06/02/2017 BBC Business Live


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Chinese investment in Europe and the US continues to grow


reaching almos $100 billion last year - but can the trend continue?


Live from London, that's our top story on Monday 6th February.


So why is investment from a nine chain in Europe and the US --


mainland Europe and We will also speak to the


award-winning business leader who took over a waste management company


at the age of 19. Also today - Ryanair


profits are down - So do you still have


the cheap flights bug? If you are planning your holidays,


why not tell us where you are off to?


The political events of 2016 may have ignited an unprecedented period


of uncertainty for the global economy but one thing that appears


to remain unaffected is the growing appetite of Chinese investors.


Last year Chinese investment in the US increased


Meanwhile, Chinese investment into Europe grew by 90 percent.


All of this gives the impression 2016 was a good year for Western


economies when it comes to foreign investment.


Well the UK is about to begin a two-year period of Brexit


negotiations and this echoes wider concerns over the health


France, Germany and the Netherlands are all set to head to the polls


later this year and Eurosceptic parties are gaining ground


And in the US the uncertainty about what the Trump administration


means for future deals with China is very unclear.


During the recent election campaign he vowed to impose punitive


Add to that moves from Chinese authorities to crackdown on money


Chinese overseas deals could have been worth billions of dollars more


if Beijing had not blocked some 30 acquisitions with Europe and the US.


Tim Gee is Mergers and Aquisitions Partner at Baker McKenzie and one


He explained why those deals were blocked.


Some of the transactions and ousted not complete because the Chinese bid


was outbid. The Chinese bid for London City Airport was outbid by a


Canadian pension fund. Then you also have regulatory control from the


West, particularly in the US. Some deals were blocked there, including


European deals. Then you have controls within China, and what we


have seen is concern over capital outflow from China, and that has


caused some transactions to be pulled as a result of China saying,


we don't want this to happen. Linda Yueh is a Fellow in Economics


at the University of Oxford and an Adjunct Professor


of Economics at London Nice to see you, Linda. This report


is interesting on what happened last year, because the numbers are


staggering, the amount that was invested in the US and Europe, but


also the amount that wasn't. Talk us through a bit more the reasons why.


The Chinese are trying very hard to control out what capital movement.


There are some economic reasons. One is to stabilise the value of the


Chinese currency. Remember, China pegs its currency. They have to


control the amount of currency flowing outside its borders. The


other reason is they don't want companies companies being bought,


but that is how commercial transactions should work. That is


more of an excuse. The real reason is that they want to control the


capital markets, just as they control pretty much everything else


in the financial markets in the country. I wonder what your take is


on the future appetite of Chinese investors investing in the US when


we have quite convert of statements from Donald Trump, accusing China of


manipulating its currency, questioning the one China policy.


Will that affect investors' willingness to pour money in? I


think the rhetoric will have some impact, but I wouldn't overstate it.


Politically, there has always been a lot of tension between the US and


China, but a lot of businesses do deals anyway. The Chinese don't view


Donald Trump that negatively. There are some who are worried, but there


are others who say, he is a businessman. He welcomed some


Chinese companies to make jobs in America. There are only two roles in


an American economy, he said - hire American people and by American


products. -- purchase American products. . There has been a shift


away from... The Chinese Government is attempted to control not just the


financial markets but the whole economy. China's growth is slowing.


It is one of the reasons why big companies want to invest overseas,


to diversify. The Government doesn't want them to put money into things


that they don't think will help china's growth. They want


innovation, expertise and things like high-end financial services,


high-tech manufacturing, so their investment in America and Europe


tends to be permitted if it is of that ilk. It tends to be scrutinised


if it is more about buying entertainment companies. Thanks,


Linda. All was good to have you on the programme. There is more about


that on our website. Take a look when you have time. Some other news


now. Apple, Facebook, Google


and Microsoft are among 97 companies to have filed an official court


document opposing Donald The US President's executive order


prevents people from seven mainly Muslim countries


entering the United States. On Saturday, the federal appeals


court rejected the Trump administration's request


to reinstate the ban after it was initially


blocked a day earlier. Ryanair has reported an 8% fall


in profits as increased competition forced the Irish airline


to cut fares. The company says that average ticket


prices may have fallen by as much as 15 per cent over


the winter period. Ryanair has warned that 2017


will continue to be a difficult year for the industry,


but the carrier left its profit Two of Japans biggest


automakers have announced Toyota and Suzuki said they'd been


working on the deal since October. This is interesting, isn't it?


That's right. I just want to mention that Toyota has just released its


latest earnings numbers. They have raised their profit forecast thanks


to stronger sales. They say they expect profit of 15 billion US


dollars in the financial year to March, a 10% increase from the last


forecast. Toyota last year lost its title as the world's biggest


car-maker to Volkswagen. The industry is getting more


competitive. Tidying up with Suzuki is a means to address that. They


will develop green cars and other technologies, but it is worth


mentioning that both companies have a history of failed alliances, so


let's hope that this relationship works out. Thank you very much.


Asian markets rose as investors tracked a record on Wall Street.


That was fuelled by a better than expected jump in US jobs.


Financial stocks in particular have been boosted by Donald Trump's


He's likely to relax the tighter regulations that were imposed


on banks after the 2008 crash to try and prevent a repeat of that.


In Europe the main markets opened a shade higher - but fairly flat.


Some things to watch out for this week -


investors will be looking at the results from BP and Total


They are two of Europe's biggest energy companies.


Will their results reflect the rebound in oil prices?


And Samira Husain has the details about what's ahead


If the last two weeks were anything to go by, we could see another busy


week. It will also be a busy week per business news, as companies


continue to report earnings. General Motors will release results on


Tuesday and it is expected to have a record year. Coca-Cola is also


reporting this year. Fizzy drinks are going flat as consumers look for


a healthier options. The company has been trying to diversify away from


sugary drinks into coconut and vitamin water, but it hasn't been


enough -- but has it been enough? Wall Street is -- twitter is


reporting as well. Joining us is Trevor Greetham,


Head of multi asset A lot going on, as usual. We'd been


touching on some of the issues. Let's talk about travel, because


that seems to be impacting trade in Asia, with shares doing well.


Perhaps an executive order on financial regulation coming up soon?


Yes, and you will generally here Donald Trump using the short form of


the consumer protection act. He wants to deregulate the American


market generally, which would mean getting banks... Wasn't the


regulation brought in to protect us against another 2008 - style crisis?


Yes. It is that a question about whether it will be a good thing or a


bad thing, but it will have to go through Congress. There will be


opposition. Generally, we are testing America's separation of


powers. Donald Trump will say stuff and then see what happens. The


challenge to immigration. Companies now joining the legal case to try


and get the travel ban overturned. From his point of view, he can't


lose, because he says, I will ban people from these countries, and he


is then stopped from doing it, but he can say to his supporters, I


tried and I was stopped by so-called judges and so-called politicians. He


has nothing to lose. There is a continual war in the markets between


what it sees good, such as stimulus, and what they see as bad, all the


crazy stuff. Other crazy stuff coming up this week - what are you


watching? Amongst all this political noise, the world economy is strong,


which is good. Markets. China is strong this year, whereas it was


weak for four or five years. Maybe they don't want to slam the brakes


on, so it will stay quite strong. Thank you for joining us.


Still to come: We'll speak to the woman who unexpectedly took


over the family firm at the age of 19 and turned it into


You're with Business Live from BBC News.


Let's tell you a bit more about Ryanair reporting and 8% fall in


profits. They said average fares fell to ?28 per customer, a fall of


17%. Traffic was up 16% on last year. The chief financial officer of


Ryanair joins us now. It's an interesting time for you as a


company, as many of your rivals. More people travelling but you're


making less money per passenger and your profits are going down. Good to


talk to you. We're having a relatively good year, to be honest.


Our profits in the first nine months were up. As you said, passenger


numbers were exceptionally strong. We had record load factors of 95%.


An average fare of ?28. Fares could be down as much as 15% in the fourth


quarter. We have maintained our guidance of 1.35 billion, which


would be record profits for Ryanair this year. It really is an issue for


you, isn't it? We have heard you will sustain those low prices the


rest of this year and probably the first quarter of next, so your


profits will be more and more squeezed, when they? -- won't they?


We have the lowest fares of anyone out there, and we announced this


morning that our total costs will be down by 4%. When you consider that


our next nearest competitor's 's 40% higher than ours, and yet we're


looking at unit cost reductions, excluding fuel, that puts is in a


strong position relative to everyone else. We're better hedged next year


compared to competitors. We have compared to competitors. We have


which is our biggest cost, and there which is our biggest cost, and there


will be significant savings on fuel. We are very good at cutting costs in


the businesses and keeping competitive advantage. We grow


profitably on the back of it. Next year, our plan is to deliver 130


million customers. That's the chief financial officer.


More detail is on our website on Ryanair's earnings and other


companies out with news. Our top story, Chinese direct


investment into the US and Europe more than doubled to a record


$94 billion last year. Lawyers Baker McKenzie say


that was despite $75 billion worth A quick look at how


markets are faring. This is how they're looking after a


fairly flat open. The FTSE is up a shade. The DAX and the Cac down


slightly. In the UK alone, the industry


is worth more than ?0.5 billion. But it is in a predominantly


male-run sector, Jacqueline O'Donovan stands


out as a rare female leader. At the age of 19, Jacqueline took


over the family business 30 years on and O'Donovan Waste


Disposal is a fast-growing firm It employs 160 people


and mostly operates in London and the South East,


a complex and very Jacqueline O'Donovan,


Managing Director Tell our viewers about the beginning


for you. Because your father died suddenly when you were just 17. He


was running the company? He was, yes. He had a successful business


and he died back in 1985 when I was 17 and I'm the youngest of four. The


youngest of four? The youngest of four. But it fell on your shoulders


to run the business? It fell on all our shoulders, but it took a couple


of years to stabilise and once it stabilised, we picked our role and


mine was managing director. How did you manage that at such a young age?


You're running a company, what sort of business experience did you have


at that stage and were you just winging it? I was winging it. I ran


out of school at 16. I couldn't wait to get out the gatesment I had a job


as a childminder in Germany which I didn't take on and the rest is


history. What reaction do you get from friends when you tell them your


line of work? They say what line of work are you in and I say, "I bet


you can't guess." Which they can't! It is a difficult business to be in


anyway, I imagine 30 years ago, at the age of 19, being a woman running


this company in London it was extremely tough. What kind of


barriers and difficulties did you face? First of all, the biggest


barrier was I was a female in a male dominated industry which I think


bothered the men more than it bothered me. Then I didn't play


golf. That was also a bit of a hurdle especially when it came to...


Do you play golf now? No, no time to shop or golf. That was a hurdle. But


I just saw them as challenges and worked my way over them each and


everyone. How did you overcome them? Was it by proving to people that you


could hold your own and you were just as able to grasp this industry


as they were? I didn't really think about it at all. It wasn't something


that I thought about, oh, my gosh, I'm a woman in a male dominated


industry. It was something I took as a challenge. I enjoy a challenge and


I got on with it. The males felt more intimidated than I did.


The actual industry itself has changed in that period of time? Oh,


massively. We just chuck everything away in one bag and you guys would


take it away. I imagine in the UK many viewers around the world have a


similar experience, we're separating our waste, we might get fined if we


don't do it properly and it is left behind. It has completely changed.


What has that meant for your business? It brought us to the fore


front. 20 years ago if you were at a social event with regards to


business you would tell people you were in waste disposal, it was right


move on to the next question or the next subject. Now, they want to know


how you do it, what equipment is involved, whether people are still


involved, and people are more interested in how it's done. Is it


harder to make money now? Oh, yeah, without a shadow of a doubt because


it takes a lot more money, a lot more equipment to recycle more. So


yeah, the prices have gone completely. What's your ambition for


the business. Where do you take a waste disposal business in the


future? Bigger and better things. I would like to try different waste


streams. We would like to expand as a family. So yeah, bigger and


better. Are we sitting on a waste time bomb in London? I imagine any


capital city around the world in terms of waste is a big problem? I


wouldn't say it is a time bomb. I think it is very well handled.


Behind the scenes what normal people don't see is very well handled. How


much is landfill and how much in terms of percentages? We are 100%


diverted from landfill and we have been for years. The old landfill,


the biggest issue is food waste going to landfill. That's the next


hurdle for the food waste industry. I could talk to you for hours,


couldn't you? Yes. Fascinating. We can't. Thank you for coming in.


Really good to have you on the programme. Thanks.


And now for the latest instalment of our ongoing CEO secrets series


we're going to hear from the head of a family company that's now


Paul Symington is chairman of the Portuguese wine company


This is the business advice he wishes he had been given


If you were going to have a big row, leave it for the really important


things and don't have arguments over the small things.


We're a family business that goes back into the 19th century.


A family business that is united is unbeatable and there


is incressing evidence of the success of family businesses


Put aside the little irritations because they're not important.


Take a deep breath, sleep on it, come back and then


If you let small niggly things get in the way,


you really break up a really, really fantastic business.


There you have it. Loads of top tips from bosses on the programme today.


Let's see what other stories are being talked


We have to talk about Brexit. It is on the front page of the FT today. A


survey which indicates big quota companies are negative on the UK


following the vote to leave the European Union. Which is hardly


surprising given in the run-up in the campaign most of these people


would have campaigned in favour of Remain. That's despite all the data,


you know, proving them perhaps wrong? Yeah, it shows the UK is


growing reasonably at the quarter it was 0.6% one of the best of the G7.


Are they wrong? Well, it matters if they have a negative outlook because


they are the ones who drive investment into the UK. They are the


ones who provide jobs for the k. I must say also the survey is at odds


with the ones I've talked to, most business people are prag pattic


about life. Most business people I speak to are let's get on it. Some


companies will have to move people, but by and large business people are


flexible and adaptable, I think. Let's talk about this fascinating


story about the boss of Tiffany. He was shown the exit door in a kind


of... He has been in the job for two years. He got the boot on Sunday


night they announced it. Just before the Super Bowl when Tiffany had one


of its first time ads? Tiffany sells upmarket jewellery. Tourists going


to New York, you know, it costs them more to buy Tiffany jewellery, if


you know New York, Tiffany's main store is right beside Trump Tower.


They said it was getting hard for them to get people in and out of the


door because of the motorcades arriving, it is a double Trump


thump. Why get rid of the boss? That's not his fault? It is often


the boss that carries the can. It is difficult for Tiffany. All the up


market brands are flying on the edge. One mistack and you can easily


fall out of favour. There you go. On the ropes. He's looking for a new


job. Thanks Dominic. That's the end of another packed show. It flies by.


There will be more business news throughout the day on the live page


and on world business report. We will see you soon. Take care.


Bye-bye. Hello there. The week has started on


a cold note with quite a widespread frost this morning. The week will


end on a cold note as well as I'll show new a moment, but we have a wet


and windy interlude to get through first and that's heading our way


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