08/01/2016

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:00:08. > :00:17.This is business life. After a tumultuous week, Chinese shares jump

:00:18. > :00:22.and close high but concern now growing about a looming currency

:00:23. > :00:39.war. That is our top story on Friday eighth January.

:00:40. > :00:45.After the week we have had since August it has been a terrible time

:00:46. > :00:49.the markets, Chinese shares ending slightly higher but currency

:00:50. > :00:54.concerns cast a shadow over the week ahead. Copyright laws in China in

:00:55. > :01:01.question is a firm sees its merchandise confiscated in Las Vegas

:01:02. > :01:05.after claims of eight and infringement. The latest from the

:01:06. > :01:09.markets where European shares have edged higher after that rebound in

:01:10. > :01:15.Chinese stocks. And we will be getting the inside track on the US

:01:16. > :01:18.jobs market, it is that time of the month, one of the key barometers of

:01:19. > :01:24.the health of the world biggest economy will be released in a few

:01:25. > :01:29.hours but will it support the American central back? It raised

:01:30. > :01:35.rates last month, will the numbers support that? We will discuss that.

:01:36. > :01:41.And the European Space Agency has announced funds to put humans on the

:01:42. > :01:50.moon again. Would you be interested in signing up? Would it be money

:01:51. > :02:02.well spent? Please reply using the hashtag.

:02:03. > :02:12.Hello and welcome to the programme. So goes January, so goes the year

:02:13. > :02:18.and that is a worrying thought this week. The Chinese market has

:02:19. > :02:21.stabilised today, closing slightly higher but no celebrations yet

:02:22. > :02:25.because concern about growth in the Chinese economy still is alive and

:02:26. > :02:31.kicking and the strength of the Chinese currency is also causing

:02:32. > :02:39.concern and that is something that the Chinese authorities are wanting

:02:40. > :02:45.to change. In fact, the yuan hit a five-year low as the People's Bank

:02:46. > :02:48.look and to weaken the currency in the hope of sparking export growth

:02:49. > :02:57.but it sparked Alnwick and the central bank intervention led to an

:02:58. > :03:01.emerging market currency sell-off. Malaysians and South Korean

:03:02. > :03:05.currencies have both weak and while the South African rand is down more

:03:06. > :03:10.than 3.5%. The falls are not just reserved for emerging markets, the

:03:11. > :03:18.Australian dollar is more than 4% lower this week. But not all

:03:19. > :03:19.currencies are weaker, safe havens like the Japanese yen are moving in

:03:20. > :03:25.the opposite direction. Visit the start of a currency war?

:03:26. > :03:34.All of these central banks looked to be

:03:35. > :03:43.fighting to the bottom. We got our correspondence back from Singapore.

:03:44. > :03:50.Let's talk about that. A couple of days ago, we saw the China Central

:03:51. > :03:56.bank allowing the yuan to devalue. That makes Chinese stuff cheaper but

:03:57. > :04:04.you look at the other Asian manufacturers in the area,

:04:05. > :04:09.commodities, they don't want the currency to be more expensive. They

:04:10. > :04:12.are between a rock and a hard place, especially in the face of what we

:04:13. > :04:19.anticipate to be higher US interest rate this year. When the yuan

:04:20. > :04:23.effectively depreciates as a result of the central bank's movements,

:04:24. > :04:29.forced to make a decision, other forced to make a decision, other

:04:30. > :04:38.central banks, whether they allow their currency to weaken, as some

:04:39. > :04:43.have, for example the ringiit. Or do they strengthen in the face of a

:04:44. > :04:48.weakening yuan? They have to be competitive and remain competitive

:04:49. > :04:56.to try to export their way out of their own slowdown. Can we just

:04:57. > :05:02.explain? Let them all have weaker currency, what would that do? It

:05:03. > :05:06.means it's difficult to buy raw materials and make the stuff you

:05:07. > :05:12.need to in order... Like in US dollars. It makes it difficult to

:05:13. > :05:14.import goods into your country because that becomes more expensive

:05:15. > :05:21.and it puts pressure on ordinary consumers like you and me. Thinking

:05:22. > :05:25.about sending our kids to university, many Asians in the

:05:26. > :05:28.region have those ambitions, a lot of Asian corporates and companies

:05:29. > :05:32.have their debt in US dollars and that gets harder to pay off and

:05:33. > :05:37.becomes troublesome for the economy is on the whole. We have been

:05:38. > :05:42.talking about these so-called currency wars but can we accuse the

:05:43. > :05:47.People's Bank of China of deliberately stoking this? In the

:05:48. > :05:52.last month we have seen money escaping from the Chinese economy.

:05:53. > :05:57.They are just trying to stabilise their own currency. That is very

:05:58. > :06:02.fair. What we have seen in the last week is the Chinese trying to

:06:03. > :06:05.stabilise the yuan as this massive capital outflow you were describing

:06:06. > :06:10.is taking place and that is happening because there is this

:06:11. > :06:15.sense of pessimism and anxiety about the way the economy is going and

:06:16. > :06:19.that is being reflected, a metaphor we have seen in the volatility of

:06:20. > :06:25.the Chinese markets this week. What does the central bank, what

:06:26. > :06:30.mechanism does it have left? This is the only way it can try to stabilise

:06:31. > :06:33.the yuan but it is having a knock-on adverse effect, partly because these

:06:34. > :06:40.actions are not being particularly well communicated to the markets. We

:06:41. > :06:51.are running out of time. Thank you, great to see you.

:06:52. > :06:58.Let's take a look at some other news. Saudi Arabia is considering to

:06:59. > :07:00.sell shares in its vast state oil company.

:07:01. > :07:03.That's according to the kingdom's deputy crown prince Mohammed bin

:07:04. > :07:06.Salman in an interview with the Economist magazine.

:07:07. > :07:10.We will be talking about that at the end of the show.

:07:11. > :07:13.Saudi's public finances have been hit hard by the 70 per cent plunge

:07:14. > :07:16.in the price of crude oil over the last 18 months.

:07:17. > :07:18.Analysts estimate Aramco is worth over a trillion dollars,

:07:19. > :07:22.Saudi's public finances have been hit hard by the 70 per cent plunge

:07:23. > :07:25.even selling off a minority stake of 20 per cent could fund

:07:26. > :07:29.Samsung Electronics says its operating profit is likely

:07:30. > :07:34.The preliminary figures indicate that that sales are likely to be

:07:35. > :07:38.affected by weak demand in China and currency woes.

:07:39. > :07:40.Analysts believe the smartphone market is becoming saturated

:07:41. > :07:55.and the tech giant will face another year of weaker sales as a result.

:07:56. > :08:05.Samsung, Apple, they are all victims of their own success a saturated

:08:06. > :08:09.market! Let's talk about VW. Everybody knows about their problems

:08:10. > :08:15.with the diesel engines. It is suggested they made buy-back cars in

:08:16. > :08:21.the US because they say it will be cheaper to buy back the cars as

:08:22. > :08:25.opposed to fixing them. Around 50,000 cars could be purchased from

:08:26. > :08:36.their owners. I wonder how much that will cost. Let's see what else we

:08:37. > :08:43.have got. Samsung talking about those weaker numbers and the Apple

:08:44. > :08:47.share price, it has lost something like $20 billion of its value

:08:48. > :08:48.because it is cutting back production of the iPhone because

:08:49. > :08:50.everybody has got one! Let's take a look round the world

:08:51. > :09:06.at what's business stories This is an interesting one, a great

:09:07. > :09:11.story. A real controversy going on at CES in Las Vegas. There was quite

:09:12. > :09:17.a stir when a couple of US federal marshals turned up and started

:09:18. > :09:28.removing merchandise and pulling down signs belonging to a Chinese

:09:29. > :09:32.company. A silicon valley start-up called Future Motion accused this

:09:33. > :09:36.Chinese company of copying its design for an electric, board which

:09:37. > :09:42.it invented a couple of years ago. The Chinese version was on display

:09:43. > :09:48.at the show. It is also for sale on Ali Barbour for about a third of the

:09:49. > :09:51.price of the American company. The US start-up is not happy and the

:09:52. > :09:58.case will be in court next week and so far there has been no comment

:09:59. > :10:04.from the Chinese company. Fireworks in Las Vegas, thank you. The markets

:10:05. > :10:15.in China finished eight tumultuous week. -- a tumultuous week. We can

:10:16. > :10:18.see that the Dow Jones fell almost 400 points on Thursday as the

:10:19. > :10:24.Chinese turmoil spilled over to the local markets. But Europe,

:10:25. > :10:38.tentatively positive this morning. Oil prices moved around 1.5% higher.

:10:39. > :10:40.And now Nada can tell us us what will making the headlines

:10:41. > :10:45.in the business world in the United States today.

:10:46. > :10:53.Wall Street will have its eyes on China but the big domestic news is

:10:54. > :10:57.December's jobs report. Those figures will be released before the

:10:58. > :11:03.start of trade in New York and it is expected to show that employers kept

:11:04. > :11:08.hiring with non-farm payrolls increasing 200,004 the month and

:11:09. > :11:11.unemployment unchanged at 5%. That would point to continued strength in

:11:12. > :11:16.the labour market despite the pain being felt by US manufacturers who

:11:17. > :11:20.are suffering off the back of a strong dollar and weak global

:11:21. > :11:24.growth. It is also key data for the Fed to digest while considering

:11:25. > :11:29.future rate hikes. Investors will also get to hear from two federal

:11:30. > :11:42.Conservative committee members. -- Federal reserve.

:11:43. > :11:49.We were talking about this earlier, we have been covering this story all

:11:50. > :11:56.week. People might think that Armageddon is here! So much money

:11:57. > :12:05.off the markets. It is not necessarily that exchange. Give us

:12:06. > :12:12.something positive. It's not. Stock market tend to move quite sharply in

:12:13. > :12:16.short periods to factor in new news but when you stand back and get a

:12:17. > :12:18.broader perspective, the economic background is still pretty

:12:19. > :12:25.reasonable with reasonable growth in the UK, the US, things are improving

:12:26. > :12:28.in Europe and even in China growth is quite positive so when you have

:12:29. > :12:32.settled down and adjusted to this news, the background is pretty

:12:33. > :12:40.reasonable and we should seek market stabilising. I know you want to ask

:12:41. > :12:46.about US jobs, but we mentioned how January typically, set the tone of

:12:47. > :12:52.the market. This can't be the tone for the rest of the year! I hope

:12:53. > :12:57.not! We have to bear in mind, because of how the Chinese have

:12:58. > :13:00.handled the sale of state and companies, the currency and stock

:13:01. > :13:04.market interventions, those are pretty unusual events. I don't think

:13:05. > :13:12.January should necessarily set the tone. However, what if we see US

:13:13. > :13:15.jobs data coming out and disappointing? We have been looking

:13:16. > :13:20.to them to take up some of the slack. It's a fair comment. That

:13:21. > :13:23.data has been a fixed point, we have been quite confident that

:13:24. > :13:28.unemployment is reducing and things are improving in the States so we

:13:29. > :13:32.need that number to be close to what we are expecting otherwise it could

:13:33. > :13:34.upset everybody. We will leave it there, you will be running through

:13:35. > :13:36.the papers with us. It's seen as one of the most

:13:37. > :13:41.important economic releases in the world,

:13:42. > :13:43.but will today's US jobs number verify that the American's central

:13:44. > :13:46.bank did the right thing You're with Business

:13:47. > :14:01.Live from BBC News. And now a look at some

:14:02. > :14:04.of the stories from around Britain. And UK household debt has

:14:05. > :14:06.increased to a record high. Tanya Beckett's here to tell us how

:14:07. > :14:16.worried we should be. What is interesting about this is

:14:17. > :14:22.the fact that debt levels are now above where they were just before

:14:23. > :14:27.the financial crisis. The instability we saw as a result of

:14:28. > :14:32.that did not start because of UK debt but the fact we were heavily

:14:33. > :14:38.indebted as a nation and personally added to the pain of the aftermath.

:14:39. > :14:44.What the TUC is saying, this is a trade organisation, it is

:14:45. > :14:49.complaining that debt levels are high again and they are back to

:14:50. > :14:54.about a quarter of household income, and that is too high and the reason

:14:55. > :14:59.for that, they are saying, is that we are not earning any more fulsome

:15:00. > :15:05.if you adjust for inflation can we are earning less -- we are not

:15:06. > :15:09.earning any more. Full it says the government needs to act.

:15:10. > :15:17.It seems like we are going back to square one, we have people... You

:15:18. > :15:18.can't spend more than you earn or you shouldn't because it will come

:15:19. > :15:30.back and bite you, right? I think that is right, but what the

:15:31. > :15:34.TUC is saying, people are having to run up the debt because the income

:15:35. > :15:41.is not rising as inflation is. Therefore they cannot afford to pay

:15:42. > :15:45.their rent or mortgage is because the property values have gone up as

:15:46. > :15:50.well. That is the argument of the TUC. You are right in saying that

:15:51. > :15:54.maybe also you would have to dissect exactly why people are running up

:15:55. > :15:59.debts. People might be tempted to take out loans because interest

:16:00. > :16:02.rates are so low, and not look at the amount they have to pay back,

:16:03. > :16:11.just look at what they have to pay back every month. Very interesting,

:16:12. > :16:14.thank you. Have a great weekend! This is Games Workshop, fantasy

:16:15. > :16:20.model games were not so high up on the Christmas list this year, it has

:16:21. > :16:30.warned that sales in September were below expectations. It also holds a

:16:31. > :16:37.licence to sell Lord of the rings and the Hobbit battle games. We also

:16:38. > :16:39.had a comment from the biggest and most successful investor in the UK

:16:40. > :16:41.but we have no time to tell you! Chinese markets calm after circuit

:16:42. > :16:46.breakers are scrapped but currency concerns loom over

:16:47. > :16:52.the global economic outlook. And it's a Friday and so time

:16:53. > :16:56.to speak to one of our esteemed With the health of the global

:16:57. > :17:02.economy making headlines this week, investors in Europe and the US

:17:03. > :17:05.are nervously waiting for one of the key barometers

:17:06. > :17:07.of world economic growth, In December, 211,000

:17:08. > :17:16.new jobs were created. A bumper number that meant America's

:17:17. > :17:23.unemployment rate held at 5%. This month a reading

:17:24. > :17:30.of 200,000 is expected. Andrew Walker, our economics

:17:31. > :17:40.correspondent, joins us now. You know what, this is all over the

:17:41. > :17:47.place! All I know is that, I do not know what that 205 was, 200,000 is

:17:48. > :17:52.what is expected. 211,000 was November. And they had written

:17:53. > :17:59.December, we will take that out later on! Everybody watches these

:18:00. > :18:03.numbers, and the US Fed does as well, if we have got something less

:18:04. > :18:09.than 200,000, apart from being a shock for the markets, with that rub

:18:10. > :18:15.it into the American central bank saying, you should not have done

:18:16. > :18:22.that weight rise? -- rate rise? I doubt they would say it was a

:18:23. > :18:25.mistake to raise that rate the small amount we saw in December. It is

:18:26. > :18:29.more how it would affect their rate rise plans in the course of the

:18:30. > :18:34.year. Weak numbers could lead to them thinking carefully about

:18:35. > :18:37.whether or not to pull the trigger a second time. We know from the

:18:38. > :18:44.minutes of that December meeting, the one where they did make the

:18:45. > :18:47.decision to make the first rate rise, we know every member of the

:18:48. > :18:52.committee involved expects there to be a further rise of interest rate

:18:53. > :18:56.of at least three quarters of a percent by the end of the year. That

:18:57. > :19:02.is not a commitment, that is the expectation. If the data, including

:19:03. > :19:06.most notably the jobs figures, where to disappoint, then of course they

:19:07. > :19:10.would be willing and very keen to restrain themselves a little bit and

:19:11. > :19:15.wait longer than they have been expecting to before they make these

:19:16. > :19:19.further rises. Can I jumped in, and asks, we were talking about the

:19:20. > :19:23.currency depreciation at the beginning of the show. Could this

:19:24. > :19:27.disrupt the Federal reserve's plans for this year when it comes to

:19:28. > :19:34.deflationary pressure and what that means for us? Yes, and going back to

:19:35. > :19:38.those minutes, the committee did agree that there is likely to be

:19:39. > :19:44.some sort of restraining effect on exports from the US as a result of

:19:45. > :19:47.the weakness in emerging economies and I guess all tied up within that

:19:48. > :19:51.very much is what is happening to the dollar, the strength of the

:19:52. > :19:57.dollar which apart from affecting American exports does ring

:19:58. > :20:01.deflationary pressures into the US. They do not expect their target of

:20:02. > :20:05.2% is going to happen very quickly for inflation, they think it will be

:20:06. > :20:10.a couple of years, but there is certainly a possibility of weakness

:20:11. > :20:16.overseas leading to them pushing back the expectations of when the

:20:17. > :20:21.rates will move. Let's talk closer to home. Do you think 2016, are we

:20:22. > :20:29.going to continue seeing those two very different tales, the US and its

:20:30. > :20:35.gross, -- the growth, raising interest rates and a lag in the

:20:36. > :20:37.Eurozone? Is the recovery on track for jobs? There was certainly

:20:38. > :20:43.encouraging stuff in these jobs figures. If you look at the company

:20:44. > :20:48.'s most exposed to Financial Times, Italy, Spain, Greece even, set in

:20:49. > :20:53.and Portugal, -- exposed to the financial strain, there have been

:20:54. > :20:59.quite substantial increases in employment. There is concern about

:21:00. > :21:03.the low inflation, it has come up from negative levels we have had in

:21:04. > :21:06.some stages, but the ECB is still concerned about that. They will not

:21:07. > :21:12.be in a hurry to raise rates. There is a striking contrast in the

:21:13. > :21:16.employment figures, we had encouraging news in the crisis

:21:17. > :21:18.countries, but if you look at Finland, they are moving in the

:21:19. > :21:22.opposite direction and there is a distinctive story there, partly to

:21:23. > :21:27.do with the import and export market in Russia, so they have got some

:21:28. > :21:33.real problems in Finland. Also the decline of Nokia, so they have got

:21:34. > :21:36.real problems. Thank you very much. He is esteemed! Not just ordinary

:21:37. > :21:39.editors on this show! Let's take you back now

:21:40. > :21:42.quickly to our top story. Following a torrid week

:21:43. > :21:44.on the markets in Asia, Chinese stocks have closed the day

:21:45. > :21:47.slightly higher after regulators removed their new circuit

:21:48. > :21:51.breaker mechanism. Earlier our UK team spoke

:21:52. > :21:53.with Neil Woodford, one of Britain's most

:21:54. > :21:55.successful investors. He thinks the real issues in China

:21:56. > :22:10.are only just starting to emerge. What is in stark relief is that the

:22:11. > :22:14.problems in China are beginning to surface. The Chinese

:22:15. > :22:19.administration's ability to suppress all of that is getting more

:22:20. > :22:24.difficult. I think it is becoming much more obvious globally and

:22:25. > :22:29.domestic league, within China, that the economy is weaker than they

:22:30. > :22:32.admit to, there is probably a banking crisis around the corner. I

:22:33. > :22:36.have been saying for some time that I think that China's economy will

:22:37. > :22:40.have a hard landing. Much of what we are panicking about now is what we

:22:41. > :22:50.have been talking about as an investing institution for some time.

:22:51. > :22:56.You have been on twitter today, thank you! This one says, fixed the

:22:57. > :23:04.economic problems in Europe before we worry about the moon. This one

:23:05. > :23:12.says, I would like to see people, it is lonely on the moon. This one

:23:13. > :23:16.says, there should be a rescue mission bringing back that lonely

:23:17. > :23:24.old man. There was a UK advert at Christmas about the moon. James

:23:25. > :23:30.says, the mood has been done, let's go to another planet. And Ben

:23:31. > :23:32.Thomson, our own Ben Johnson says, can we send our into the moon! Very

:23:33. > :23:44.naughty! -- can we send Aaron! Let's start with this story in the

:23:45. > :23:55.Economist, this was the news that Saudi Arabia is considering selling

:23:56. > :24:00.to the public Aramco, possibly the world's most valuable company, but

:24:01. > :24:04.it is the secret that we know nothing about it. We can assume it

:24:05. > :24:10.is huge, because Saudi Arabia is the world's largest oil producer. The

:24:11. > :24:17.estimate is that ten times the reserve that Exxon Mobile have, so

:24:18. > :24:19.that is an enormous company. The Saudis need to improve their

:24:20. > :24:23.finances and this gives them an opportunity to do that. The price at

:24:24. > :24:25.which they sell the shares, if they do, will have to be something which

:24:26. > :24:30.is carefully thought through given the pressure that oil markets are

:24:31. > :24:36.currently under. Isn't this a sign of what is happening at the moment?

:24:37. > :24:41.The Saudi is having to sell some of the family silverware at the worst

:24:42. > :24:44.possible time. Exactly. They have got a lot of US Treasury bonds which

:24:45. > :24:48.they have already had to redeem, they will want to balance up where

:24:49. > :24:55.they are realising funds from this is of that process. This story, from

:24:56. > :25:01.the Financial Times, another Chinese billionaire has gone missing. Where

:25:02. > :25:04.are they going, Jane? We do not know where they are going and we do not

:25:05. > :25:08.know why. I think we can assume it is all part of the government's

:25:09. > :25:13.anti-corruption process. We do not know any more detail than that. I

:25:14. > :25:17.just want to tell you this, this is the guy who has gone missing, he

:25:18. > :25:20.went bankrupt twice before the age of 18. He cracked relaunching

:25:21. > :25:26.businesses until they were successful. He has not forgotten his

:25:27. > :25:31.roots, he has recreated part of his village inside the headquarters of

:25:32. > :25:34.his Shanghai business, complete with vegetable fields which are tilled by

:25:35. > :25:44.his farmer. Extraordinaire, only in China. This Powerball lottery, $75

:25:45. > :25:50.million in the US. I will get my tickets later! Always a pleasure,

:25:51. > :25:54.have a great weekend. That is it from us, plenty more

:25:55. > :26:10.business News throughout the day and on the BBC website.

:26:11. > :26:13.Good morning. After a week of continuous rain,