26/09/2016 BBC Business Live


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One of the world's leading economists tell us - the BBC -


the biggest threat to the global economy.


Live from London, that's our top story on Monday, 26th September.


Speaking to the BBC, the former International Monetary Fund Chief


economist Ken Rogoff says that a hard landing for the Chinese


Also in the programme...blast off for India!


The world's fastest growing major economy puts eight satellites


This is what the markets have been doing. Last week was not that bad.


And we'll be getting the inside track on electronic


voting - it's being done in a handful of countries -


We'll be speaking to an industry leader later in the programme.


And today, we're also looking at the Easyjet story


about the world's youngest plane captain.


She's just 26, flying with the world's youngest


commercial airline pilot. He's 19 years old.


does the age of your pilot matter to you?


Get in touch using the hashtag #BBCBizLive.


Welcome to the programme.


The former chief economist of the International Monetary Fund


has said that a slowdown in China is the greatest threat


Ken Rogoff said that a calamitous "hard landing" for one of the main


been slowing down faster than official figures suggest.


So what is happening with China's economy?


China's borrowings hit $25.6 trillion at the end of 2015.


This figure includes government, corporate and household


China's debt is now nearly 250% greater than the value


of what it produces every year, or its GDP.


This is due to Beijing's repeated use of cheap credit


This has unleashed a huge, debt-fuelled spending binge.


Ken Rogoff has been speaking to our economics editor, Kamal Ahmed.


There is no question that China has been the engine of global growth.


The US is picking up, but China is picking up and -- slowing down much


more than official figures show. If you want to look at a part of the


world that has a debt problem, look at China. They have been a credit


fuelled growth. These things don't go on forever.


Everyone says China is different, the state owns everything and they


can control it - only to a point. I definitely worried about a hard


landing for China. We are having a sharp already, and I worry about


China becoming more of a problem. We have taken it for granted that


whatever Europe and Japan are doing, at least China is moving along.


There wasn't really a substitute for China. India may come a someday.


They are doing better, but it has fallen behind sofa in size that it


would not compensate. That is the area of the world I worry about


most. What would mitigate the risk of a Chinese hard landing? What


should China and the rest of the global economy do? That is a tough


question. Ideally, you would like to regenerate growth and be more on


your feet when this happens so that when China starts slowing down,


Europe is doing better. The US is already doing better, some emerging


markets are going better. You would like the rest of the world not to be


dependent on China so much. But the IMF has marked down its forecasts


for global growth nine years in a row. The rumour is that they are


about to do it again. In the early stage, it was the advanced


countries, but for some time now, it has been China. There are limits to


what you can do when a country that big is slowing down.


Richard Hunter is Head of Research at Wilson King


Does he have a point? We have had guests on the show and other


programmes where I have heard them go, Beijing says growth is


officially around 7%, but realistically, on the ground, it is


probably 4%. What is your take on that? That is possibly true. Some of


the UK blue chips doing business out there would save 4% would be more


realistic. That said, given the exponential growth China has been


having, that is a number that a lot of countries would wish for. What


about the banking system? Everyone compares this with what happened in


2008, but the banking system in China is not tied into the western


banking system. It is different. It has without question had a number of


stimuli. China is going through a transformation from rural to urban.


This will take the next decade and as time goes on, we will realise


more and more that the Chinese do not look at their economy as we do


in the US and UK on a quarterly basis. They have decade views mind.


Any short-term bonds, there will be less concerned about. They might be


less concerned about short-term bumps in the road, but how much of


an impact does China, as the world's second largest economy, if it hits


those bumps, do we elsewhere feel that? Of course. There are ripples


in other economies. Generally speaking, when we have such anaemic


growth elsewhere, it is the likes of China that we look to to keep the


growth going. Richard, you are going to come back and talk through the


papers, like these young pilots flying is around.


The former head of the International Monetary Fund, Rodrigo Rato,


is to go on trial on charges of corruption.


The allegations date from when Mr Rato was chairman


of the one of Spain's biggest banks, Bankia.


It's claimed Mr Rato, and 65 other executives,


spent $13.5m on personal expenses while working at Bankia.


Mr Rato had also previously served as Spain's economy minister.


A Singapore based firm has acquired a 49% stake in Rolling Stone,


the magazine widely known as the voice of music


Bandlab Technologies aims to expand Rolling Stone's business


The Singapore firm has a portfolio of companies, including retail


operations in the music industry which it hopes will contribute


to the continued growth of the magazine


The messaging app Snapchat has announced its first gadget -


For a hip young company, it's chosen a rather


The glasses can record up to 30 seconds of video at a time and go


As part of the announcement, Snapchat is renaming itself


Snap Inc, underlining the company's ambition to go beyond


wine list used to be an old-fashioned word as well but that


is not now. Let's look at the BBC page here. Monarch Airlines is one


of the UK-based airline 's. With a lot of rumours that it is going


under. We don't know where they started, but this engine talk about


the Monarch engineers, who works tipped off yesterday afternoon, so


they raced into work to pick up their tools. There are reports that


some monarch claims sitting on the ground are being guarded. Looking at


social media, a lot of tweets are coming from pilots saying that the


planes are taking off, and they are saying to stop the rumours. Talking


of flying, would you hop in a plane with a 19-year-old pilot? As young


as you! Jamie! I can fly a simulator.


Because India has India launched eight satellites into


In recent months, the country has been launching an increasing number


of foreign satellites, earning $120m in the process.


I guess they have to show that they are earning money, because there was


probably some controversy about a country where a large chunk of its


population are still trying to feed themselves daily. And they have this


space programme? That's right. It is a country that has often faced


criticism for funding a space programme when we have so many other


problems to deal with. Increasingly, though, India's space agency, when


they have a launch for an Indian satellite - even today, the purpose


of that launch was to put a weather forecasting satellite into space,


which was for national purposes. But they always have some extra space in


the vehicle, and they are trying to feel that extra space with


satellites from foreign companies which pay India's space agency to


carry them along. So far, including the five this morning, India has


launched 79 foreign satellites. They have already secured deals to launch


dozens more foreign satellites, and they are looking at it as a way to


make their own operations more cost-effective. If you look


globally, the need for space satellite launches has been


increasing. There are companies that don't just want to put one or five


satellites into space, but a constellation anywhere between 24


and a satellites, and they can't always afford a satellite launch of


their own. That is why they need to piggyback onto launches by countries


like India and other space-faring nations. And there are even private


companies like space X. Let's look at what the market is doing.


We have seen a lot of optimism after Wednesday's decision from the


Federal open markets committee not to raise interest rates. That seems


to have been put off till later in the year.


I think this will feed through into Europe as well. This was the end of


last week. There are a few nerves about the election coming up as


well. Samira Hussain


has the details about what's ahead On Monday, the first of three US


presidential debates between Democratic nominee Hillary Clinton


and the Republican nominee Donald Trump. The presidential candidates


will be tackling three major themes, one of which will be achieving


prosperity. The 67th annual International astronautical


conference will be meeting in Mexico. The conference runs until


Wednesday, but interestingly, the SpaceX CEO will be laying out his


plans to colonise Mars. Finally, the well's largest cruise ship operator


Carnival will be reporting earnings. Investors will be paying close


attention to any possible changes to Carnival's financial outlook for the


rest of the year. It would be a response to global economic events


that are really affecting consumer confidence. Let's talk oil.


Spencer Welch is director of oil markets at IHS.


The gathering at Doha failed to come to an agreement on whether to freeze


production or not. I think the Saudis were cheeky to say they would


only do it if Iran did it. But I think Iran is now playing catch-up


and needs to get its economy up and running. There is no hope in heck


that Iran is going to limit its production at the moment? I think


you're right. It is unlikely that there will be a deal at the current


meeting in Algiers. It is not a formal Opec meeting. It is a meeting


of the International energy for. It just happens that most oil producers


are there, so they will talk about the situation. But the way Saudi has


treated this was to gain market share. Have they succeeded? Yes. In


November 2014... Too so why can't they let the press go back up again?


They would like the oil price to go up, but it is taking than expected.


US production has been in decline. Saudi production has been


increasing, so they have been gaining market share, but the price


of recovery has not kicked off. If Saudi production was cut back, would


that not push prices up? They tried that in the '80s and it took ten


years. So if they cut production, they will lose market share. But


even if they freeze production, which is what they are talking


about, you would be freezing at record levels. They are turning this


stuff out like there is no tomorrow. Absolutely. People talking about


freezing are already at high production levels. So that will not


make much difference to the market. Still to come -


is the future electronic? Could you soon be casting your


ballot by pressing a button We'll speak to a leader in the field


of electronic voting You're with Business


Live from BBC News. And now a look at some


of the stories from around the UK- and the airline Monarch has been


forced to respond to rumours it's Our Business Correspondent Dominic


O'Connell has more on this - We were both wondering, engineers


were tipped off yesterday. They raced back to work and grabbed their


tools. Do we know whether rumours came from? It started last night


when reports on social media two aircraft had been brought across


from America to bring passengers back from resorts in case Monaarch


got into trouble. Next-day, it celebrates its 50th anniversary of


taking passengers to the Mediterranean. It released a


statement this morning, I don't know if it was in talks with the Civil


Aviation Authority last night, but a statement says it is in talks with


its current stakeholders about a new financial investment. And that would


set aside the CAA demand. Airlines need to have three months cash at


hand to continue flying. So at the moment it looks like Monaarch will


live to fly another day. It has had a rather chequered past? , Yes it is


part of the old package industry, when you flew with the airline you


booked accommodation with. It has been struggling, reinvented itself a


couple of times, but two years ago in nearly went bust. It was sold to


a new private owner and it has been enjoying a new lease of life. But


one of its strengths, in the western Mediterranean, terrorist attacks in


Turkey and Egypt have really hit it hard. Thanks very much indeed. Just


before we move on, we like this story. He thought BHS was dead, but


it is being brought back to life online. That's not bad. Online is


the future, they say. Our top story - a former


International Monetary Fund Chief economist says that a slowdown


in China poses the biggest threat A quick look at how


markets are faring. We had a good week with gains all


round. And now let's get the


Inside Track on the future of the democratic process -


casting electronic votes. Today we're talking


to an industry leader. Smartmatic provides technology


and services to six using electronic voting


systems: Belgium, Brazil, Estonia, the Philippines,


USA and Venezuela. The company has managed elections


across five continents and processed But critics are quick to warn


that these sorts of systems can be vulnerable to cyber attacks -


and we've had very high profile breaches recently, including Yahoo


and the Clinton campaign. They are wondering whether the


ballots can be vulnerable. Antonio Mugica, chief executive


of Smartmatic is here. There are critics, what breaches


have you had in that 3.7 billion votes. , Not even once in 12 years.


How people tried, but you have to have the security systems? Yes, you


have two things, you have to take security seriously, which we do. And


then protecting an election system is more simple than many other


systems. It only goes live for a few hours and it gives you a big


advantage over hackers. What is interesting about this, does it


change the habit of voters. Does it change the way they behave?


Additional study is needed, but you make the voter more accessible and


you make it easier for people with disabilities to vote, for senior


people and illiterate people to vote. You bring in more inclusion


and that has been extensively demonstrated. We have a big election


coming up, and the world is watching very closely. The US presidential


elections. The US uses a form of electronic voting. But there are


differences, explained that. The US is a peculiar case because they use


a lot of technology everywhere, but their technology is quite old. Their


systems were developed ten to 15 years ago and they need a


significant upgrade, which hasn't happened yet. Are electronic voting


systems more popular in new democracies? In old democracies we


have a settled way of doing things and it seems to work. New


democracies, they think it is modern, secure and we go with this,


is that where your market is? The largest user of the electronic


voting is the United States. But it is not fully committed and gone the


whole way to electronic voting? It is going the whole way, but it is


just outdated. We are talking to more than 40 different countries


that at some stage, they are making their voting digital. This is a


gradual process. What is the biggest obstacle, security? No, the biggest


obstacle is political will and a certain lack of momentum by some


politicians. Is there a vested interest among politicians? The


whole world works differently, but in some emerging markets, you could


say those committing fraud don't want the fraud to go away, so they


wouldn't want to bring in something that makes the system more


transparent. Some older democracies, it is more about being afraid, risk


averse. Don't touch anything because we will get in trouble. Great stuff,


we appreciate your time. In a moment we'll take a look


through the Business Pages but first here's a quick reminder of how


to get in touch with us. Our pages where you can stay ahead


with the breaking business news. We will keep you up-to-date with the


latest details with insight and analysis from the BBC's team of


visitors from around the world. We want to hear from you. Get Involved


on the BBC live web page. On Twitter, and you can find us on


Facebook on BBC business news. Richard Hunter is back to go through


the papers. We have lots of a tweet on easyJet and does age matter. Ryan


says age doesn't matter but he wants his pilot to be old enough to rent a


car in the US. We all go through the same training scheme and when you


ask, you are just another pilot. Someone else says Battle of Britain


pilots were much younger than that. What do you reckon? If you have been


through all those riggers and past, good luck to you. What about


experience? You could apply that to anything. You could apply it to the


Air France flight, the captain went and had his nap. The vice captain


and they basically flew it into the ocean. Does experience count for


something? Maybe it does. I am only guessing there is only a certain


level that can take you to, but these individuals have done very


well. Good luck to them. What is the story want to talk about? At the


Brexit one. It is in the Financial Times, people in the city are more


worried we will have a hard line over Brexiter not get this kind of


things people in the city once. The banks having a passport to do


business. This is basically going to get worse as time goes on. At this


stage we have no details. It is inevitably causing uncertainty. The


passport thing is a big question. There was a report last week, but


potentially the passports coming in, exceeded the passports going out,


which could change the game. But whatever happens and what comes out


of this, the sooner the better, it is part of the UK's GDP, the


financial services industry. It has got to be the top of the agenda.


Richard Hunter, always a pleasure. Short and sweet, sorry about that.


That is it from us today, more businesses throughout the day. We


will see you soon. Goodbye.


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