07/03/2016 BBC Business Live


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07/03/2016

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This is business live with Victoria Fritz and Sally undock. Plans to

:00:09.:00:20.

overhaul its state-owned industries. Live from London, that is our top

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story today on Monday the 7th of March.

:00:24.:00:40.

China's chief economic planner is promising the country will not have

:00:41.:00:46.

a hard landing at its leaders unveiled their plans for the next

:00:47.:00:49.

five years, but analysts are warning the detail is scanned. Also in the

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programme, oil heading back towards $40 a barrel and big questions about

:00:57.:01:01.

energy asked in the UK, specifically about EDS nuclear plans at Hinkley

:01:02.:01:04.

Point. We will have the latest for you. And a downbeat start to the

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trading week in Europe. Pretty mixed at the moment. We will talk you

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through the winners and losers. Talk about the sharing economy -

:01:13.:01:17.

and you might imagine But the idea is quickly evolving -

:01:18.:01:19.

we'll be hearing from one start-up In the last half an hour,

:01:20.:01:23.

it has been confirmed that the Finance director EDF has

:01:24.:01:27.

resigned over the company's plan to build nuclear

:01:28.:01:29.

reactors in Britain. Where do you stand

:01:30.:01:31.

on nuclear energy? Is it the solution to our energy

:01:32.:01:35.

security and needs, or a waste Let us know of the stories

:01:36.:01:39.

that we're covering - Once again we start with China. And

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its admission it faces a difficult battle ahead.

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Those the words of Premier Li Keqiang at the nation's annual

:02:10.:02:12.

parliamentary meeting which began on Saturday,

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as he lowered China's growth target for the year.

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Beijing faces tough questions over its stewardship of the world's

:02:16.:02:18.

second largest economy and its financial markets.

:02:19.:02:27.

The new growth target for 2016 is between 6.5-7%.

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The International Monetary Fund expects just 6.3%

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But the country's chief economic planner said China

:02:35.:02:42.

China's 5-year plan included targets on energy consumption,

:02:43.:02:46.

job creation and inflation, but analysts say details are scant.

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And there was a promise to overhaul the bloated and inefficient state

:02:55.:02:59.

sector over the next 20 years, by bringing in the private sector

:03:00.:03:03.

to help run state-owned firms that dominate industries across banking,

:03:04.:03:08.

John Zhu is HSBC's China economist, he's in Hong Kong.

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Is China making more problems for its further down the line to meet

:03:25.:03:33.

these growth forecasts? Growth is important and I think the government

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is right to prioritise growth. Structurally China is never going to

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grow at the double digits on average that you have seen in the past 30

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years. On the other hand, it has to keep growth reasonably stable and

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keep growth holding up, because if it doesn't, it is going to cause all

:03:50.:03:55.

sorts of issues, such as deviation, bad debt and potentially down the

:03:56.:03:59.

line, disruption to the labour market. How much does deflation pose

:04:00.:04:06.

a risk to the Chinese economy? I think it is already a risk. In some

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nations China is already is in deflation. Producers profits are

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beginning to fall. In some ways policy should be looser, and that

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means cutting interest rates and also for the government to step up

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and take up some of the slack by increasing government spending and

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investment, otherwise what you have is potentially a downward spiral

:04:34.:04:38.

with lower and lower prices, lower profit and further increases in the

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debt burden. That is the situation surely you would want to avoid.

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Moody 's has been concerned about this and warning over what is going

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on with debt. I think debt to gross domestic product is something like

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245% in China. How much do debt levels like that concern you? It

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does look big, but for me debt is one side of the balance sheet. It

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should be balanced on the other side by the assets, which is what China

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is investing in. I think on the whole, over time, China is still

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investing in the right things and will make a decent return to match

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the debt. What is the problem is the financial system isn't really

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allocating people's savings, and China still saves more than it in

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vests, into an efficient way, such that it makes the investment is

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sustainable in the short run. I think the debt is a worry, but the

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key solution is to raise the ratio you mentioned, to bring GDP growth

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back up. We will leave it there but thank you for your time. Lots more

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on that story online, do take a look. Here is some more news to take

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in: The French energy giant,

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EDF has confirmed it's It's reported the resignation

:06:02.:06:03.

happened following a dispute over its plans to build

:06:04.:06:06.

two nuclear reactors It's thought Thomas Piquemal

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was concerned the ?18 billion project could put the company's

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future in jeopardy. EDF is 85% owned by

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the French government. Eurozone Finance ministers hold

:06:17.:06:26.

talks on economic reforms for Greece But there's mounting concern that

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Greece's third bailout, worth 86 billion euro,

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is headed for crisis. The EU and the International

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Monetary Fund are at loggerheads over the reform measures Athens must

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adopt for all parties to sign off The credit ratings agency Moody's

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has put Saudi Arabia, the United Arab Emirates,

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Kuwait and Qatar on review It also cut Bahrain's sovereign

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rating to junk late last week - ALTHOUGH THE PRICE OF OIL IS HEADED

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HIGHER. YES, IT IS AT THE MOMENT. A QUICK

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LOOK AT THE TABLET. I THINK WE WILL BE TALKING ABOUT THAT IN A MOMENT,

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$40 A BARREL. A little more news on EDF, shares down 8% in early trade

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following the resignation of the chief financial officer. Hinkley

:07:27.:07:37.

Point, we are expecting some announcement perhaps in the next few

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weeks and months. Let's now concentrate on another

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story coming out of Asia. We have been hearing about economic

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uncertainty in China and that's just one of the problems facing property

:07:48.:07:50.

investors in Hong Kong. Home sales there fell by a whopping

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70% in February from a year earlier Nice to see you. Why such an

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enormous drop last month? There are a lot of people looking at

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the figures on asking that same question. Sales in January and

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February said to be the lowest on record. And the lowest since 2008-

:08:21.:08:26.

09 financial crisis. It is tempting to link this to the slowdown in

:08:27.:08:34.

China but analysts say the reason is that is one factor, but they also

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point out that people wanting to buy property in Hong Kong now face a lot

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of restrictions. Very high stamp duty, they have to come up with

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substantial down payment and they are worried interest rates might

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increase. The government is also boosting housing supply in Hong Kong

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which is pushing down prices. But the property markets are being very

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closely watched everywhere as china's economy continues to slow.

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The economic uncertainty is putting some people off buying. Thank you

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very much. Markets across Asia had a lot to

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react to today. Job numbers coming through stronger and better than

:09:18.:09:21.

expected in the United States, and also reacting to all the news coming

:09:22.:09:26.

out of China and about poor economic news from Hong Kong. A mixed day in

:09:27.:09:31.

Asia. Let's have a look at how Europe is faring. Because whilst

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that is going on we have markets looking ahead to the European

:09:35.:09:39.

Central Bank meeting this week. What will they decide? And the oil price

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heading higher. Commodities headed higher as well. A flat beginning to

:09:48.:09:51.

the week for Europe. A lot on people's minds. We will discuss in

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more detail in just the moment but first a look ahead to the day ahead

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on Wall Street with Michelle. One of America's leading sellers of

:10:03.:10:06.

vinyl records also sells cassette tape. At this point you might be

:10:07.:10:11.

wondering what I'm going on about. The company has enjoyed strong sales

:10:12.:10:15.

over the last few quarters and investors are wondering whether or

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not it will be able to maintain that momentum when it reports

:10:18.:10:21.

fourth-quarter profits late on Monday. That brings me back to those

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cassette tapes, all parts of the retailer 's efforts to appeal to all

:10:27.:10:31.

generations. The head of the Federal reserve's next policy meeting, watch

:10:32.:10:34.

out for speeches on this mandate from the vice-chair and Governor.

:10:35.:10:39.

Wall Street will be listening closely for clues. Do they think the

:10:40.:10:43.

US economy is strong enough for it to continue on its path of rate

:10:44.:10:46.

hikes? Joining us is Manji Cheto,

:10:47.:10:49.

Africa analyst at Teneo Good morning. We are talking about

:10:50.:10:59.

oil prices, one of the things moving some of the market, or it has been

:11:00.:11:04.

at the start of this year. We have Brent crude flirting at $40 a barrel

:11:05.:11:10.

mark. From where you stand as an Africa analyst, it has such crucial

:11:11.:11:15.

impact with the African economy. As with anyone who is exporting with

:11:16.:11:21.

what is going on with the oil price? Yes, for a lot of oil producers this

:11:22.:11:24.

is good news. Unfortunately, I'm not sure how long we are going to look

:11:25.:11:30.

at that 40 or if it will hit the $40 a barrel mark. If you look at the

:11:31.:11:35.

predictions from analyst at the beginning of the year, they were

:11:36.:11:39.

predicting about $60 per barrel. At that point I am not sure we will get

:11:40.:11:43.

there. 40 might be the best we get this year. But a lot of oil

:11:44.:11:47.

producers will be hoping... It is hard to see what will push up those

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pressures. Even if we have a lot of people in political instability, I

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cannot see what kicks it up. Commodities for now headed higher,

:12:00.:12:04.

which is giving everyone a breather. But let's think of the other events

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this week, the ECB meeting, quite big in people's thinking. And China

:12:09.:12:15.

digestible venues and the US jobs data which came out on Friday, still

:12:16.:12:18.

thinking about that, with the whole global economy and our thinking,

:12:19.:12:23.

give us your thoughts? One of the interesting things this year,

:12:24.:12:28.

economic sin bin bad, but political risk has been the biggest headline

:12:29.:12:32.

risk for many people. That is much harder to predict. I think a lot of

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the volatility we are seeing is largely driven by political

:12:37.:12:40.

instability and policy uncertainty. Be more specific about political

:12:41.:12:46.

instability. I should clarify that more and say political uncertainty,

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it is... The ECB, it is hard to look at decisions based on numbers, it is

:12:56.:12:59.

based on the political will and what the political will is across the

:13:00.:13:05.

euro zone. Policy uncertainty coming out of oh pack, nobody trusts they

:13:06.:13:11.

have got control over the oil prices any more. For me it is political

:13:12.:13:16.

uncertainty that is driving the volatility in the markets more than

:13:17.:13:20.

the fundamentals. Focusing specifically on the ECB. There has

:13:21.:13:24.

been a lot of uncertainty about what measures would be announced. The

:13:25.:13:28.

markets disappointed last time, they are expecting we will get some more

:13:29.:13:33.

easing this week. But is it actually working? Every time it comes to the

:13:34.:13:38.

markets people seem to be disappointed with Mario Draghi. I

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think that will happen again. It doesn't matter what he does. It is

:13:43.:13:47.

not going to be enough. From that perspective, I think people are

:13:48.:13:52.

already expecting that. If we do get some kind of this post US, it is not

:13:53.:13:56.

going to be enough to calm the markets. I think you could get some

:13:57.:14:01.

calm in a day or two, after that we will have the same level of

:14:02.:14:05.

volatility. Paul Mario Draghi, a thankless job he has at the moment.

:14:06.:14:10.

Wouldn't want to be in his shoes factory we will see you soon, and

:14:11.:14:13.

about five minutes time. Still to come: can you outsource your sales

:14:14.:14:21.

staff? First more on the decision of the

:14:22.:14:35.

finance chief at the EDF. It confirmed the director has quit over

:14:36.:14:41.

the phone's plan to build the first nuclear power plant in the UK in

:14:42.:14:42.

decades. Thomas Piquemal stepped down

:14:43.:14:44.

because he feared the project could Joe Lynam has been

:14:45.:14:46.

following the story. much do you think the governments

:14:47.:15:03.

are to blame for EDF being in the predicament it finds itself today?

:15:04.:15:06.

President Hollande of France and David Cameron, the Prime Minister,

:15:07.:15:11.

met in France and reiterated that the Hinkley Point project was going

:15:12.:15:18.

to be a pillar for future by lateral agreements between the two

:15:19.:15:20.

countries. This is a major investment. ?18 billion in Hinkley

:15:21.:15:29.

Point in Somerset to build a new generation of power plants. The

:15:30.:15:34.

costs supersede the value of EDF's market capitalisation. So for EDF,

:15:35.:15:43.

it is looking like a serious project. The resignation suggests

:15:44.:15:52.

that if you cannot afford to build this project, are you going to

:15:53.:15:56.

proceed and risk the company? Maybe he couldn't put his name to the

:15:57.:16:00.

proceeding with this investment, if it was going to be a risk. They are

:16:01.:16:06.

borrowing to pay dividends at EDF, the share price collapsed around 60%

:16:07.:16:10.

in the last year or so and there is a question mark whether the funding

:16:11.:16:13.

to build the project, a third of which will come from a Chinese

:16:14.:16:16.

company, whether that is going to be forthcoming. It looks as if the

:16:17.:16:20.

political masters decided this is going to go ahead, irrespective of

:16:21.:16:25.

what the maths says. Joe, we're going to leave it there, thank you

:16:26.:16:30.

very much. I'm sure that will be big news throughout the day. Shares down

:16:31.:16:35.

8% at the moment over at EDF. Metro Bank, you are able to trade

:16:36.:16:40.

the shares today, or at least institutions can boy and sell shares

:16:41.:16:49.

today in Met fro Bank. Shares are up over 8.5% so the CEO was one of our

:16:50.:16:54.

guest on Inside Track on Business Live.

:16:55.:17:02.

Hello. You're with Business Live. China's chief economic planner is

:17:03.:17:10.

promising the country won't is a a hard landing. The leaders unveiled

:17:11.:17:14.

their plans for the next five years, but analysts are warning the detail

:17:15.:17:17.

is scant. Lots of detail online. Take a look and dig in deep, but

:17:18.:17:22.

let's get the Inside Track on one of the newest start-ups venturing into

:17:23.:17:24.

the so-called sharing economy. Closing a deal is the cornerstone

:17:25.:17:29.

of any successful business, but is this something

:17:30.:17:31.

that can be outsourced? Clozer was founded last year

:17:32.:17:33.

by Amy Bloomer and describes itself The platform connects businesses

:17:34.:17:36.

with on-demand salespeople, reducing Given that "Clozers" are employed

:17:37.:17:42.

on a short-term basis, companies can use the service

:17:43.:18:02.

to meet peak-time demand. CLOZER can also be used to help

:18:03.:18:04.

businesses expand internationally as the platform gives access

:18:05.:18:07.

to sales teams all around the world. Ami Bloomer, chief executive

:18:08.:18:09.

of Clozer joins us now. Thank you very much for coming in.

:18:10.:18:14.

This is clearly a fantastic idea so long as your salespeople are good at

:18:15.:18:18.

actually selling things. I believe you've got 83,000 of them. How can

:18:19.:18:23.

you check they are all possibly good at doing their jobs? I think most

:18:24.:18:28.

importantly 8% of sales close 80% of deals. There is a sub set of people

:18:29.:18:32.

that are just extremely good salespeople. What we do is verify

:18:33.:18:36.

these people have actually closed deals and produce that information

:18:37.:18:43.

back to the clunt. The most verified and reviewed the closure is, the

:18:44.:18:47.

more money they make on the platform. Can you choose if you were

:18:48.:18:51.

a business look to go sign up to this? Can you choose the Clozer you

:18:52.:18:58.

get? Of course. Each Clozer is rankted and reviewed. So it is

:18:59.:19:01.

matched by your industry. You're not going to send somebody to a biotech

:19:02.:19:04.

sales meeting who is selling finance products. It is not going to work.

:19:05.:19:09.

In a sense, you know, it is matched, but you have to interview them. They

:19:10.:19:13.

don't represent your business until you say, "OK, I feel really happy

:19:14.:19:18.

with Amy." Or whoever. Zl this idea came to you after a trip to cold

:19:19.:19:22.

beeia where you find it very difficult to sell anything? Yeah,

:19:23.:19:27.

the genesis is five years old, when I was 25, I started my first company

:19:28.:19:32.

on a credit card. My first client I signed over the phone and it was

:19:33.:19:37.

Pfizer, when I signed them, I thought Pfizer are doing business

:19:38.:19:41.

from me, but because I was selling a learning product, I was 25, all the

:19:42.:19:45.

enterprise clients I went to, the door was closed. My first hire was a

:19:46.:19:51.

grey haired man and he sold every daesmt when I found myself in couple

:19:52.:19:57.

beeia, it was extremely difficult to be there as a woman who is white,

:19:58.:20:02.

President Hollande, doesn't speak Spanish, trying to do business with

:20:03.:20:08.

Columbian men, I spent days trying it get my deals to close, but the

:20:09.:20:12.

cultural differences were the thing that held me back and the fact that

:20:13.:20:16.

people buy from people and I think when we forget that in business, we

:20:17.:20:21.

do ourselves a disservice. And all the stuff around women in business

:20:22.:20:26.

and everything, it is you know, I'm really supporting women in business,

:20:27.:20:29.

but there are some things we know from the platform that HR directors

:20:30.:20:34.

buy typically from men over 40. So if you know that, send a man over

:20:35.:20:37.

40. But your company is very much a

:20:38.:20:44.

product of our age, isn't? You're calling it a disruptive player in

:20:45.:20:49.

this market, but presumably, all the Clozer s that you've got on your

:20:50.:20:53.

website are self-employed, individuals. So virtually freelance

:20:54.:20:58.

in a sense? Freelancers, yes. How long do you think you're going to

:20:59.:21:02.

stick around with that model? Do they want to stay in that place as

:21:03.:21:05.

an individual or perhaps they will want to go and sort of start a

:21:06.:21:10.

career path, corporately where they're going to get the fringes and

:21:11.:21:15.

benefits that you get when you're not self-employed? The advantage to

:21:16.:21:22.

being a Clozer rather than being in an institution, the market sets your

:21:23.:21:26.

rate. If you're closing a lot of table, you're the table earning $150

:21:27.:21:33.

an hour, now, now your employer can't give you. The flexibility

:21:34.:21:40.

really attracts Clozer s because I could go to Thailand and work on

:21:41.:21:44.

deals there if I had a certain experience. People want a flexy, job

:21:45.:21:52.

that they can do and get paid for it at market rate.

:21:53.:21:57.

So much more to discuss. As always, Amy, thank you so much. Really

:21:58.:22:00.

interesting and this business is just only about five months old so

:22:01.:22:04.

we will keep an eye on it and I'm sure we will have you back.

:22:05.:22:18.

The man who is said to have invented e-mails,

:22:19.:22:22.

He came up with the idea of sending electronic messages in 1971,

:22:23.:22:27.

and he's been credited for introducing the @ symbol as part

:22:28.:22:29.

Our North America Technology Reporter, Dave Lee explains

:22:30.:22:32.

Ray Tomlinson's role in developing the revolutionary technology.

:22:33.:22:34.

Ray Tomlinson was working on a piece of software called ARPANET,

:22:35.:22:37.

which was one of the early foundations of the Internet.

:22:38.:22:40.

What he was working on was the ability to send messages

:22:41.:22:43.

He did this, in the first instance, from a computer that was ten-feet

:22:44.:22:57.

So the first e-mail was fairly anti-climactic in a way.

:22:58.:23:01.

He says he has forgotten what was exactly in that e-mail.

:23:02.:23:04.

He couldn't even tell us that, unfortunately, but certainly

:23:05.:23:06.

a momentous thing in the history of the Internet and the history

:23:07.:23:09.

of how we communicate with each other.

:23:10.:23:10.

There are now 100 billion e-mails sent every day,

:23:11.:23:13.

so it all started from that one e-mail to a computer ten feet away

:23:14.:23:16.

The lovely Dave Lee who you can follow online. He is wuven our

:23:17.:23:26.

technology team in San Fran. We asked you whether you thought

:23:27.:23:31.

nuclear energy was worth the time, the energy and the money? Some of

:23:32.:23:36.

you got in touch, we have got a viewer saying, "Well, Canada has

:23:37.:23:40.

almost 40% of its energy on nuclear? Why not? It is positive." Another

:23:41.:23:48.

viewer says, "Nuclear is the way backward. Renewable energy is more

:23:49.:23:52.

sustainable, beneficial and minimises impact. He says the gains

:23:53.:23:56.

are worth the costs. Thank you for sending in your thoughts. Stay in

:23:57.:23:57.

touch with us. Manji Cheto, Africa analyst

:23:58.:24:05.

at Teneo Intelligence is joining us The billionaire businessman who has

:24:06.:24:26.

been sentenced to death. This is coming off the back of people

:24:27.:24:30.

expecting Iran to come back into the markets. It is a reflection of the

:24:31.:24:35.

fact that the Iranians want to say they're dealing with the operational

:24:36.:24:40.

issues and corruption tends to be a big issue in oil producing States.

:24:41.:24:48.

Clearly, he is not Iranian. He is a western businessman, just fill us

:24:49.:24:53.

in. I haven't seen the detail on this? He is British Iranian. So I

:24:54.:24:59.

think, this is clearly, the Iranians trying to send a message, if your

:25:00.:25:02.

people want to come into our country, if they want to operate we

:25:03.:25:08.

expect them to still honour an Islamic Republic and whether or not

:25:09.:25:10.

people will feel can have didn't about this and this is really

:25:11.:25:14.

tackling corruption, you know, I think a lot of people will kind of

:25:15.:25:19.

sit on the fence on that one. We have got one more that we are going

:25:20.:25:24.

to try and do quickly this. Is in the Wall Street Journal. They have

:25:25.:25:29.

this population, this demographic timebomb that we are seeing across

:25:30.:25:33.

the developed world? For me, it is interesting. I cover markets where

:25:34.:25:38.

it is the opposite. We actually have an incredibly large youth population

:25:39.:25:42.

in Africa. I think, you know, unfortunately the pensions issue in

:25:43.:25:46.

Europe, nobody ever says we need to tackle this right now and

:25:47.:25:50.

unfortunately, I just think, you know, politicians won't allow this

:25:51.:25:53.

to get to the point where we can't actually solve it anymore. Thank

:25:54.:25:57.

you. That's often the case. The tin can kicked down the road. You're

:25:58.:26:02.

with Business Live. We will see you tomorrow.

:26:03.:26:08.