magic 8%


is over. The Chinese President is targeting at no less than 6. 5% in


the next five years and actually 2016 is the first year of the


five-year plan. One thing we can be sure is that China is not going to


have any next one or two years, there are many doubts over how much


China can sustain current growth. What I can safely say is definitely


not the next couple of years but there are more concerns over the


medium term, that is the 3-five years down the road. There are many


problems that can go wrong. For 2016 it's really managing the structural


slowdown and if anything property market, export and and service


sector are something that's worth paying attention and these are the


three sectors that might bring us upwards pleasant surprises. Thank


you for talking us through that. Remember full coverage of events in


China and that suspension of shares is across the BBC.


Despite China's economic slowdown, investment in the country's railways


grew last year with a total of 126 billion dollars being spent


A new high speed railway service in the southern Hainan province has


become one of the latest to start operations.


China now has 19,000km of high-speed track.


More than a million private cars are being banned from Delhi's roads,


as authorities begin testing drastic new measures to cut smog


in the world's most polluted capital.


For two weeks this month, private cars will be allowed


on the roads only on alternate days depending on whether their license


plates end in an even or an odd number.


Facebook founder Mark Zuckerberg has said he plans to build an artificial


intelligence machine to help him around the house and with his work.


In a Facebook post, he said his personal challenge this


year would be to build what he called "simple AI" and says


he plans to share his progress over the course of the year.


I would like one of those as well, frankly, Mark!


Gold rising by 1% today. Christmas sales down, I am guessing! Maybe.


Could be. But of course when stock markets around the world are


volatile, things like gold that's perceived as a safe haven tends to


creep up. Up another 1% this morning. Oil price spiking, as well.


We talked about China, also concern about what's happening with


Arabia and Iran, tensions in the Middle East. Possibly disrupting oil


supplies, there is a knee-jerk reactions today with the oil price


rising, up 3%. Full details there on the live page.


There is much more there too as well as oil, but also more on that news


that Chinese shares were suspended as we discussed as a result of that


slowdown in manufacturing but all sorts of things affecting that


trade. Mariko Oi is in our Asia business


hub in Singapore with the details. Shares are rising as much as 17% at


the moment, up by about 14%, the biggest rise in more than a year. I


should emphasise shares fell some 56% last year. It's mainly because


of a newspaper report by one newspaper that Japanese, the


Japanese car-makers might be putting together some financial aid for


Takata, the last time they did something similar was in 2011 after


that major stum and earthquawe -- time. The circumstances are


different, the airbags have been linked to ten deaths and Honda has


said that it's not going to investigate in Takata. It's still


enough to push up share prices. Thank you. Let's look at markets in


general. We talked about the fact it's not been a good start to a


brand new trading year as it were. Japan closing down 3%. Hong Kong


tracking, China also down. You can see the price of oil, now down


actually but as we mentioned up earlier around about 2%, 3%. That's


the euro. Look at how things are going in Europe today.


As I mentioned, pretty torrid session. I can't get the graphics


there. Earlier Germany was down, Paris down, London was also down.


All down around about 2% or between 1% and 3%. At one point Germany was


down over 3%. There you go. It's all there.


As you can see, pretty bad start to a brand new trading year.


China's a big issue but also concerns about what's happening in


the Middle East. James Hughes, chief market


analyst at GKFX, joins me. A new year, but the same old


problems when you look at the numbers there. Germany down about


3%, FTSE 100 in London down significantly. Is it just China or


is it the dawning reality that everyone's back in the office, and


there is nothing really excited about? Yeah, there is that


kind of depression feeling in the markets when you come back on the


first day but it is China, I think whenever China has any kind of blip


and it doesn't have to be big these days, the rest of the markets do


tend to get a little bit scared and freak out a little bit and that's


exactly what we are seeing. First exactly what we are seeing. First


day back, bad news out of China. Big falls on the down side. Interesting


to see what happens later in the US to see if it snowballs. The US


markets look low, as well, it could be across the board today that we do


see a negative start to the year. New rules in China. If you put a


trading, it goes down 7% and we stop trading, it goes down 7% and we stop


trading. 5% they put in, this isn't just in China. We have this in the


UK where if markets go down a little bit too much then shares get


suspended. But you put this in and it does tend to happen. That's


exactly what's happened. In China what we have in the next few weeks


is a lot of other measures that were put in by the Chinese Government


will be lifted so there is a worry will be lifted so there is a


that as more and more policies get lifted that were put in to stop this


slowdown that things could get uglier in China. We talked about a


new normal of slower growth, still subtanks by European standards but


nonetheless slower growth -- substantial. New lower oil price. Is


it the case people say we start 2016 we have to reassess what we think is


year on that? Yeah, and we kind of year on that? Yeah, and


go back a little bit with rates to that point, as well. We all have


this obsession with moving interest rates higher but that's to take us


back to the sense of what we thought was normality but that was normality


pre-2008 and that world doesn't exist any more. There is a little


bit of that. The oil prices aren't going too much higher in the near


future, China is going to stay negative, as the last - the boom


years have gone out of China are looking at a different world


this time. What we are doing is creating the rules for that


currently at the moment. In the next 12 months or so it's going to be


interesting just to see how the landscape is at the end of this


year, what rates are doing and where markets are going. We will watch


closely. James, thank you very much. We will talk through the papers


later. This is something James would day.


He would pay to watch other people playing video games. He confessed


that to us earlier. Would you do that? E-gaming is the fastest


growing entertainment sector in the world.


Now a look at some of the stories from around the UK.


The UK economy finished 2015 with a burst of speed,


It looks as if the CBI said overall the economy looked strong in the


fourth quarter, business services did well. Those people exposed to


consooner spending did well, that's the good. The bad, manufacturing


shrank a little bit and the ugly is the fact that export performance was


at a six-year low. Not the rebalancing that both the Government


and business groups wanted to see. We won't get the official numbers


until the end of looks like overall it's a good


picture but not a balanced one. Simon, what about the fact that


apparently this survey points to the UK companies backing EU membership


has fallen a bit, is that significant or not? I think so.


Deloitte, the big accountancy and consultancy firm do a survey of


chief financial officers or finance directors and found back in June 74%


supported Britain's membership of the EU, that's down to 62% so not a


huge change but if that was an election poll which in a way it is,


people would take notice. Only 6% say their companies would be bet


iroff out of the European Union but that's up from 2%. A lot saying wait


and see. The mood music out of Europe at the moment is pretty


miserable. Assessments on growth conditions over there, the migrant


shift but one that's going to make negative outlook. Not a massive


shift but one that's going to make some people sit up and take notice.


Thank you. The front page of today's Financial


Times they had a survey of 100 economists they spoke to. Most of


whom argue it is better for the UK economy to stay within the European


Union. That debate is just going to Union. That debate is just going to


go on and on. I have a feeling we go on and on. I have a feeling we


will be talking about that a lot will be talking about that a lot


this year! One story to bring you. Good news, we were talking about oil


prices creeping back up. Diesel dropping to below ?1 a litre for the


first time since 2009. Good news for Britain's 11 million diesel drivers.


It says prices on the fore courts dropping all of this and the big


supermarket chains are dropping prices. A drop in diesel.


Our top story, shares in Shanghai are suspended as traders eye a sharp


Stocks fell by 7% before trade was halted.


Part of new rule to stop big losses on one of the most influential stock


markets. The repercussions is being felt around the world.


E-gaming is one of the world's fastest growing entertainment


Professional players earn multi-million dollar prizes.


A staggering 344 million people watched the championships


for the video game League of Legends last year and there are even TV


Ginx is one of them, with subscribers in Europe,


It's Chief Executive Michiel Bakker knows all about running


He was one of the founders of MTV Europe.


Michiel spent 20 years building what is now


Viacom International Media Networks, and has been Chairman


After leaving MTV, he took time off to travel and learn to sail yachts.


At the helm of Ginx, he has overseen its latest


round of financing, via crowd funding, to meet their target


Welcome to Business Live. Let's of Ginx TV, is here.


Welcome to Business Live. Let's start with this concept of people


paying or subscribing to watch other people play video games. It is


fascinating because if you are a gamer, you will know all too well


about this and we were discussing this earlier, people do this, they


look for tactics and strategy and how you might do better at these


will not have a clue that something will not have a clue that something


like your channel exists. It really like your channel exists. It really


is a big growth area, isn't it? It is. You focussed a lot on e-sports


in your package there. Ginx is about all video gaming and console gaming


and what happened to video gaming, it moved from the preserve of the


15-year-old boy in their bedroom playing games to a more massively


mainstream activity. So you see all over the world stadium packed with


being played between teams and it is being played between teams and it is


the excitement, it is not dissimilar than watching Chelsea v Manchester


United in more traditional sports if you will and that's and you say it


doesn't appeal to non gamers, but in fact what I see happening is that


just the dynamic environment and the tension and the commentary is


drawing people that are not considering themselves to be core


gamers into this excitement. A lot of it is the content, isn't


it, as with any television channel, you have got to have the right thing


on the channel for people to subscribe, pay to watch. How do you


find content for Ginx? Where do you go? Well, we have a luxury, of


course, of a flow of content coming out of the gaming publishers every


year. There are thousands of games being developed. How do you find the


right content? The people that content, that it is a must watch for


the exclusive environment of trying the exclusive environment of trying


to get a game that you can only see on Ginx or that's one way to go.


Exclusivity is not a natural way to attract people. The other is to


highlight games in a way that is not done usually. The video gaming world


has grown up in a silo on the left and TV is in a silo on the right and


Ginx it is in between. We treat video games very much


entertainment and less, you know, we entertainment and less, you know, we


are less about the 50 million lines of code. You can delve deeply into


video gaming, but we tend to approach it as more of


entertainment, broad spectrum way to make it appealing to as many people


as possible. It is interesting now that mainstream sponsors, the likes


of people who would have sponsored the big games are getting involved


in e-gaming and television channels such as yours, they are able to


access a niche gamer, a person they want to target that they can't get


anywhere else? There is two types of brands that come in. You're right to


point out that there are bigger brands now looking to come into this


predominanty male audiences which congregation of 16


predominanty male audiences which are the most elusive television


audiences to attract, brands want to be there. So whenever something like


this moves into the mainstream, you can see mainstream brands coming to


that and that benefits everybody because it creates that sort of echo


system that more investment can go into e-sports and therefore, it can


become even bigger and better and broader and get more adapted around


the world. So yes, it is a good thing overall. Really nice to see


you. Thank you for coming in. We could talk all day about it. We have


many more questions, but time has got the better of us. Thank you for


coming in. Virtual reality is being billed as


the next big thing in tech and it may become true. Millions of people


will be able to use it in their own homes as Sony release for sale their


virtual reality head-set, but beyond gaming all sorts of uses are being


explored. Here is our technology expert. In a freezing cellar with


fake snow under foot, I'm inching my way up the world's highest peak. I'm


getting a view of Everest, a virtual reality game out later this year.


The manufacturers believe gamers are ready to immerse themselves in


virtual worlds. It is the natural progression. We have got bigger


screens. We have had 3 D screens and screens. We have had 3 D screens


we have had curved screens. The next we have had curved screens. The next


thing is taking us into a virtual environment and locking out every


bit of stimulus so we are focussed on what they are trying to tell


Getting into a us. Lift, especially one as old as this, could be a scary


experience for some people. So could virtual reality help them get over


their phobia? I have come to see how psychologists are working with the


technology. I am going to focus on technology. I am going to focus on


your breathing and muscle tension. They have developed a programme that


allows patients to try out the experience of getting into a lift.


You sweat, your breathing changes. You get a physiological reaction


which you don't get in the 2 D environment. Let's see if it worked.


How does that feel now? I'm honestly quite proud that I'm doing this!


LAUGHTER You should be proud. Do you think


all? Honestly, I would have been all? Honestly, I would have been


taking the stairs about a month ago! That's an amazing story. It really


is. James Hughes, chief market analyst


at GKFX, is back with us to look at what's making business


headlines in the papers. Winners and losers and the FT has a


piece talking about the winners, well there were nine of them and


tech stocks. Yeah and these are the tech stocks. Yeah and these are the


real staples of these markets. The markets 2015 was a terrible year for


equity markets. Particularly in America as well? Most stocks down,


but this is the first time I heard this, the fangs, Facebook, Amazon


and net flick and Google. These stocks did so well and Netflix was


an interesting one. One of the an interesting one. One of the


year, their Chief Executive said announcements of their figures


year, their Chief Executive said about the market going up so


strongly, he said he had no idea why the share price keeps going up


because we're not actually in that good shape where his words! He is an


honest man, isn't he? They went up further on the back of that. Fangs,


Facebook, Amazon, Netflix and goodbyele are the FANGS!


Take back Tuesday was the Tuesday after Christmas. Did you have to


take stuff back, James? I didn't take anything back because anybody


that bought me gifts bought perfect. This week and next week, we see the


big retailers come out and give us information on how the Christmas


period... It has been raining hard. The wrong weather. Boxing Day, foot


centres was up 3.9%. That's because centres was up 3.9%. That's because


people need to get out of the house! After the rain, they need to be


under cover! That's true. Hopefully retailers for December, which of


course, is pivotal, are going to be slightly better off this year


because last year, it was the first time ever that online sales beat


foot fall sales. It will be so interesting to see the retail


figures. Thank you, James.


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