19/10/2016 BBC Business Live


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This is Business Live from BBC News with Sally Bundock and Rachel Horne.


China's economy is ticking along with growth at 6.7%,


but what about the country's mounting debt problem?


Live from London, that's our top story on Wednesday, 19th October.


China is fuelling the move to consumer-driven economy


Also in the programme, and not such a Hollywood ending,


box office superstar Leonardo DiCaprio says he's


cooperating with an investigation into Malaysian state fund 1MDB.


Minister kets in Europe don't know which direction to go. They were up


and now they're down. We'll talk you through the winners and losers.


And we're talking wine - the UK's oldest merchant


Berry Brothers and Rudd started popping corks more than 300 years


ago and have been supplying the UK's Royal Family since the 17th century


- we'll ask the boss how the company is staying relevant and keeping


So today we want to know - if you can't make


money at the bank would you invest it in your wine rack?


It is never too early for a glass of good quality wine on Business Live!


New growth figures from China has added to a raft of indicators


suggesting the Asian powerhouse is becoming addicted


The world's second largest economy grew at an annualised rate of 6.7%


As we've been reporting, the country's growth rate has slowed


significantly since hitting double digits five years ago.


It is now at its slowest rate


The figures underline China's difficulty of transforming


the economy away from factories and exports towards consumption


to help drive up wages and living standards.


Now while government debt in China may appear to be relatively low,


corporate debt stands at a worrying 145% GDP.


One of the major issues is that State-owned businesses actually


account for more than half of that debt pile and Chinese banks are now


holding more and more loans from those companies that are either


in default or close to being in default.


We can cross live now to Shanghai and speak to our


Robin thank you for joining us. The figures seem to give the impression


that China's economy is stabilising, but is there anything else going on


behind the scenes? Well, it is still growing, but still slowing is the


overall picture. What we have is an economy where there is evidence that


the Chinese Government through its policies seems to be stabilising the


big picture and managing to shift away from an investment-led economy,


focussing on exports and towards a more consumption-led domestically


driven economy. Consumption accounting for over 70% of growth in


the last quarter. That's a big jump on the similar period in the year


before. So that is something that the Chinese Government will be very


happy about, but dig a bit deeper and it is a familiar story.


Infrastructure investment from central Government ticking up in


that same three month period. That's evidence yet again that perhaps the


fuel, the significant fuel in this engine of growth, is still money


coming from central Government and being filtered down to provincial


Government in big infrastructure projects and that's something that


China is trying to move away from, but not too quickly because, of


course, here in communist China Government spending is still so, so


dominant. Robin, quite often when we talk about China and we look at


Chinese figures, there is a question over the reliability of the figures


that are issued, what's the feeling about today's figures? There is


consistent criticism and eyebrows raised about the accuracy, even the


veracity of figures like this. The Chinese Government won't like it.


There has been criticism in the past of media like us and others who


question the statistics, but look, for three-quarters in a row now, the


Chinese Government has released official figures showing that growth


is at exactly 6.7%. It is very close to the official Government target of


between 6.5% and 7.5% growth overall for 2016. They have never had this


back-to-back consistency before and many people suspect that it is just


frankly too good to be true. Just last month the former chief


economist at the IMF told the BBC that he thought a truer figure was


around 3% growth in this country. So look, we raise concerns and we ask


questions about the figure, but the Chinese Government insist they are


accurate, but there are many who see this, three-quarters in a row, spot


on 6.7%, it is convenient, isn't it? Robin Brant, in Shanghai, thank you


very much for joining us this morning.


Yahoo's profits more than doubled to $163 million in the third quarter


The numbers provide some reassurance to investors after it was revealed


that 500 million customers had their accounts hacked.


These are the first financial results since Verizon


announced its plan to buy the tech company for $4.8 billion.


Shares in Sharp have risen by more than 10% after the loss making


Japanese company announced it expects full year profits


to "improve significantly" compared to last year.


The electronics firm was snapped up by Taiwanese manufacturer Foxconn


for $3.5 billion in July after going through two major


South Korean prosecutors are reportedly poised


to file corruption charges against the chairman of one


of the country's most influential conglomerates,


It's alleged Shin Dong-bin, together with his father and brother


committed offences worth hundreds of millions of dollars.


There is a lot going on on the markets this morning. Some


eye-catching movers on the London markets. We can see some shares are


down. BHP Billiton down 0.7%. That's despite the fact that some commodity


prices seem to be coming back up. Falling commodity prices have been a


story for the last year or so. BHP Billiton seeing early signs of


market recovery. Oscar-winning star Leonardo DiCaprio


says he is aiding authorities with the ongoing investigation


into Malaysian state Christine Hah is in Singapore


and has the details. Well, as you know the Department of


Justice in the US filed a civil suit back in July. They want to get back


about $1.3 billion which they say is money that came from the Malaysian


state fund and channelled into US assets like paintings, luxury


apartments, a private jet and investment into the Leonardo


de-Capri owe's film The Wolf Of Wall Street, even though he's


co-operating, when he won a Golden Globe he personally thanked the


people implicated people in the suit a the person who runs the production


company. So a little bit of life imitating art there! Very


interesting. Christine, thank you very much. The plot thickens on that


story. A mixed picture in Asia, but I have


to say, markets around the world really relieved about the numbers


coming out of China. Robin mentioning some of the challenges


and scepticism about the numbers still. There was no surprises or


shocks. So Japan and Hong Kong, everywhere else relatively flat. We


had the oil price heading upwards. Let's look at Europe. Just to have a


sense of how things are going. All headed south at the moment. Rachel


rattling through the winners and losers for the FTSE 100. Of course,


we've got the UK jobless figures coming out later today. We will talk


about the issues in Europe in a moment.


Samira Hussain has the details about what's ahead on Wall Street Today.


The third and final US Presidential debate takes place on Wednesday in


Las Vegas. It will be moderated by Fox News and the topics will include


debt, entitlements and the immigration and the economy. Lots of


companies will be reporting earnings on Wednesday. In financials, we will


hear from Morgan Stanley and like other big banks, Morgan Stanley has


been cutting costs to try and make up for lower profits. Oil companies


Kinder Morgan and Hallliburton will be reporting earnings. The two have


been hit by low oil prices and falling demand. And finally, online


retailer eBay saw traffic from online searches increase for the


first time in nearly six quarters. Attracting more shoppers to its


website. And that will be welcome news for investors who will be


looking for updates on the company's outlook ahead of the holiday


shopping season. Sue Noffke, UK Equities Fund


Manager at Schroders. We will look at UK figures. Lots of


figures out for the UKment we had inflation figures out yesterday, up


1%. A steep rise. Unemployment figures due out today. What are we


expecting and how is sterling reacting? Well, I think, everyone is


trying to pick through the figures to find that evidence of Brexit. And


what was interesting in yesterday's inflation data was that we weren't


seeing very much other than the rise in oil which has been independent,


but of course, it is priced in dollars. So that's been adding to


inflationary pressures from a very low base. If we look to employment


data, this will be the second most post the decision to leave the EU


that we get. Last month's figures were surprisingly steady. So it is a


question of do we carry on in this steady vain or do we start to see


some of the business nervousness that's been talked about actually


come through in the figure as soon as Some of the fears is about


inflation, is about the weakness of the pound, all these things and the


effects it will have on the UK economy and that jump in inflation,


more than expected, kind of fuel those fears a bit, do you think or


not? No. I think we know that it takes sometime for sterling's


depression to feed through into the inflation numbers. I think it is


around what policy responses are we going to get? The Bank of England


tends to look through any increase that comes from currency moves


through to inflation. In terms of holding monetary policy fairly


steady. I would expect that's what the Bank of England will do this


time as well. What we will have to see is what happens to wages and


employment. Because if we start to see wage pressures and that feed


through on top of sterling's depression to inflation then I think


the Bank of England has a tougher job to do. OK. Sue, those figures


out at 9.30am UK time. So out in 45 minutes. I wouldn't want to be Mark


Carney right now or Philip Hammond for that matter!


Still to come, what makes a winning wine?


We'll be speaking to one of the UK's oldest merchants to find out.


You're with Business Live from BBC News.


The jobless figures are out in 45 minutes time.


Official figures this morning will show how many


people are out of work - with the government pushing


companies to do more to recruit workers from within the UK.


Many businesses say they are doing just that.


Victoria Fritz is at one such factory in Birmingham with more.


Hello there. Yes, that's right. They're currently a record number of


people in work in Britain. Over 31 million people in Britain actually


have jobs. Over 28 million of those are UK nationals which leaves about


3.5 million that are classified by the Office for National Statistics


as non-UK nationals and it is that group and the businesses that employ


them that have found themselves at the centre of a fierce debate over


immigration, economic immigration and whether or not there should be


restrictions to who can apply for jobs in this country? Now this


company, it is a factory in Birmingham. It makes cooling systems


for everything from buses and coaches to things like military


vehicles as well. It is exporting to 28 countries across the world. About


22% of the business is actually staffed by people who were born


overseas and the boss has been telling me that without that mix, he


would face skills shortages right across the business from here on the


shop floor all the way up to the level of senior thermal engineers.


He says without that mix, without access to people from across the EU,


and elsewhere, he wouldn't be able to develop next gun ration products


things like the thermal systems that are going to go into the next


generation of electric vehicles. So he's concerned about some of the


comments that came out from the Tory Party conference earlier on in the


month that there maybe some kind of restriction on access to people from


abroad. This is an issue that's a very emotive, it is an emotive issue


as well as a practical one and one that's been discussed by businesses


from the shop floor through to management level across the country.


Those employment figures are coming out at 9.30am. So stay tuned.


That was Victoria. We've got results in from Hotel


Chocolat. Their revenue is up. The top story today: the Chinese


economy is growing at a rate of 6.7%.


analysts warn it could be storing up problems for the future.


Let's have a look at the markets. The European markets slightly in the


red. The figures from China gave a bit of stability. We can see that


they are trading ever so slightly down. Keep an eye on the pound. It


might move. Now, it's time for Inside Track


and today we are focusing Berry Bros Rudd is one


of UK's oldest businesses. Founded in 1698 -


the merchant started supplying Britain's royals with wine


during the reign of King George III - and are still the official


suppliers to Buckingham Palace. Today, Berry Bros sells a range


of over 3,000 wines that are sourced from over 25 countries


around the world. Statistics based


on a survey conducted by Wine Intelligence show that 25%


of the UK's nearly 30 million regular wine drinkers ordered wine


on the internet last year. So is this the future


of wine-selling? Dan Jago, Chief Executive


of Berry Brothers and Rudd is here. Good morning. We paused the question


about how important the Internet is. Were you the UK's first merchant to


go online? Yes, back in the early 90s. It was pretty revolutionary.


You could order wine online and have it delivered. We are still doing


that today. The way you came is an interesting story, you had gone to


Tesco as wine director and then you went to Berry Bros. How did you find


it crossing the fence? I've not worked out whether it is put your


turned gamekeeper or the other around. -- poacher. I worked with


Tesco, and when I was told, do you want to take on the biggest wine


buying job in the world it was quite hard to decline. Very different


businesses. One was about entrepreneurialism and the other was


about consistency. But in both cases it has been customer focused. Most


retailing is about customers and people. It is interesting you should


say that. In the news at the moment there is talk of tension between


suppliers and supermarkets, especially with the devaluation of


the pound and what that means. Take us through that. We always get the


impression the relationship is not good between Tesco and suppliers.


The buyer and the seller will always have a convert of relationship. --


combative relationship. I really enjoyed it and our suppliers


realised we were a business aiming to do the best job for customers. We


have enthusiastic negotiations with our suppliers for similar regions.


Let's talk about sterling. It has been falling. Have you felt the


impact? It has been marginal so far. If you go back a few years the


exchange rate was roughly the same. It is not somewhere we've been


before but the speed has caught everybody by surprise. It is going


to have to happen. If we get stability we will predict for the


future. Most of your sales are for individuals. Just over half. Two


used order wine for them and people can sell each other's wine. We have


a unique thing called PBX. It is an exchange. We have a lovely shared


down in Basingstoke. It is very glamorous. -- storage facility. We


keep wine there and we allowed customers to sell to other


customers. We want to know about Buckingham Palace. What are you


allowed to tell us. It's just down the road. Quite close. We want to


know about their drinking habits. My chairman, the seventh generation


chairman, is keeper of the Queen's wine cellar. I'm sure he's not


allowed to tell anything. He doesn't tell me anything! But we are very


proud of having a warrant and we have had it since the 17th century.


What is the most expensive wine you've got? We've got a Magnum of


Burgundy for ?16,000. I think it is a collectors item. So little of it


was made and it is a wine that everybody wants. We could talk for


hours. Thank you for your time. Throughout the week we've been


hearing personal stories of workers and entrepreneurs who are driving


what is known as the gig economy. Over the last year Brazil


has seen a huge jump in its unemployment rate -


and this type of freelance work has helped many


there to keep earning an income. We hear from two people who say


the gig economy is working for them. I love the fact that she can stay at


home with her dog. We ask you at the beginning of the programme, you


invest in the finer things? Interest rates, some of you have been getting


in touch. We've had a tweet from Sonia seeing she would invest your


money in guilt tracker funds. Andy says peer-to-peer lending sites have


been around since 2006, at the time they were seen as very


revolutionary, now it's a standard recess. One of you did mention wine.


We should have spoken about that with a guest. We've got Dominic


O'Connell with us. Good morning. We're going to start with this story


on sterling. It says the pound could crash a further 10%. We've seen it


down 19% against the dollar. Still further to go? Could be. If you look


at the history of the pound it has had this ever since the Second World


War, and a typical correction has been around 25%. If you look at that


then it does not look out of order but yesterday it had the best day


since the vote. There will be a lot of flip-flopping around as we go


through this political process of negotiating the terms. One report


yesterday was that Parliament would get the final vote, that gave it the


best day. If Goldman Sachs is right, what impact will it have? You will


see what we had last week, more of that. This thing of imported goods


being more expensive and falling living standards. Her first speech


was, I'm going to improve living standards. If, in her first year,


living standards fall, that's a political problem let's move on to


Yahoo. Earnings more than doubling. The market expectation comes after


this big data hack. Everybody thought it would send people


scurrying away from them. It has not happened. It may be too early to


tell. Some analysts said it will have checked they have not been


compromised. I think Yahoo is benefiting from customer inertia.


People don't pay much attention to these reports. More interesting,


they are about to sell the online business, the bit we think of as


Yahoo, in America. But the most valuable bit is the 15% stake they


own in Ali Baba from China. Let's talk about these reports that the


CEO of Nissan Renault could be on the move. What do you do to the man


who is chief executive of the biggest car companies in the world?


You give him a third. Nissan is about to buy 30% of Mitsubishi. It


has all was been the weakest of the Japanese car-makers. It will happen


after a board meeting in December. They need to be turned around. The


comings and goings. Watch this space. Thanks for coming by the


studio. That's it for another day. We're back tomorrow. See you soon.


Goodbye. It looks like a pretty reasonable


day across most parts of the United Kingdom. Some showers in the


forecast but most places for most of the claim will have a reasonable day


with some spells of


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