:00:00. > :00:00.This is Business Live from the BBC with Ben Thompson and Aaron
:00:00. > :00:18.The China Conundrum - how to reform the world's second
:00:19. > :00:20.largest economy without causing financial chaos around the world.
:00:21. > :00:23.We'll assess what's at stake as China prepares for a new normal.
:00:24. > :00:36.Live from London, that's our top story on Wednesday, 17th February.
:00:37. > :00:39.We're taking a look at the latest moves by Beijing to try
:00:40. > :00:42.and re-ignite the world's seconnd largest economy and the impact
:00:43. > :00:46.that's having on investors around the world.
:00:47. > :00:48.Also in the programme: Asia's biggest aerospace and defence
:00:49. > :00:51.airshow is in full swing in Singapore.
:00:52. > :00:53.We will get the latest buzz from the world's fastest
:00:54. > :01:00.And as Iran says it will continue producing oil despite agreement
:01:01. > :01:03.between Saudi and Russia to cut production,
:01:04. > :01:08.we'll assess what markets make of the latest round of oil volatility.
:01:09. > :01:12.We'll get the inside track on the cost of HIV.
:01:13. > :01:15.The boss of specialist drugs firm Veev will be here to discuss
:01:16. > :01:24.the work being done to tackle and treat the disease.
:01:25. > :01:26.As Apple refuses to grant US police access to data
:01:27. > :01:29.on the iPhone of a gunman who killed 14 people,
:01:30. > :01:32.we want to know, should tech firms play a greater role in solving
:01:33. > :01:34.and preventing crimes or would it be an invasion of privacy?
:01:35. > :01:57.China is going through a difficult transition.
:01:58. > :02:00.Gone are the days of rigid socialism and it's starting to open the doors
:02:01. > :02:02.to more market-based economics of supply and demand.
:02:03. > :02:04.It's now one of the world's fastest-growing economies,
:02:05. > :02:11.a leading exporter and major overseas investor.
:02:12. > :02:14.But the turbulent start to the year on global markets highlighted
:02:15. > :02:17.After enjoying rapid growth for more than a decade,
:02:18. > :02:22.China's economy grew by 6.9% in 2015, compared with 7.3% a year
:02:23. > :02:27.earlier, marking its slowest growth in a quarter of a century.
:02:28. > :02:30.The government is trying to shift the economy to one driven
:02:31. > :02:33.by consumption and services, rather than manufacturing,
:02:34. > :02:40.exports and investment in state enterprises.
:02:41. > :02:46.But managing that transition has been challenging.
:02:47. > :02:48.There are doubts about whether Chinese data can be trusted.
:02:49. > :02:52.Critics say that real growth figures may be much weaker.
:02:53. > :02:55.And at the same time, worries about the devaluing currency
:02:56. > :03:01.Even though the yuan strengthened this week,
:03:02. > :03:03.thanks to China's Central Bank governor breaking his silence
:03:04. > :03:14.We hadn't spoke heard from him for six months.
:03:15. > :03:16.The BBC's Tanya Beckett spoke to Dale Nicholls,
:03:17. > :03:18.who manages a big Chinese investment fund for Fidelity,
:03:19. > :03:21.and started by asking him, if he thinks the authorities
:03:22. > :03:23.in China have coped with the stock market volatility well.
:03:24. > :03:27.I think there is probably a learning process going on there. I have got
:03:28. > :03:29.to be quite frank and say that overall I have been disappointed
:03:30. > :03:33.with the level of intervention that we see in the market when things
:03:34. > :03:37.started to correct and I think you could argue that there probably
:03:38. > :03:41.should have been a little more oversight as the market was moving
:03:42. > :03:47.up and we saw margin balances, you know, in the market really sort of
:03:48. > :03:51.expand significantly. But, you know, I do think, you know, the overall
:03:52. > :03:56.direction of the Government is towards opening up and reform and
:03:57. > :04:00.moving to a more market been based economy. I do think, if you look at
:04:01. > :04:06.things in the long-term, the progress that's being made and if
:04:07. > :04:09.you look at the direction that is set in areas, the direction is set
:04:10. > :04:14.for the long-term, it is about opening up and a more market based
:04:15. > :04:18.type of economy. What sectors do you think benefit particularly from this
:04:19. > :04:23.rebalancing that you're describing? Well, I still think really any
:04:24. > :04:26.consumption related. That's anything that is consumption related is going
:04:27. > :04:32.to be interesting for China in the medium-term. The Government has
:04:33. > :04:37.clearly made this goal that the economy needs to rebalance and the
:04:38. > :04:40.consumption needs to grow, but it will happen naturally, I think. It
:04:41. > :04:47.is just general development of middle-class. People want to have,
:04:48. > :04:51.if you look at just broad penetration whether it is autos as
:04:52. > :04:55.in cars, home products, the penetration levels are still very
:04:56. > :04:58.low relative to what you see in the west. In the IT space, in the
:04:59. > :05:04.internet area, it is very interesting and I think things are
:05:05. > :05:10.moving online globally, but you can argue that it is happening faster in
:05:11. > :05:13.China in a range of sectors as well. That was Dale Nicholls there.
:05:14. > :05:16.Charles Dumas, the chief economist for Lombard Street,
:05:17. > :05:21.an independent research house based London.
:05:22. > :05:29.Charles welcome to the programme. He was fairly positive and optimistic
:05:30. > :05:32.on China. Do you feel the same way? Well, I mean, the situation is worse
:05:33. > :05:38.than they're showing because the growth rate is about 3.5% or 3%, not
:05:39. > :05:43.7% or whatever they're broadcasting. That's the interesting point. The
:05:44. > :05:49.other thing is, it has been predictable for several years that
:05:50. > :05:54.this was going to happen and it is only a bunch of blind bulls who
:05:55. > :05:57.ignored it and now they are in a panic that they got it wrong and we
:05:58. > :06:01.are all in a panic with them. To pick up on the point about the real
:06:02. > :06:05.growth rate. The world markets got in a tiz about a slow down to 6.9%,
:06:06. > :06:10.you are saying it is significantly lower and this is what many people
:06:11. > :06:14.expect the reality on the ground is very, very different from what the
:06:15. > :06:18.official figures tell us? We recalculate Chinese growth and it
:06:19. > :06:25.comes out at 3%. But I mean, that's not so bad. The investment was
:06:26. > :06:29.ludicrous to nearly half GDP and saving was a little bit more. Both
:06:30. > :06:35.of them wildly high and unsustainable and they had to come
:06:36. > :06:39.down. So if 46% of GDP comes down, the whole economy gets dragged down
:06:40. > :06:43.which is why they have to weaken their currency. Now, the real
:06:44. > :06:49.exchange rate, the relative prices are being cut by massive deflation
:06:50. > :06:53.of 6% in the producer price index. So the Chinese are actually
:06:54. > :06:56.adjusting and they've got roughly speaking the right policies and we
:06:57. > :07:00.think that they'll pull through, but it will take three to five years.
:07:01. > :07:04.We're not talking about a quickie here. So we have got to brace
:07:05. > :07:07.ourselves that this is the norm for China as they get through this,
:07:08. > :07:13.three to five years, you mention the currency. We heard from the big boss
:07:14. > :07:19.of the China's Central Bank. He has been stumm for six months. He spoke,
:07:20. > :07:23.the currency strengthened in value. Well, the thing is, as you say, six
:07:24. > :07:27.you get to August. August is when you get to August. August is when
:07:28. > :07:32.they started making a fool of themselves in the stock market. I
:07:33. > :07:37.dare say the Central Bank governor was embarrassed by what they got up
:07:38. > :07:39.to because it was an extremely ineffective intervention in
:07:40. > :07:46.something which they clearly didn't understand. And that bungling was a
:07:47. > :07:50.big source of the subsequent financial market troubles.
:07:51. > :07:51.Charles, we're short and sweet, but we appreciate your time. Thank you
:07:52. > :07:56.very much for your insight. Iran signalled it'll take a tough
:07:57. > :07:59.line in talks among oil producers on curbing production,
:08:00. > :08:02.aiming to get output back up to levels seen before international
:08:03. > :08:06.sanctions were imposed. It comes as oil prices keep falling
:08:07. > :08:10.despite Saudi Arabia and Russia agreeing to freeze oil output
:08:11. > :08:23.if other producers follow suit. Japanese carmaker Nissan is to start
:08:24. > :08:26.assembling cars in Myanmar this year The company will initially
:08:27. > :08:35.assemble its sunny sedan at an existing facility of partner
:08:36. > :08:38.Tan Chong Motor Group, It comes as the Southeast Asian
:08:39. > :08:46.country opens up its economy. Is that the opposite of a cloudy
:08:47. > :08:53.sedan? A cloudy station wagon! Asia's biggest commercial aerospace
:08:54. > :09:00.and defence airshow has opened It's a chance for the industry's
:09:01. > :09:09.major players to gather in one of the world's fastest
:09:10. > :09:12.growing regions. In fact
:09:13. > :09:18.in South East Asia Boeing expects to sell almost 4,000
:09:19. > :09:30.new planes, worth $550 billion It is usually the air show where we
:09:31. > :09:34.see the big order announcement. Me thinks, we are seeing big orders,
:09:35. > :09:39.but they are not as big as they have been in the past? Well, Aaron, it is
:09:40. > :09:45.the second day of air show and we have had slighty meatier deals
:09:46. > :09:49.announced today compared to yesterday so Airbus said Philippines
:09:50. > :09:57.Airlines is buying 12 of their latest A250 jets for $4 billion.
:09:58. > :10:02.That's meatier. The A350 is a more fuel efficient, quieter plane.
:10:03. > :10:08.Boeing said that a Chinese private airline called OK Airways is
:10:09. > :10:12.spending 1.3 billion to buy 12 their 737s as well. Compared to yesterday
:10:13. > :10:15.where we saw smaller orders, I think we're getting meatier ones come
:10:16. > :10:19.through today. Have fun. We will talk to you soon,
:10:20. > :10:21.no doubt, lots coming from you guys as the show progresses over the next
:10:22. > :10:32.few days. Cheers. We look different today. Those are
:10:33. > :10:36.the numbers. That's what happened in Asia overnight and of course k those
:10:37. > :10:46.are the figures from the US yesterday.
:10:47. > :10:53.A couple of things to keep an eye on. We get unemployment figures
:10:54. > :10:57.later in the UK. But that section in the US yesterday helped translate to
:10:58. > :11:01.a more positive start for markets despite the falls in Asia overnight
:11:02. > :11:06.and it is the volatility as far as the oil markets are concerned that
:11:07. > :11:10.is still causing problems. Oil gone down again. It is below $32
:11:11. > :11:20.a barrel. How low can it go?
:11:21. > :11:25.Why are we different today? We may have one less camera in the studio.
:11:26. > :11:28.Let's have a look at what's going on in the markets.
:11:29. > :11:30.Michelle Fleury can tell us what will making the headlines
:11:31. > :11:33.in the business world in the United States today.
:11:34. > :11:37.America's third biggest wireless network T-Mobile reports on
:11:38. > :11:42.Wednesday. It has gone from the poor relation
:11:43. > :11:48.in US mobile to arguably its strongest performer. Attracting
:11:49. > :11:52.customers away from its great rivals, Sprint and Verizon and it is
:11:53. > :11:55.looking for its subscriber base to have grown by four million for the
:11:56. > :11:59.last three months of 2015. Now comes the hard part of any turn
:12:00. > :12:04.around and that's higher expectations. Everyone will be
:12:05. > :12:10.looking carefully for what T-Mobile claims it can do in 2016. Also out
:12:11. > :12:14.on Wednesday, minutes from the last Fed meeting. Further fuel for the
:12:15. > :12:17.wildfire of speculation about monetary policy that burns across
:12:18. > :12:19.the markets these days. .
:12:20. > :12:21.Joining us is Jane Foley, Senior Currency Strategist at
:12:22. > :12:36.Shall we start with oil? I love this story. Yesterday, we had the meeting
:12:37. > :12:40.in Doha. We had Venezuela, Qatar, Saudi Arabia, non OPEC member,
:12:41. > :12:43.Russia, saying we will agree to freeze levels at January's level, as
:12:44. > :12:47.long as everybody agrees? That's the point, as long as everybody agrees
:12:48. > :12:51.and the other thing is this is only a freeze. Many people in the market
:12:52. > :12:57.had hoped perhaps for a cut and we get a freeze.
:12:58. > :13:00.Not necessarily a freeze, but January, we are having record
:13:01. > :13:05.levels? Record production for a lot of countries. So again, frozen at
:13:06. > :13:11.high levels. It isn't a concession, but we have got to remember Iran,
:13:12. > :13:16.perhaps OPEC's second largest producer. They have only come back
:13:17. > :13:19.on to the market and they need revenue after the years of
:13:20. > :13:24.concessions. Are they going to cut it back? After years of seeing OPEC
:13:25. > :13:27.work well as a cartel, they have managed to pull together and be
:13:28. > :13:32.co-ordinated in their action. This time, it is about self interest,
:13:33. > :13:38.self preservation and keeping the oil taps open for the countries like
:13:39. > :13:43.Iran that need it? Over time a lot of producers have come online. If we
:13:44. > :13:47.go back 20 years ago, OPEC didn't have the competition from Canada,
:13:48. > :13:51.and the US, etcetera, every time the oil price went higher, it became
:13:52. > :13:56.profitable for other countries to invest and bring all the supply
:13:57. > :14:00.online and now, we have a situation, OPEC is playing a game. It wants to
:14:01. > :14:04.squeeze out marginal producers by keeping and pumping and keeping the
:14:05. > :14:10.price low to cause bankruptcy in some of the other corporates or to
:14:11. > :14:15.stop the investment for more oil feeds and it is the game it is
:14:16. > :14:20.playing. And it is a dangerous game. We're going to wrap it up. You're
:14:21. > :14:21.coming back to talk us through the papers.
:14:22. > :14:23.Still to come: Cutting the cost of HIV.
:14:24. > :14:26.The boss of specialist drugs firm Veev Healthcare will be here.
:14:27. > :14:28.He'll give us the inside track on developing treatment and funding
:14:29. > :14:37.You're with Business Live from BBC News.
:14:38. > :14:41.Clothes manufacturing was once a thriving part of the UK economy
:14:42. > :14:44.but competition from abroad means it has been in steady decline
:14:45. > :14:50.Let's head to a factory in Blackburn where staff are hoping
:14:51. > :15:05.She gets the glamorous once! Last week it was pigs, today it is
:15:06. > :15:09.clothing. I have upgraded!
:15:10. > :15:17.Good morning. This business started off making leather where the men
:15:18. > :15:22.delivering coal, then they moved into military uniforms. But this
:15:23. > :15:24.time last year, the company got into trouble because a lot of those
:15:25. > :15:30.contracts for making military clothes went overseas, and we have
:15:31. > :15:34.seen that across the textile sector. The number of people employed in
:15:35. > :15:41.this industry in the UK has gone from 800,000 in the 1970s to around
:15:42. > :15:46.85,000 people in the last few years, so it has been a big fall. And if
:15:47. > :15:50.you look at the wages in this area, there is a big difference between
:15:51. > :15:57.the wages people would get, chemical workers for example will earned more
:15:58. > :16:02.than people working in this industry, even though they are all
:16:03. > :16:07.in manufacturing. We are seeing some jobs coming back to the UK, and one
:16:08. > :16:11.analyst is predict that around 20,000 jobs will come back from
:16:12. > :16:14.China to the British textile industry, and this is good news for
:16:15. > :16:19.a factory like this one. What they are doing here is something called
:16:20. > :16:26.community clothing, led by the fashion designer, because a lot of
:16:27. > :16:30.this business is seasonality. In this time, they will make products
:16:31. > :16:34.sell direct to consumers, so they will make a couple of garments which
:16:35. > :16:39.they sell at a lower price than they normally would in the hope of
:16:40. > :16:46.keeping these types of places open. Steph McGovern in Blackburn for us.
:16:47. > :16:51.We were trying to work out what it actually is that they are making. We
:16:52. > :17:02.should pay more attention. Let me take you to the tablet. There are
:17:03. > :17:04.now more estate agents in London than independent butchers,
:17:05. > :17:07.greengrocers and fishmongers, so the decline of our high street not great
:17:08. > :17:12.for those traditional businesses. But if you are an estate agent, good
:17:13. > :17:15.news, you can't move for them on the high Street.
:17:16. > :17:19.Our top story - Beijing tries to re-ignite the world's second
:17:20. > :17:25.largest economy, where growth continues to slow.
:17:26. > :17:29.It is having trouble doing it, and that has had huge repercussions
:17:30. > :17:31.right around the world, more coverage of that online.
:17:32. > :17:34.Drug companies have come under flack for the way they sell
:17:35. > :17:39.Under particular scrutiny is how accessible their drugs are in poorer
:17:40. > :17:41.countries and what they charge for them.
:17:42. > :17:45.So when a new start-up offers drugs at not-for-profit prices,
:17:46. > :17:48.you might question where it makes its money.
:17:49. > :17:54.And ViiV health care says its doing just that.
:17:55. > :17:57.ViiV is a specialist drugs company, part-owned by GSK, Pfizer
:17:58. > :18:00.and Shion-ogi, and focuses solely on developing treatments for HIV.
:18:01. > :18:02.The company has 12 HIV treatments, generating annual sales
:18:03. > :18:08.The company says it grew by 54% in 2015, which is faster
:18:09. > :18:16.Dominique Limet is chief executive of ViiV health care
:18:17. > :18:32.Can we start, that growth number is staggering. How have you managed to
:18:33. > :18:39.achieve that, 54% growth? When you deliver a product which really is
:18:40. > :18:44.well differentiated and adding value to patients and Society, which is
:18:45. > :18:47.fairly priced, you get such a result, and I think we have
:18:48. > :18:53.demonstrated that our innovation strategy that we put in place in
:18:54. > :18:57.2009 is delivering great results. And let me get this in and get this
:18:58. > :19:03.out of the way, because I'm sure people are thinking about it. If
:19:04. > :19:08.you're HIV treatments are a not-for-profit, going to countries
:19:09. > :19:11.that account for 75% of people living with HIV, if you're doing
:19:12. > :19:16.that not-for-profit, how are you making money? We have a strategy
:19:17. > :19:23.which is very clear. We make money in the Western countries and we give
:19:24. > :19:30.away our products in the countries that are poorest, the sub Sahara
:19:31. > :19:37.countries, where we have agreed with companies to give them access to our
:19:38. > :19:42.IP rights. So in a way, what we are doing is we are selling in the most
:19:43. > :19:47.developed countries while we are also giving away free of charge the
:19:48. > :19:52.products for most of these countries. And that is the first
:19:53. > :19:59.decision that we took in 2009, which was to give this right to those
:20:00. > :20:04.companies, the generic rights for our products. We often hear from the
:20:05. > :20:07.big health-care firms that they need to charge high prices to fund future
:20:08. > :20:13.research and development of new drugs. You are saying that is not
:20:14. > :20:15.the case, you don't necessarily need to charge those prices in the
:20:16. > :20:20.developing market because you can make money elsewhere? That is
:20:21. > :20:26.exactly right. I think it is clear that we needed to make sure that we
:20:27. > :20:30.had a fair pricing strategy to ensure that our products are
:20:31. > :20:33.affordable in all territories. We can't talk about HIV drugs of the
:20:34. > :20:39.cost without talking about Martin Scott rally. Many people will know
:20:40. > :20:44.he was described as the most hated man in America because he took over
:20:45. > :20:52.the drugs firm and put the price up by 5000%, and The U's that excuse,
:20:53. > :21:04.that it was to fund the drugs to pay for new drugs. I think it is a sad
:21:05. > :21:09.story. It doesn't help the reputation of the pharmaceutical
:21:10. > :21:14.industry. We have continually tried to respect the contract between
:21:15. > :21:18.society and us. That is why we are currently pricing and product at a
:21:19. > :21:23.fair price reflecting the value, the differentiation, of our product, and
:21:24. > :21:27.that is why at ViiV health care we have been able to be so successful,
:21:28. > :21:33.because we have fairly priced our products and we are considered as a
:21:34. > :21:40.fair partner for society. Do you feel comfortable that your drugs are
:21:41. > :21:46.being ethically delivered to those in the nations where we see a lot of
:21:47. > :21:50.HIV? Do you sleep at night that the drugs are getting to the right
:21:51. > :21:55.people? It is a continuous preoccupation. We want to make sure
:21:56. > :21:59.there is no patient left behind, but it is a tough job, because we have
:22:00. > :22:04.to get the registration right in those countries, then we have to get
:22:05. > :22:12.access and supply, and it is a very challenging environment. But we do
:22:13. > :22:16.at Won everything we can do to improve access through voluntary
:22:17. > :22:20.licensing agreements, to work with positive action initiatives that we
:22:21. > :22:25.have to improve the infrastructure, to work on stigma discrimination, to
:22:26. > :22:30.work with the governments to improve accessibility and affordability, but
:22:31. > :22:38.it is a very challenging and demanding task. I can only imagine.
:22:39. > :22:41.Dominique, we're going to leave it there, but thank you. Dr Dominique
:22:42. > :22:44.Limet from ViiV health care. In a moment we'll take a look
:22:45. > :22:47.through the Business Pages but first here's a quick reminder of how
:22:48. > :22:55.to get in touch with us. The Business Live pages where you
:22:56. > :22:58.can stay ahead with all the latest business news. We will keep you
:22:59. > :23:06.up-to-date with insider analysis from around the world. Get involved
:23:07. > :23:10.on the BBC Business Live web page, on Twitter and you can find us on
:23:11. > :23:19.Facebook. Let's see what other
:23:20. > :23:29.stories are being talked -- Let's take a quick look
:23:30. > :23:32.at the stories making business The Verge says a US judge has
:23:33. > :23:36.ordered Apple to help the FBI to unlock the San Bernardino
:23:37. > :23:38.gunman's phone. The Times reports on the dip
:23:39. > :23:41.in oil price as traders According to the Business Insider,
:23:42. > :23:45.some analysts are now expecting an imminent collapse of China's
:23:46. > :23:55.banking system and currency. And the Telegraph says there are now
:23:56. > :23:59.more estate agents in London than independent butchers,
:24:00. > :24:01.greengrocers and fishmongers. Jane Foley from Rabobank
:24:02. > :24:03.is back with us to talk us through what the business
:24:04. > :24:14.pages are looking at. Lets start with China. If we look at
:24:15. > :24:18.the possibility of the next crisis, if China's debt could be it? This is
:24:19. > :24:23.what a lot of people are worried about. If you look at the amount of
:24:24. > :24:26.debt China has, it is huge, particularly for an emergency
:24:27. > :24:33.economy, and the pace of growth of debt has been shocking. So there is
:24:34. > :24:37.the fear that this debt could collapse, and one thing that is
:24:38. > :24:43.really very worrying is where the debt is being, if you have taken on
:24:44. > :24:47.debt, you are hopefully investing in product of capacity, what they have
:24:48. > :24:51.is too much infrastructure in housing and factories, so there is a
:24:52. > :24:55.concern, but a lot of other people say they will manage to muddle
:24:56. > :24:59.through, they will get through this. It depends which side of the coin
:25:00. > :25:05.you are looking at. And this story, a judge says that
:25:06. > :25:11.Apple must help the FBI break into an iPhone belonging to the man who
:25:12. > :25:14.killed 14 people in the US. Apple says it can't actually do this, it
:25:15. > :25:18.doesn't have the technology, but at the same time, it strikes me that
:25:19. > :25:28.they should be able to do this and want to. With this operating system,
:25:29. > :25:33.it cannot be broken into, 90% of it, they say. What about the other 10%?
:25:34. > :25:38.Does the person have a right to privacy, after such a horrendous
:25:39. > :25:42.crime, do you give that up? But also on the getting into the software
:25:43. > :25:45.that Apple will use, some of the critics are saying that even though
:25:46. > :25:49.the judge has said they need to do this, it could take up to five years
:25:50. > :25:51.to find the right pass code. Jane, thank you!
:25:52. > :25:55.There will be more business news throughout the day on the BBC Live
:25:56. > :25:57.web page and on World Business Report.
:25:58. > :26:12.Hello. We have a band of rain, sleet and snow heading across the UK to
:26:13. > :26:16.do, but I did, it will turn brighter with a scattering of showers. It is
:26:17. > :26:17.quite an active