15/04/2016 BBC Business Live


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This is Business Live from BBC News with Alice Baxter


China's mighty engine is losing steam - the Asian giant


reports the weakest growth since the financial crisis in 2009.


Live from London, that's our top story on Friday 15th April.


China's economy expanded at an annual rate of 6.7%


in the first three months of this year - better than many


developed economies - but too weak for this Asian might.


the fallout from BP's dramatic shareholder revolt as a $20 million


pay package for the boss Bob Dudley is rejected.


But will it change the way executive pay is agreed?


And we'll keep you up to speed with the markets.


Global stocks pretty mixed on Friday as investors await the outcome


And we'll be getting the inside track on a pact to share


information by the five largest economies in the EU in the wake


of the Panama Papers leak with our guest editor Andrew Walker.


And so on that note, we want to know, do you think Russia


and France will play ball and share their


Would you share your tax information?


We start in China with the slowdown in the world's number two economy.


The latest growth figures show the weakest growth


numbers since 2009 - since the financial crisis.


In the first three months of this year,


China's economy expanded at an annual rate of 6.7%.


That's down from the 6.8% we saw in the last three months of 2015.


This chart shows growth since the 1980s.


From 2000, you can see the boom which boosted


the whole world's economy - followed by a sharp slowdown.


China's facing an array of challenges.


From weak global demand for its products


But at home, it's become too reliant on huge,


inefficient state run firms, often called Zombie Companies.


Some six million jobs will need to be cut over the next few years.


This week the International Monetary Fund called China one


of the biggest threats to global financial stability.


In particular, Chinese firms that are struggling to pay their debts.


That could be a huge ticking time bomb.


The IMF says loans worth almost $1.3 trillion


I'm joined by Jinny Yan, Chief China Economist at ICBC


Standard Bank and also by our Asia Business Correspondent,


Thanks for coming in. Karishma, you have been looking at this over


there. And every time we get numbers out of Beijing, the big question is,


can we trust those numbers? That is what everyone always asks, as you


say, when these sorts of figures come out of Beijing. And certainly,


it is very much in line with what the market was expecting. Analysts


said that growth should come anywhere between 6.6 and 6.8%.


Even the Chinese Communist Party, the National People's Congress, when


they laid out their plans for the economy, they said that growth


should come in between 6.5% and almost as if these figures have been


plucked from the minds of Beijing officials themselves. But a lot of


questions being asked about how real these figures are and whether there


is a more protracted slowdown on the ground and how sustainable this sort


of growth is for the Chinese economy.


where you are. Jinny, can I ask you this, is China addicted to stimulus?


I think the world is addicted to China.


To China having high growth. I think the world very much needs China to


be strong at the moment. The reason for growth in the rest of the world


is not very clear at the moment. think a strong China is very good


for the rest of the world, particularly emerging economies. So


it is not very clear what is behind the growth for the rest of the


world? What is behind the growth in the numbers for China? What we see,


the real news is not really the headlines. 6.7%, everyone was


expecting that. That is not the story, the story is that other


official statistics, investment and production, those beat economic


forecasts. That is actually a very strong trend. What we need to be


concerned about is what lies beneath that. And of course we are going


back into the traditional model of growth, pumping credit from the


banks, and also infrastructure, government spending. This is how


China grows and this is how they know to grow their economy. But


China is very much trying to rebalance that towards consumption.


But that seems to be taking a bit of a back


seat for the moment. Jinny, is trying on


toll of 6.5%? -- is China on course. How big a problem is corporate debt


answer, 6.5% is achievable. I think the government will do a lot and the


government has a lot of physical power to be able to achieve that


growth. On the corporate debt story, that is a key


This is a problem that China is trying to solve. A lot of that


corporate debt, 160% of GDP, is sitting on banks' balance sheets.


them, and if the government needs to step in with a capital injection, it


may ultimately have to. And some of those state owned enterprises... Can


I just bringing Karishma back in? On the debt, we


talked about this could be a possible default. Can


China handle that kind of some? Well, what we have been witnessing


is a 30 year miracle of economic growth in China, and that proves


that China can pretty much handle whatever it says it wants to handle.


Don't forget, Beijing officials always points to the fact that China


has a massive that is one of the big buffers to


these problems. It also points to the fact that it is trying to reform


the economy, as Jinny points out, but this level of debt, pumping


money into the system and creating this economic growth figure that we


have seen, how sustainable is that going forward? Because it can only


produce growth for a period of time. And that is the big concern over the


next couple of years. But Karishma, with growth still the


China, very briefly, might we see that a rebalancing within the


economy taking a back-seat? Indeed. And I think we are seeing


sides of that. This is a difficult political issue


for the government. Don't forget, a lot of what the Chinese economic


on is that stability, the idea that people will not have massive job


losses. We have been hearing about the massive


steel and coal services... Industries. Thank you very much to


you both. In other news, the five largest


European economies have agreed to work together to try


to combat tax evasion - urging other countries


to follow their example. The UK has joined France,


Germany, Italy and Spain in agreeing to share information


about the secret owners of businesses and trusts who hide


behind so-called 'shell companies'. The deal, announced


at the International Monetary Fund meeting in Washington,


comes in the wake of the tax Microsoft is suing the US government


over the right to tell its users when federal agencies want access


to private data. It says keeping access requests


secret is against the US constitution, which states that


individuals should be made aware if the government searches


or seizes their property. BP shareholders have rejected


a pay package of almost $20 million for chief


executive Bob Dudley at the oil Just over 59% of investors rejected


Mr Dudley's 20% pay increase - which came despite record losses


and thousands of job cuts. It is one of the largest rejections


to date of a corporate The vote is non-binding on BP,


but the company's chairman has We are having a quick look at the


BizLive website. Car sales up across Europe, not a good story.


Volkswagen, if you read the tablet, is down. Down by 1.6%. Despite the


UK buying the highest number of VW cars


since the uproar over that scandal. And the other one you


wanted to highlight? Sales are up at the world's


retailer, Carrefour, after robust sales in Spain and Italy.


Let's take a look at what is happening around the world,


kicks off its spring meeting on Friday. Finance


leaders have been gathering in Washington, DC this week.


High on the agenda, concerns over the global economy as well as


possible risks of the UK exiting from the EU, known as a Brexit.


Meanwhile, we will also find out how American


consumers have been feeling lately when the latest figure for April


gets released. And it is expected that they have been feeling slightly


better thanks to steady hiring in the labour market. And of course the


earnings season continues, with another banking


giant, Citigroup, reporting its results for the first three months


of this year. So far its rivals, such as JP Morgan


and Bank of America, have all managed to surprise the market with


slightly better-than-expected results. But you have to remember


that investors have been expecting the


worst quarter since the financial crisis, so it is the case of under


promising and over performing. Well, let's move to Asian now


where stocks are fairly subdued on Friday as investors digest


China's slowing but relatively upbeat GDP numbers,


which were in line Meanwhile here in Europe,


after a buoyant few days lead by a surge in crude prices,


markets have opened pretty flat - holding their breath before a key


weekend meeting of oil producers - lead by Saudi Arabia


and Russia to discuss The FTSE 100, fairly flat at the


open. We are joined by Jane Sydenham,


Investment Director, A familiar face to us all. Let's


stay with the subject of oil and the


markets. Not so much today but oil has had a bit of a surge and the


markets have been that upward swing. It has had quite


an effect. The oil majors have had a good run this week, feeling that


perhaps finally the market is stabilising.


This meeting at the weekend is going to be quite interesting though I do


not think we are expecting that it will make a huge difference to the


supply of oil. But for the first time in months and months, we might


have a sense that maybe there is some discipline


coming back into the market. That is what we are looking for. Can


we switch gears? Nice little entry there, by the way. Every mistake


that goes on here, I pick it up! I was just going to mention, crude


prices, we saw this spike in equity earlier this week. Was that a case


of markets taking their lead from what we saw happen to the crude


price? Definitely. It was a downward force


over the last few months, the sense that maybe to some extent it is


good for consumers, if the prices for oil, but it is bad for stocks.


-- if the prices fall. There is less demand in China for


crude and commodities, so the sense of stabilisation is quite important.


Mariko was mentioning it, but boy, what a difference a


years can -- a year can make. 2016, pretty


dismal, although 2015 was cracking. What is behind the change? To some


extent, China. China is affecting growth around the world and the


manufacturing part of most economies is performing brulee, even though


services are doing well. That has affected all the major economies, we


have seen a lot of for European companies coming down.


A lot of those companies, to some extent,


are under promising. 2-wood will be interesting to see if the earnings


are as bad as expected. To some extent in the US, the strong dollar


has been a worry because companies will be affected by that to some


extent. If we see slightly better earnings, that would be good for the


markets. Still to come, spring


is in the air, the cherry blossom is in full bloom -


so why such glum faces at the IMF and World Bank


meetings in Washington? We'll tell you why -


global economic jitters, headwinds from China


and the damaging fallout You're with Business


Live from BBC News. He's a game changer on the pitch


and is now hoping to change Arsenal footballer turned


entrepreneur Mathieu Flamini has been pioneering research


into an alternative to oil With his business partner


he co-founded GF Biochemicals, which is the first company to mass


produce Levulinic Acid, which is said to be able to replace


oil in all its forms - it could potentially


be used as a bio fuel or to make pharmaceuticals,


plastics, cosmetics and even Tanya Beckett began


by asking how it works. It is acid which reacts


exactly like oil. That means you can substitute oil


in traditional products. And obviously you have


patented the technology We have appropriate technology


that we developed eight years ago. The company was created eight years


ago in Italy. We started the production in 2015


and today we are entering the market, increasing our


production to 10,000 tonnes. That is obviously a relatively small


amount compared to the whole market. How is it that you got started


in investing in this business? I moved to Milan eight years ago


to play for AC Milan. At the time we were already very


interested in climate change. So we created this opportunity


by meeting with a scientist and together we developed


this bio technology. What skills do you


bring to the table? For the operation we have a very


strong team on the field. I'm more focused on the


strategy of the company. Also what helps a lot is my business


partner who is on He is dealing with the day-to-day


operation. How have you managed to get sport


and business to mix? I want to make clear something,


my priority is football, But as you can imagine,


all players have other interests outside the pitch


and my interest is the bio economy. You're watching Business Live -


our top story - China's economy grew at an annual rate of 6.7%


in the first three months of this year -


better than many developed economies And now let's get the inside


track on a busy week Our economics correspondent


Andrew Walker joins us now. But let's start with a story making


headlines at the IMF and World Bank. They are going to share sensitive


information, these five countries? Yes, I think so, if they can


establish the owners of these so-called shell companies who are


used to hide their high earnings from the tax companies, they say


they will share that information with each other. It is five


countries. They want the rest of the G20 to take up the baton and do the


same thing. This is a battle with the tax authorities? Yes, where they


have the information about who benefits from a company whether they


are the formal legal owner of it, they will share that information


with each other. Was this on the agenda? Or is this because of the


Panama leaks? The IMF meetings, there is much going on in the


sidelines, this was not formal IMF business as such, but no question


there is a desire to be seen to be doing something rapidly in response


to the panama papers. We have spoken about the impact of rising prices on


crude oil, there is the key meeting of oil producers this weekend, and


key people not attending, as well. We have two very large oil producers


not there, the United States and China, although they are producers,


they also very large importers, so on balance they tend to do better


from a low oil price. They would not want to be seen to be propping the


price up, but there is no question we have got Opec, probably all of


Opec, which includes Saudi Arabia and Iran, but some suggestion the


Iranian minister will not be there in person, sending one of his


officials instead. Russia, Kazakhstan, Mexico. If they can


agree to do something, that is a substantial chunk of the world oil


market. Two points I want to make. We hear that may be they will freeze


production at January levels, those levels were already record high.


Iran is just back and it would like to build its output up to the


pre-sanctions time of something like four million and it needs the money.


They do, they feel very strongly that they are entitled to reclaim


the market share they lost as a result of sanctions. There have been


conflicting signals from Saudi Arabia about whether they would not


be prepared to do some sort of freeze without Iran taking part. The


deputy crown prince said that they would not, but I think Mosby both


think that is not the last word from them on it, and the signs are that


they will be prepared to make an exception for Iran -- but I think


most people think. It would be no more than a phrase, as you said, but


the prize is now 50% above the low it reached in January -- no more


than a freeze. It is about $43, something like that, for Brent,


compared to 27, in January, and the high reflects the expectation that


there might be at least a freeze agreed, but the longer-term context,


it was less than two years was $115, so a good deal less than


half the peak it reached. Andrew, thanks for joining us.


In a moment we have the business pages.


But first here's a quick reminder of how to get in touch with us.


We can keep you up-to-date with all the latest details with insight and


analysis from the BBC team of editors and analysts from around the


world. You can get involved with the BBC business web page. You can find


us on Twitter and Facebook. Business live, on TV and online, whenever you


need to know. What other business


stories has the media been Joining again us is Jane Sydenham,


Investment Director, We have found this story. In the


Financial Times. We could not avoid it. The fallout of this shareholder


revolt of BP shareholders, voting in huge numbers against Bob Dudley's


20% pay rise. It is a complex issue, it is true that he can't be blamed


for the level of the oil price and BP went into loss last year because


it was paying out in relation to the deepwater horizon disaster. On the


other hand, the absolute level of his pay and the multiple compared to


the average pay for a BP employee. The force of this vote against this


kind of pay package, does this mark a turning point? I think it does,


actually. 60% vote against is quite something and in the past we simply


have not seen that kind of level of protest and I think shareholders are


becoming more activist and they are thinking about shareholder


responsibility, it is a good thing. We only have 30 seconds. Microsoft


suing the Justice Department? Another Civil Liberties action on


behalf of tech companies, Apple are doing the same, Microsoft are


concerned that the bar for what is a reasonable request for privacy is


just too low. Consumers should know if their phone is being looked at by


the government? Absolutely. There is a big increase, the US Justice


Department looking at this. Yes. Jane, thanks for joining us.


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