:00:09. > :00:12.This is Business Live from BBC News with Ben Thompson and Ben Bland.
:00:13. > :00:18.Can the European Union and China create their own alliance -
:00:19. > :00:22.As EU and Chinese leaders meet in Brussels they're looking
:00:23. > :00:24.to counter President Trump's stance on trade and climate change.
:00:25. > :00:40.Live from London, that's our top story on Thursday 1st June.
:00:41. > :00:44.So what would a deal between the EU and China look like -
:00:45. > :00:46.and what role for India in the middle?
:00:47. > :00:59.Pakistan's economy rejoins the Emerging Markets Index -
:01:00. > :01:05.a sign that stability could be returning to the turbulent nation.
:01:06. > :01:09.And European markets are looking like this at the start of a new
:01:10. > :01:14.month, but the same worries for them persist.
:01:15. > :01:17.And divide and rule - we get the inside track
:01:18. > :01:20.on the business that's split the world up into 57 trillion
:01:21. > :01:24.three-metre squares, each with its own code...
:01:25. > :01:26.It's an innovative approach to mapping that's being taken up
:01:27. > :01:29.by the likes of the Red Cross and Deutsche Bahn.
:01:30. > :01:31.Don't forget, we always want to hear from you about
:01:32. > :01:34.anything on the programme - it's easy to get in touch,
:01:35. > :01:53.Welcome to the programme, stay tuned for that Inside Track, it is
:01:54. > :01:55.fascinating, this three metres square here has its own unique code,
:01:56. > :01:59.we will explain that for you later. The EU and China will attempt
:02:00. > :02:04.to deepen ties at a summit later. There is concern among some about US
:02:05. > :02:07.President Donald Trump's Chinese Premier Li Keqiang will meet
:02:08. > :02:10.European Council president Donald Tusk and the head
:02:11. > :02:13.of the European Commission Chinese Premier Li Keqiang will meet
:02:14. > :02:19.European Council president They're looking at how they can
:02:20. > :02:21.counter Donald Trump's policy Trade in goods between the EU
:02:22. > :02:25.and China is worth well over The EU is China's biggest trading
:02:26. > :02:32.partner, while China is the EU's second-largest trading partner
:02:33. > :02:37.after the United States. It all sounds complicated, but
:02:38. > :02:42.crucial to this negotiation. The EU is worried about industrial
:02:43. > :02:45.overcapacity in China - China invested four times as much
:02:46. > :02:49.in the EU last year as European Meanwhile, EU investment
:02:50. > :02:56.in China fell for the second consecutive year -
:02:57. > :03:02.to 7.7 billion euros. Chinese and EU leaders are hoping
:03:03. > :03:06.to agree a joint statement on the Paris climate agreement,
:03:07. > :03:15.saying it is "an imperative more That of course is widely seen as a
:03:16. > :03:16.rebuff to the US, as President Trump looks set to announce the US will
:03:17. > :03:21.withdraw from the deal. With me is Dr Linda Yueh, fellow
:03:22. > :03:29.in economics at Oxford University. Ben was running through some of the
:03:30. > :03:34.issues there, if they are looking to do a deal, do you think there is
:03:35. > :03:38.enough that unites them, enough common ground to override the point
:03:39. > :03:41.of division? In terms of climate change it would be easy for them to
:03:42. > :03:45.come to an agreement because they are just affirming what they have
:03:46. > :03:49.signed up to, the Paris climate change are called, so I think
:03:50. > :03:54.anything that President Trump looks like he is pulling away from, for
:03:55. > :03:58.them it is an easy EU China alliance to form because they are giving
:03:59. > :04:02.nothing else away, they have already signed up to it and Trump is
:04:03. > :04:07.expected today at 3pm New York time to pull out of the Paris Accord, so
:04:08. > :04:10.I think that is one area. There are of course areas where it will be
:04:11. > :04:15.harder for them to come to an agreement, for instance the EU and
:04:16. > :04:20.China agree and investment treaty, there is an imbalance in terms of
:04:21. > :04:24.investment, China invests a lot in the EU but China protects it a
:04:25. > :04:27.economy more than the use of the Europeans don't get to invest as
:04:28. > :04:32.much there so on those kinds of points they don't quite see I die.
:04:33. > :04:36.But I should add they are hoping to make a breakthrough there because
:04:37. > :04:39.that would be the precursor to a trade agreement and if there was a
:04:40. > :04:45.trade agreement between the EU and China, the biggest trade bloc in the
:04:46. > :04:49.world and second-biggest economy, it would be the biggest free-trade area
:04:50. > :04:53.in the world. If China and the EU to reach a joint statement on this in
:04:54. > :04:57.what some are saying would be a rebuff to Donald Trump against his
:04:58. > :05:01.plan, as everyone expects, to pull the US out of the Paris climate
:05:02. > :05:05.deal, would it do any harm to America economically, or do you
:05:06. > :05:10.think that would be overstating things? I think economically what
:05:11. > :05:16.Trump is doing, putting America first, is likely to have a global
:05:17. > :05:21.impact for America, also likely to have an impact around trade if you
:05:22. > :05:23.starts to hint at the way multinational American businesses do
:05:24. > :05:30.supply chains, for instance. But I think for the most part things like
:05:31. > :05:34.where Trump is focusing in terms of trade and protectionism, the feeling
:05:35. > :05:37.is again with the Chinese and European sat it is harmful and
:05:38. > :05:41.wouldn't be hard for them to come out with a statement that they
:05:42. > :05:45.reaffirmed their opposition to protectionism, something which the
:05:46. > :05:52.American opposition to preclude it from being in the G-7 summit, which
:05:53. > :05:56.was just about a week ago, so again easy with things where you don't
:05:57. > :06:00.have to put any money on the table, you can just say, Trump is not
:06:01. > :06:03.helping the world economy, doing things that we think are not
:06:04. > :06:06.responsible as the world's biggest economy, so here are some easy ways
:06:07. > :06:12.to a firm that we will take this forward. Of course it is symbolic
:06:13. > :06:14.but sometimes in trade and global lines symbolism does matter and I
:06:15. > :06:20.suspect we will see a lot of that today in stead of a lot of concrete
:06:21. > :06:21.details. Linda, thank you for that, Dr Yeuh there from Oxford
:06:22. > :06:23.University. Let's take a look at some
:06:24. > :06:25.of the other stories China's manufacturing activity
:06:26. > :06:28.slowed unexpectedly in May Figures show that companies cut more
:06:29. > :06:32.jobs as demand weakened The findings contrast sharply
:06:33. > :06:36.with official readings earlier this week which showed steady
:06:37. > :06:41.manufacturing growth. The controlling shareholder
:06:42. > :06:46.of the world's largest meat-packing company,
:06:47. > :06:49.JBS, has agreed to pay a record $3.2 billion fine for its role
:06:50. > :06:55.in Brazil's corruption scandals. J Investimentos will begin
:06:56. > :06:57.payments in December and will have The fine exceeds the $2.6 billion
:06:58. > :07:04.imposed on Brazilian Shareholders in Exxon Mobil have
:07:05. > :07:09.backed calls demanding the company assesses the risks
:07:10. > :07:12.from climate change. The plan, proposed by investors,
:07:13. > :07:14.was supported by over 62% It will mean Exxon has to share more
:07:15. > :07:20.information about how new technologies and climate change
:07:21. > :07:22.regulations could impact the business and profits
:07:23. > :07:25.at the world's largest publicly Uber says its head of
:07:26. > :07:30.finance, Gautam Gupta, It comes as the taxi firm said
:07:31. > :07:38.first-quarter losses narrowed substantially from the quarter
:07:39. > :07:40.before, finally putting it Mr Gupta will leave in July to join
:07:41. > :07:47.another startup in San Francisco. He's just the latest high-profile
:07:48. > :07:59.executive to leave Uber. Let's have a look at what is
:08:00. > :08:03.happening on the BBC Business Live page, lots of news coming in
:08:04. > :08:13.including this story, as you can see, about Jimmy Choo, I don't have
:08:14. > :08:18.it in front of me so I can't say what it shows! Here it is, releasing
:08:19. > :08:22.trading update ahead of the AGM later today. We promise you it is
:08:23. > :08:26.live, these come in and we see them as you see them. Excellent progress,
:08:27. > :08:31.telling us there is strong growth with men's shoes the star performer,
:08:32. > :08:36.also fragrances performing particularly well, that is there at
:08:37. > :08:38.Jimmy Choo, which has its AGM later today.
:08:39. > :08:41.Pakistan has become the latest economy to join the MSCI
:08:42. > :08:43.Emerging Markets Index - putting them alongside economies
:08:44. > :08:54.This is quite a landmark moment, talk us through the significance of
:08:55. > :09:00.it? Indeed, the country has long been
:09:01. > :09:05.known as the basket case of south Asia but now it is being called the
:09:06. > :09:09.new Asian tiger and, as Ben mentioned, it has rejoined the
:09:10. > :09:14.Emerging Markets Index, it was kicked out years ago because of all
:09:15. > :09:17.of the political and terror related issues, and in fact the Pakistani
:09:18. > :09:22.shares have actually been outperforming the index in recent
:09:23. > :09:26.years, despite all those troubles, the continuing troubles. It is
:09:27. > :09:30.basically because of good corporate governance reforms as well as strong
:09:31. > :09:35.domestic consumption and China for one have been investing billions of
:09:36. > :09:37.dollars in the country, so definitely a landmark moment for the
:09:38. > :09:42.country. As always, really good to see you,
:09:43. > :09:46.thank you so much. Let me show you what the numbers are
:09:47. > :09:52.doing, you saw the decay at the bottom of the screen, but new month,
:09:53. > :09:57.same old worries, Trump, Brexit, and the election, Greece's debt worries,
:09:58. > :10:05.all that on the minds of investors. But ending a four-day losing run. In
:10:06. > :10:10.the US yesterday, slightly different picture on Wall Street, banking
:10:11. > :10:13.shares saw the biggest falls over worries the recent economic optimism
:10:14. > :10:20.in the United States off the back of that Trump pump, as it has been
:10:21. > :10:26.called, might be fading, more on that shortly. In the UK, the month
:10:27. > :10:30.of May was decent for the FTSE 100, it saw its best month this year
:10:31. > :10:35.despite falling commodity prices, and remember it is the weak pound
:10:36. > :10:39.helping to boost how earnings look on the FTSE 100, that is why it is
:10:40. > :10:43.doing pretty well. But lots of uncertainty still to come in the
:10:44. > :10:47.form of elections all over Europe. No-one quite willing to call what
:10:48. > :10:52.happens next, probably a safe choice. More on that shortly with
:10:53. > :10:58.our markets guest, who is standing by, but let's head to the US, where
:10:59. > :10:59.Samir Hussein has an assessment of what we move the market on Wall
:11:00. > :11:03.Street. US paints and coatings maker PPG
:11:04. > :11:05.Industries have until Thursday midnight to either file papers
:11:06. > :11:07.with Dutch regulators detailing its plans to launch
:11:08. > :11:10.a formal bid for the paint maker Akzo Nobel, or walk away
:11:11. > :11:12.for at least six months. Those plans will also include
:11:13. > :11:14.the actual bidding price. Earlier this week Dutch regulators
:11:15. > :11:17.denied PPG Industries' request The US Commerce Department
:11:18. > :11:24.will likely report that construction spending is up 0.5% in April
:11:25. > :11:31.from a 0.2% fall in March. And finally, auto-makers report may
:11:32. > :11:36.US car and truck sales, with investors watching to see
:11:37. > :11:38.if the industry can snap A third down month in a row
:11:39. > :11:46.could put pressure on Detroit auto-makers to order more lay-offs
:11:47. > :11:53.and production cuts. Simon Derrick, chief markets
:11:54. > :12:03.strategist at the Bank Nice to see you. All this data from
:12:04. > :12:10.China, two differing pictures depending on which bit you choose to
:12:11. > :12:15.go with. And I think the weakening economy story is the central one
:12:16. > :12:19.here, the latest manufacturing numbers confirm that. Over the
:12:20. > :12:26.course of the last month or so the Chinese markets have been reacting
:12:27. > :12:32.very negatively to this, you had seen the equity markets down, Moody
:12:33. > :12:36.'s downgraded China last week. Over the last few days, something curious
:12:37. > :12:44.has happened, there has been talked about some of the big state banks in
:12:45. > :12:51.China, some talk about the national team stepping in to support the
:12:52. > :12:57.equity markets, equities are up, and it feels as though what we are
:12:58. > :13:01.seeing is an attempt to support markets, an attempt to reconfirm
:13:02. > :13:06.that they are there to provide stability. Whether that is possible
:13:07. > :13:10.in the long-term, given the fact that we have this underlying
:13:11. > :13:14.weakness and underlying concerns in the Chinese market, tough to say,
:13:15. > :13:17.but clear that the authorities want to try and provide support. Let's
:13:18. > :13:25.talk about the Fed briefly as well because we also talked about what
:13:26. > :13:29.happens next and it is interesting if you look at what Trump has been
:13:30. > :13:34.doing, there was all of that excitement which has faded away and
:13:35. > :13:38.it is whether they can put a floor under this. Yes, fairly anodyne
:13:39. > :13:45.reports on the US economy did not sound full throated. The question is
:13:46. > :13:49.now, are we going to have a second rate hike before the end of the
:13:50. > :13:54.year? Given what we have heard from the Fed, it suggests maybe it is
:13:55. > :13:59.open to question. If that is true, we may be talking about that. There
:14:00. > :14:04.has been talk about it being a done deal but the markets have got ahead
:14:05. > :14:08.of themselves? From the perspective of June, guidance is so clear it is
:14:09. > :14:11.hard to argue anything else. The December rate hike, maybe the market
:14:12. > :14:14.has got ahead of itself although governors have been given that
:14:15. > :14:18.guidance and I think they will back of it a little bit. Good to see you,
:14:19. > :14:20.I know you will talk us through some stories later including the climate
:14:21. > :14:39.change issue that is on everyone's agenda at the moment, whether Trump
:14:40. > :14:41.and the US will ditch it, so we will talk about that later.
:14:42. > :14:44.Still to come, mapping out the world, three words at a time. We
:14:45. > :14:47.will meet the firm that says it can pinpoint anywhere in the world with
:14:48. > :14:50.just three words. The man behind it is here to explain how it works.
:14:51. > :14:54.You are with Business Live from BBC News.
:14:55. > :15:01.We are going to talk house prices. They continued to slow in May,
:15:02. > :15:06.according to the nationwide. It is the third month in a row that prices
:15:07. > :15:08.have cooled. Overall prices are rising at 2.1%, the slowest rate of
:15:09. > :15:12.growth in four years. Robert Gardner is Nationwide's chief
:15:13. > :15:20.economist and he joins us now. Last time I think I spoke to
:15:21. > :15:25.somebody about house prices, they said you can't be too much into
:15:26. > :15:30.month by month. Is this now a trend? If you look at the annual house
:15:31. > :15:35.prices, things have soft and a little. I would emphasise it is
:15:36. > :15:39.probably a little bit at this stage. If you look at the annual rate of
:15:40. > :15:45.house price growth in recent years, it has largely been confined to a
:15:46. > :15:55.three to 6% band. We have just moved outside that. Only a little below.
:15:56. > :15:59.Robert, we should discuss the election. All sorts of issues on the
:16:00. > :16:03.table as we approach the vote next week. Housing is clearly a big issue
:16:04. > :16:12.for people trying to get on the ladder, but also for people on it.
:16:13. > :16:16.Your assessment? The key thing is the supply side. If you look at the
:16:17. > :16:21.stock of homes on the market, it is still close to a 30 year low. In the
:16:22. > :16:24.last few years we have seen the number of homes being built
:16:25. > :16:27.consistently lagging behind increasing population. Whoever wins
:16:28. > :16:34.the election, a key focus has to be how to increase supply on a
:16:35. > :16:40.sustainable basis. Up or down next? What happens next? We think the
:16:41. > :16:45.economy will probably slow a little as the squeeze on household budgets
:16:46. > :16:48.intensifies. There is support for a house prices from low interest rates
:16:49. > :16:53.and the lack of supply. Overall house price growth will probably
:16:54. > :16:54.around 2% and activity a little bit weaker from where we are at the
:16:55. > :17:07.moment. Thank you. Robert Gardner. You can read more about that on the
:17:08. > :17:12.business life page. Lloyds Banking Group saying it has completed the
:17:13. > :17:20.acquisition of MBNA, the credit card business. That gives them a share of
:17:21. > :17:28.26%. Full details on the website. You're watching Business Live -
:17:29. > :17:39.our top story... Can the EU and China create their
:17:40. > :17:43.own alliance, cutting out America? There is a lot of concern of late
:17:44. > :17:50.about Donald Trump's plans to ditch the Paris climate accord. EU and
:17:51. > :17:54.Chinese leaders are meeting later looking to deal with worries on
:17:55. > :17:56.Donald Trump's stance on climate change, and trade.
:17:57. > :17:59.If you live in a city, town or village, your postal address
:18:00. > :18:01.is probably something you just take for granted.
:18:02. > :18:03.But millions of people live in communities so remote
:18:04. > :18:04.or so un-industrialised, that there simply
:18:05. > :18:11.That's where our next guest comes in.
:18:12. > :18:13.He runs an alternative mapping company called what3words.
:18:14. > :18:15.The aim is pretty ambitious - to completely revolutionise
:18:16. > :18:21.It aims to do this by splitting the globe into 57 trillion
:18:22. > :18:23.three metre squares, each described by a unique
:18:24. > :18:31.It's already been taken up by postal services in five countries,
:18:32. > :18:34.including Mongolia, Djibouti and Ivory Coast.
:18:35. > :18:37.Emergency services around the world are ALSO using
:18:38. > :18:41.the system to pinpoint people with no addresses.
:18:42. > :18:44.Chris Sheldrick, is the founder and boss of what3words
:18:45. > :18:58.Welcome to the programme. We sort of rent through how it works. You can
:18:59. > :19:03.probably do a better job at! It all rests on three little words to map
:19:04. > :19:07.out a small area that is unique to that footprint. I was looking on it
:19:08. > :19:15.earlier. Depending on where we are in this building... How does it
:19:16. > :19:20.work? It is a global address system. The idea is to make a fast, simpler
:19:21. > :19:23.alternative to GPS coordinates, the only other thing available
:19:24. > :19:28.everywhere. Nobody wants to remember an eight digit Longitude Prize Macca
:19:29. > :19:35.latitude. We have divided the world into three metre squares. There are
:19:36. > :19:40.enough combinations of three words. You can go around the world and name
:19:41. > :19:47.everywhere with something simple. Out there in English? We do this in
:19:48. > :19:51.14 languages. It means if you live in a country where there just is no
:19:52. > :19:55.real address system you can use, what will you put when you order
:19:56. > :20:00.something online? When you call emergency services? You look up your
:20:01. > :20:06.three word address and you can use it for any of these things. How do
:20:07. > :20:16.you make money? The what3words app is free. We licensed businesses.
:20:17. > :20:21.Courier companies, postal services, navigation apps, car companies,
:20:22. > :20:24.anybody who wants to use three word addresses in bulk to improve their
:20:25. > :20:33.efficiency, we charge them a licence fee. UPS say that for each mile they
:20:34. > :20:37.get lost every day, that costs their business 15 billion -- $15 million a
:20:38. > :20:45.year. If companies can benefit, that is who we charge a licence fee too.
:20:46. > :20:50.Who would use it? In many developing countries it is vital because there
:20:51. > :20:53.are some honey parts that don't have an address system. It is also
:20:54. > :20:59.relevant in developed places. I lived in Dubai for a long time.
:21:00. > :21:02.Struggling with an address system. I would describe my address to the
:21:03. > :21:08.postman. That was how people found you. I can see the use it there.
:21:09. > :21:13.That is exactly it. There are also That is exactly it. There are also
:21:14. > :21:20.some places you don't think would have a problem. In London, if people
:21:21. > :21:25.come to our office, you put the postcode in and it takes you to the
:21:26. > :21:31.40 flyover. People call and say, I can see you down there. If you think
:21:32. > :21:37.about where we are going with cars which may not have steering wheels,
:21:38. > :21:40.it is kind of OK, you go, it's a little bit inaccurate but I will
:21:41. > :21:45.We should have a way to reference We should have a way to reference
:21:46. > :21:49.anywhere very precisely. No delivery driver should be getting lost trying
:21:50. > :21:52.to find your business. People are losing so much time and money over
:21:53. > :21:57.the developed world with this problem that could be so easily
:21:58. > :22:02.fixed. That is why is three metre square. It is very precise?
:22:03. > :22:04.Absolutely. We wanted to make squares as small as possible but
:22:05. > :22:11.make sure we didn't run out of words. How did you get into this?
:22:12. > :22:14.How did you get started? I used to work on the live music business.
:22:15. > :22:21.Every day I had to get people to somewhere new in the world, whether
:22:22. > :22:27.at Wembley or an Italian mountainside. Everybody used to go,
:22:28. > :22:31.I'm lost! GPS coordinates were a total no-go. I thought, if I can
:22:32. > :22:35.make this so easy that anybody from a child to a grandparent to a
:22:36. > :22:39.musician can use this, this would be globally valuable. Thank you for
:22:40. > :22:40.talking's through it. Really fascinating. Best of luck
:22:41. > :22:44.with it. That's the tarmac of an airport
:22:45. > :22:49.in Sri Lanka, which has been dubbed the world's emptiest International
:22:50. > :22:50.Airport. It cost about $1 billion to build,
:22:51. > :22:55.funded by loans from China. Our team went there,
:22:56. > :23:13.to Mattala Rajapaksa This is Sri Lanka's second
:23:14. > :23:18.International Airport after Colombo. It is in the south of the country
:23:19. > :23:20.not a whole lot going on here. Let's not a whole lot going on here. Let's
:23:21. > :23:42.take a look. Flybe is the only airline that
:23:43. > :23:51.operates. How many passengers do you think? Actually per day we can say
:23:52. > :24:18.about 50 to seven Beast -- 75% depart from this airport.
:24:19. > :24:20.What other business stories has the media been
:24:21. > :24:23.Simon Derrick, Chief Markets Strategist, Bank
:24:24. > :24:26.of New York Mellon - is joining us again to discuss.
:24:27. > :24:33.Simon, we have been talking about this climate change change of heart
:24:34. > :24:43.by Donald Trump. I suppose it was always saying all along... I think
:24:44. > :24:46.the first thing is, he has always been in there all the way through
:24:47. > :24:50.his campaign and onwards. That doesn't mean we are going to go
:24:51. > :24:55.through with this. There have been campaign pledges not carried out.
:24:56. > :24:59.Remember backing off on China and currency manipulation? It is not
:25:00. > :25:02.certain he will say something this afternoon. But it looks likely.
:25:03. > :25:07.There is definite opposition within the White House. We know Rex
:25:08. > :25:13.Tillerson has obviously got concerns. Ivanka Trump has made
:25:14. > :25:19.comments as well. What impact does this have on markets? Interesting on
:25:20. > :25:23.the day that Exxon tells us the -- they need to be more transparent and
:25:24. > :25:29.look at how climate change affects business. The
:25:30. > :25:38.there are some easy things that can happen for markets. Maybe it is an
:25:39. > :25:42.old energy, new energy thing. I think the markets will focus on
:25:43. > :25:49.isolationism. Is that the real story? Is the US moving towards
:25:50. > :25:52.that? If it moves towards this idea of the EU and China, is that a
:25:53. > :25:54.pro-Euro story? That might be interesting. Thank you. Have a good
:25:55. > :26:13.weekend. Good morning. Today marks the start
:26:14. > :26:14.of meteorological