01/06/2017 BBC Business Live

This is Business Live from BBC News with Ben Thompson and Ben Bland.

Can the European Union and China create their own alliance -

As EU and Chinese leaders meet in Brussels they're looking

to counter President Trump's stance on trade and climate change.

Live from London, that's our top story on Thursday 1st June.

So what would a deal between the EU and China look like -

and what role for India in the middle?

Pakistan's economy rejoins the Emerging Markets Index -

a sign that stability could be returning to the turbulent nation.

And European markets are looking like this at the start of a new

month, but the same worries for them persist.

And divide and rule - we get the inside track

on the business that's split the world up into 57 trillion

three-metre squares, each with its own code...

It's an innovative approach to mapping that's being taken up

by the likes of the Red Cross and Deutsche Bahn.

Don't forget, we always want to hear from you about

anything on the programme - it's easy to get in touch,

Welcome to the programme, stay tuned for that Inside Track, it is

fascinating, this three metres square here has its own unique code,

we will explain that for you later. The EU and China will attempt

to deepen ties at a summit later. There is concern among some about US

President Donald Trump's Chinese Premier Li Keqiang will meet

European Council president Donald Tusk and the head

of the European Commission Chinese Premier Li Keqiang will meet

European Council president They're looking at how they can

counter Donald Trump's policy Trade in goods between the EU

and China is worth well over The EU is China's biggest trading

partner, while China is the EU's second-largest trading partner

after the United States. It all sounds complicated, but

crucial to this negotiation. The EU is worried about industrial

overcapacity in China - China invested four times as much

in the EU last year as European Meanwhile, EU investment

in China fell for the second consecutive year -

to 7.7 billion euros. Chinese and EU leaders are hoping

to agree a joint statement on the Paris climate agreement,

saying it is "an imperative more That of course is widely seen as a

rebuff to the US, as President Trump looks set to announce the US will

withdraw from the deal. With me is Dr Linda Yueh, fellow

in economics at Oxford University. Ben was running through some of the

issues there, if they are looking to do a deal, do you think there is

enough that unites them, enough common ground to override the point

of division? In terms of climate change it would be easy for them to

come to an agreement because they are just affirming what they have

signed up to, the Paris climate change are called, so I think

anything that President Trump looks like he is pulling away from, for

them it is an easy EU China alliance to form because they are giving

nothing else away, they have already signed up to it and Trump is

expected today at 3pm New York time to pull out of the Paris Accord, so

I think that is one area. There are of course areas where it will be

harder for them to come to an agreement, for instance the EU and

China agree and investment treaty, there is an imbalance in terms of

investment, China invests a lot in the EU but China protects it a

economy more than the use of the Europeans don't get to invest as

much there so on those kinds of points they don't quite see I die.

But I should add they are hoping to make a breakthrough there because

that would be the precursor to a trade agreement and if there was a

trade agreement between the EU and China, the biggest trade bloc in the

world and second-biggest economy, it would be the biggest free-trade area

in the world. If China and the EU to reach a joint statement on this in

what some are saying would be a rebuff to Donald Trump against his

plan, as everyone expects, to pull the US out of the Paris climate

deal, would it do any harm to America economically, or do you

think that would be overstating things? I think economically what

Trump is doing, putting America first, is likely to have a global

impact for America, also likely to have an impact around trade if you

starts to hint at the way multinational American businesses do

supply chains, for instance. But I think for the most part things like

where Trump is focusing in terms of trade and protectionism, the feeling

is again with the Chinese and European sat it is harmful and

wouldn't be hard for them to come out with a statement that they

reaffirmed their opposition to protectionism, something which the

American opposition to preclude it from being in the G-7 summit, which

was just about a week ago, so again easy with things where you don't

have to put any money on the table, you can just say, Trump is not

helping the world economy, doing things that we think are not

responsible as the world's biggest economy, so here are some easy ways

to a firm that we will take this forward. Of course it is symbolic

but sometimes in trade and global lines symbolism does matter and I

suspect we will see a lot of that today in stead of a lot of concrete

details. Linda, thank you for that, Dr Yeuh there from Oxford

University. Let's take a look at some

of the other stories China's manufacturing activity

slowed unexpectedly in May Figures show that companies cut more

jobs as demand weakened The findings contrast sharply

with official readings earlier this week which showed steady

manufacturing growth. The controlling shareholder

of the world's largest meat-packing company,

JBS, has agreed to pay a record $3.2 billion fine for its role

in Brazil's corruption scandals. J Investimentos will begin

payments in December and will have The fine exceeds the $2.6 billion

imposed on Brazilian Shareholders in Exxon Mobil have

backed calls demanding the company assesses the risks

from climate change. The plan, proposed by investors,

was supported by over 62% It will mean Exxon has to share more

information about how new technologies and climate change

regulations could impact the business and profits

at the world's largest publicly Uber says its head of

finance, Gautam Gupta, It comes as the taxi firm said

first-quarter losses narrowed substantially from the quarter

before, finally putting it Mr Gupta will leave in July to join

another startup in San Francisco. He's just the latest high-profile

executive to leave Uber. Let's have a look at what is

happening on the BBC Business Live page, lots of news coming in

including this story, as you can see, about Jimmy Choo, I don't have

it in front of me so I can't say what it shows! Here it is, releasing

trading update ahead of the AGM later today. We promise you it is

live, these come in and we see them as you see them. Excellent progress,

telling us there is strong growth with men's shoes the star performer,

also fragrances performing particularly well, that is there at

Jimmy Choo, which has its AGM later today.

Pakistan has become the latest economy to join the MSCI

Emerging Markets Index - putting them alongside economies

This is quite a landmark moment, talk us through the significance of

it? Indeed, the country has long been

known as the basket case of south Asia but now it is being called the

new Asian tiger and, as Ben mentioned, it has rejoined the

Emerging Markets Index, it was kicked out years ago because of all

of the political and terror related issues, and in fact the Pakistani

shares have actually been outperforming the index in recent

years, despite all those troubles, the continuing troubles. It is

basically because of good corporate governance reforms as well as strong

domestic consumption and China for one have been investing billions of

dollars in the country, so definitely a landmark moment for the

country. As always, really good to see you,

thank you so much. Let me show you what the numbers are

doing, you saw the decay at the bottom of the screen, but new month,

same old worries, Trump, Brexit, and the election, Greece's debt worries,

all that on the minds of investors. But ending a four-day losing run. In

the US yesterday, slightly different picture on Wall Street, banking

shares saw the biggest falls over worries the recent economic optimism

in the United States off the back of that Trump pump, as it has been

called, might be fading, more on that shortly. In the UK, the month

of May was decent for the FTSE 100, it saw its best month this year

despite falling commodity prices, and remember it is the weak pound

helping to boost how earnings look on the FTSE 100, that is why it is

doing pretty well. But lots of uncertainty still to come in the

form of elections all over Europe. No-one quite willing to call what

happens next, probably a safe choice. More on that shortly with

our markets guest, who is standing by, but let's head to the US, where

Samir Hussein has an assessment of what we move the market on Wall

Street. US paints and coatings maker PPG

Industries have until Thursday midnight to either file papers

with Dutch regulators detailing its plans to launch

a formal bid for the paint maker Akzo Nobel, or walk away

for at least six months. Those plans will also include

the actual bidding price. Earlier this week Dutch regulators

denied PPG Industries' request The US Commerce Department

will likely report that construction spending is up 0.5% in April

from a 0.2% fall in March. And finally, auto-makers report may

US car and truck sales, with investors watching to see

if the industry can snap A third down month in a row

could put pressure on Detroit auto-makers to order more lay-offs

and production cuts. Simon Derrick, chief markets

strategist at the Bank Nice to see you. All this data from

China, two differing pictures depending on which bit you choose to

go with. And I think the weakening economy story is the central one

here, the latest manufacturing numbers confirm that. Over the

course of the last month or so the Chinese markets have been reacting

very negatively to this, you had seen the equity markets down, Moody

's downgraded China last week. Over the last few days, something curious

has happened, there has been talked about some of the big state banks in

China, some talk about the national team stepping in to support the

equity markets, equities are up, and it feels as though what we are

seeing is an attempt to support markets, an attempt to reconfirm

that they are there to provide stability. Whether that is possible

in the long-term, given the fact that we have this underlying

weakness and underlying concerns in the Chinese market, tough to say,

but clear that the authorities want to try and provide support. Let's

talk about the Fed briefly as well because we also talked about what

happens next and it is interesting if you look at what Trump has been

doing, there was all of that excitement which has faded away and

it is whether they can put a floor under this. Yes, fairly anodyne

reports on the US economy did not sound full throated. The question is

now, are we going to have a second rate hike before the end of the

year? Given what we have heard from the Fed, it suggests maybe it is

open to question. If that is true, we may be talking about that. There

has been talk about it being a done deal but the markets have got ahead

of themselves? From the perspective of June, guidance is so clear it is

hard to argue anything else. The December rate hike, maybe the market

has got ahead of itself although governors have been given that

guidance and I think they will back of it a little bit. Good to see you,

I know you will talk us through some stories later including the climate

change issue that is on everyone's agenda at the moment, whether Trump

and the US will ditch it, so we will talk about that later.

Still to come, mapping out the world, three words at a time. We

will meet the firm that says it can pinpoint anywhere in the world with

just three words. The man behind it is here to explain how it works.

You are with Business Live from BBC News.

We are going to talk house prices. They continued to slow in May,

according to the nationwide. It is the third month in a row that prices

have cooled. Overall prices are rising at 2.1%, the slowest rate of

growth in four years. Robert Gardner is Nationwide's chief

economist and he joins us now. Last time I think I spoke to

somebody about house prices, they said you can't be too much into

month by month. Is this now a trend? If you look at the annual house

prices, things have soft and a little. I would emphasise it is

probably a little bit at this stage. If you look at the annual rate of

house price growth in recent years, it has largely been confined to a

three to 6% band. We have just moved outside that. Only a little below.

Robert, we should discuss the election. All sorts of issues on the

table as we approach the vote next week. Housing is clearly a big issue

for people trying to get on the ladder, but also for people on it.

Your assessment? The key thing is the supply side. If you look at the

stock of homes on the market, it is still close to a 30 year low. In the

last few years we have seen the number of homes being built

consistently lagging behind increasing population. Whoever wins

the election, a key focus has to be how to increase supply on a

sustainable basis. Up or down next? What happens next? We think the

economy will probably slow a little as the squeeze on household budgets

intensifies. There is support for a house prices from low interest rates

and the lack of supply. Overall house price growth will probably

around 2% and activity a little bit weaker from where we are at the

moment. Thank you. Robert Gardner. You can read more about that on the

business life page. Lloyds Banking Group saying it has completed the

acquisition of MBNA, the credit card business. That gives them a share of

26%. Full details on the website. You're watching Business Live -

our top story... Can the EU and China create their

own alliance, cutting out America? There is a lot of concern of late

about Donald Trump's plans to ditch the Paris climate accord. EU and

Chinese leaders are meeting later looking to deal with worries on

Donald Trump's stance on climate change, and trade.

If you live in a city, town or village, your postal address

is probably something you just take for granted.

But millions of people live in communities so remote

or so un-industrialised, that there simply

That's where our next guest comes in.

He runs an alternative mapping company called what3words.

The aim is pretty ambitious - to completely revolutionise

It aims to do this by splitting the globe into 57 trillion

three metre squares, each described by a unique

It's already been taken up by postal services in five countries,

including Mongolia, Djibouti and Ivory Coast.

Emergency services around the world are ALSO using

the system to pinpoint people with no addresses.

Chris Sheldrick, is the founder and boss of what3words

Welcome to the programme. We sort of rent through how it works. You can

probably do a better job at! It all rests on three little words to map

out a small area that is unique to that footprint. I was looking on it

earlier. Depending on where we are in this building... How does it

work? It is a global address system. The idea is to make a fast, simpler

alternative to GPS coordinates, the only other thing available

everywhere. Nobody wants to remember an eight digit Longitude Prize Macca

latitude. We have divided the world into three metre squares. There are

enough combinations of three words. You can go around the world and name

everywhere with something simple. Out there in English? We do this in

14 languages. It means if you live in a country where there just is no

real address system you can use, what will you put when you order

something online? When you call emergency services? You look up your

three word address and you can use it for any of these things. How do

you make money? The what3words app is free. We licensed businesses.

Courier companies, postal services, navigation apps, car companies,

anybody who wants to use three word addresses in bulk to improve their

efficiency, we charge them a licence fee. UPS say that for each mile they

get lost every day, that costs their business 15 billion -- $15 million a

year. If companies can benefit, that is who we charge a licence fee too.

Who would use it? In many developing countries it is vital because there

are some honey parts that don't have an address system. It is also

relevant in developed places. I lived in Dubai for a long time.

Struggling with an address system. I would describe my address to the

postman. That was how people found you. I can see the use it there.

That is exactly it. There are also That is exactly it. There are also

some places you don't think would have a problem. In London, if people

come to our office, you put the postcode in and it takes you to the

40 flyover. People call and say, I can see you down there. If you think

about where we are going with cars which may not have steering wheels,

it is kind of OK, you go, it's a little bit inaccurate but I will

We should have a way to reference We should have a way to reference

anywhere very precisely. No delivery driver should be getting lost trying

to find your business. People are losing so much time and money over

the developed world with this problem that could be so easily

fixed. That is why is three metre square. It is very precise?

Absolutely. We wanted to make squares as small as possible but

make sure we didn't run out of words. How did you get into this?

How did you get started? I used to work on the live music business.

Every day I had to get people to somewhere new in the world, whether

at Wembley or an Italian mountainside. Everybody used to go,

I'm lost! GPS coordinates were a total no-go. I thought, if I can

make this so easy that anybody from a child to a grandparent to a

musician can use this, this would be globally valuable. Thank you for

talking's through it. Really fascinating. Best of luck

with it. That's the tarmac of an airport

in Sri Lanka, which has been dubbed the world's emptiest International

Airport. It cost about $1 billion to build,

funded by loans from China. Our team went there,

to Mattala Rajapaksa This is Sri Lanka's second

International Airport after Colombo. It is in the south of the country

not a whole lot going on here. Let's not a whole lot going on here. Let's

take a look. Flybe is the only airline that

operates. How many passengers do you think? Actually per day we can say

about 50 to seven Beast -- 75% depart from this airport.

What other business stories has the media been

Simon Derrick, Chief Markets Strategist, Bank

of New York Mellon - is joining us again to discuss.

Simon, we have been talking about this climate change change of heart

by Donald Trump. I suppose it was always saying all along... I think

the first thing is, he has always been in there all the way through

his campaign and onwards. That doesn't mean we are going to go

through with this. There have been campaign pledges not carried out.

Remember backing off on China and currency manipulation? It is not

certain he will say something this afternoon. But it looks likely.

There is definite opposition within the White House. We know Rex

Tillerson has obviously got concerns. Ivanka Trump has made

comments as well. What impact does this have on markets? Interesting on

the day that Exxon tells us the -- they need to be more transparent and

look at how climate change affects business. The

there are some easy things that can happen for markets. Maybe it is an

old energy, new energy thing. I think the markets will focus on

isolationism. Is that the real story? Is the US moving towards

that? If it moves towards this idea of the EU and China, is that a

pro-Euro story? That might be interesting. Thank you. Have a good

weekend. Good morning. Today marks the start

of meteorological