03/07/2017 BBC Business Live

This is Business Live from BBC News with Jamie Robertson

Trading on an established relationship - as diplomatic

allegiances shift around the world China and Russia look to each other

Live from London, that's our top story on Monday 3rd July.

Today Xi Jinping is in Moscow to meet the Russian

Trade is set to be top of the agenda as China looks to push its vision

Would you buy a smartphone that had parts taken

We're going to have the latest on Samsung's move to salvage

Galaxy Note 7 parts for a new device.

And China is opening up its $9 trillion bond market

to foreign investors - we have the latest

from the markets on how they are reacting to that news.

And we'll be getting the inside track on augmented reality -

after the failure of Google glass could the future of the technology

Elsewhere, as tents go up outside Wimbledon with tennis fans desperate

to get their hands on tickets, we want to know -

what would you queue through the night for?

Chinese President Xi Jinping is in Russia for talks

with his counterpart Vladimir Putin today.

Trade is set to be top of the agenda ahead of the G20 meeting of global

The visit will be Xi's sixth tour to Russia

And their meetings seem to be bearing fruit -

according to China, trade between the two increased by over

26% in the first four months of the year, reaching nearly

Russia will be a key component of China's 'Belt

and Road' initiative - an ambitious multi-trillion dollar

project that will link Europe and Asia via the historic silk

As part of the project - and as a symbol of this

close relationship - Beijing has even agreed to help

finance a high speed rail link within Russia itself: linking Moscow

Joining me now is Dr Yu Jie, Head of China Foresight, at LSE Ideas.

thank you for coming in to Doctor us. This is a charm offensive that

just keeps going, because we have seen six of these meetings already,

and not just Russia, but China forging links all around the world,

to boost its profile, not just economically but politically? That

is exactly what China are trying to do, by using China's economic

muscles and trying to extend the spheres of political influence over

the world. As you just mentioned, the road, including not just rush

about 68 member states allowed to join the initiative and Russia is

obviously Big E member. If Xi Jinping would like success on this

initiative -- obviously the biggest member. Why is the initiative called

the belt and roared initiative? The new Selt Road, the economic belt,

and the road, which is the new economic silk, so there is a land

route going through Central Asia, and end point would be Venice, in

Italy. Looking at the map, Russia does not have to be part of this,

does it? The entire route could actually go south of Russia. How

important really is Russia in this relationship, regarding the root?

Not exactly economically, but I think it is more geopolitically that

Russia is vital, to have Russian support in this case. Russia,

obviously the backyard is Central Asia, or it used to be, but now

would like to win the hearts and minds -- now Xi Jinping would like

to win the hearts and minds. And it is essential for him, for himself.

Politically, is this a kind of centring of powers as a hedge

against the powers, the partnership between the USA and Europe, a kind

of China and Russia relationship? I wouldn't say it is hedging

necessarily. I think it is partially because the diplomatic language.

When the rest speak of Russia it tends to be much harsher, whereas

the Chinese offers more toned down language towards Russia is what

China is trying to do is gather more and more powers and a balance

towards the United States. Doctor Yu Jie, who do you think is in the

driving seat in this relationship? It depends on what you look at.

Certainly economically China is the driving seat here, but I think in

the political sphere both China and Russia play an equal part. Doctor Yu

Jie, thank you very much for speaking to us. Doctor Yu Jie from

LSE Ideas. Let's take a look at some of the other news stories today.

China has for the first time given foreign investors access

to its bond market - a $9 trillion trading

system which is the third largest in the world.

The scheme, which offers investors access via Hong Kong,

got off to a busy start, with nearly $300 million'

worth of bonds purchased in the first 20 minutes of trading.

Iran says the French energy giant, Total, is to sign a contract worth

almost $5 billion to develop an offshore gas field.

It's Iran's biggest foreign deal since most economic

sanctions against the country were lifted last year.

Total said it had planned to sign the contract several months ago,

but had decided to wait and see if the Trump administration would

India introduced a landmark reform to its tax system over the weekend.

The "Goods and Services Tax" replaces hundreds of individual

state-based levies, and is expected to transform the nation

of 1.2 billion people and its $2 trillion economy

Looking at some of the stories in newspapers... Japan's second biggest

bank is setting up a new branch to ensure it can continue offering

disruption to clients with no disruption was the UK leave the EU.

And the bank said it would expand its office in London to achieve

greater flexibility. So putting a foot in both camps. Samsung is to

salvage parts from its catastrophic to make a new phone for the South

Korean market. Leisha Santorelli is in Singapore. This new phone, will

it inspire confidence if it is made from parts that blew up? Well, just

going on social media it is getting mocked online already, but that is

not the aim of Samsun with the new release. They have brought the

Galaxy Note 7, famous for its exploding batteries, back from the

grave, but in South Korea it is being called the fan edition.

Samsung says 400,000 pieces will hit stores on Friday costing around 610

US dollars, about 30% cheaper than the original As you mentioned it

will be made up of unused parts from the recall to which was axed because

of these faulty batteries. Almost 3 million handsets in total have been

recalled, costing Samsung billions of dollars. It is possible selling

these refurbished phones is one way Samsung is looking to soften the

financial blow. They are also looking to minimise the

environmental impact of that big recall, so instead of throwing the

phones away they will reuse parts of it. Most importantly for consumers,

I think they are looking to see that this new phone will have a safer

battery. Samsung says it does and that the battery will be smaller as

well, so we will just have to see what the demand is when it goes on

sale on Friday. Leisha, thanks very much for that. Let's have a look at

the markets. This is the Asian market overnight. Although deemed

reasonably positive. The Hang Seng and the Dow numbers here. The Nikki

is up one tenth, and a similar amount up here in the trading

system. The Nikkei up largely on the back of reasonably good economic

figures out of Japan, but looking forward to the week ahead, Michelle

has the details about Wall Street's future. Americans celebrate

Independence Day on Tuesday, so while the US markets may be open for

a shortened trading session this Monday, or will they be choosing to

stay on? Plenty of economic data to digester for those heading into the

office. Early estimates on car figures suggest an annual rate of

16.6 million vehicles sold. Given if there is an important element of

consumer spending, investors will look at the details for any evidence

the US economy may be running out of steam. For a snapshot of the

manufacturing sector, the Institute for Supply Management has released

its figures for June. It is expected to have increased to a reading of

55.1 from 54.9 in May. That was Michelle in New York where the --

well the European markets have opened half a percent up. Kathleen

Brooks from City Index is here. We will talk about more normal market

at the minute but first let's talk about is opening up of the bond

market in China. How significant is this? Certainly it is a step towards

financial normalisation, I suppose. China's bond markets or trillion. It

is no small chunk of change -- they are multitrillion. It is interesting

because some fund managers that might hold off, the Met control our

pension funds, for example, and they could start investing in bonds in

China for the first time. Haven't they been a bit worried about debt

in China for the last year and so? A good point. This concern about the

debt bubble. However opening things up to the debt markets can sometimes

allow more scrutiny. Fund managers have strong vetting process in place

before they invest. So companies that are not perhaps selling the

best kind of debt, supply and demand will mean people will not buy it.

Let's talk about what has been happening today. We have seen

European markets rise slightly. The financial is not doing too badly at

the moment, but we also have today four former Barclays executives in

court. Do you think this will have any impact on share prices in the

medium to longer term for Barclays, for example? We don't think so,

certainly not of the share price. Barclays have suffered in other

ways, for example, their book value, how much essentially investors want

to own Barclays. And there is a big discount to that, so people are

saying, they are kind of... They have been avoiding Barclays during

this whole process but forgetting to court stage is almost the last steps

we would expect some financials to do quite well now including Barclays

and actually for them to ignore the actual outcome. We have had a lot of

scrutiny, this case has been building up for over five years, so

now the horse has bolted, if you. Potentially if there is no other

regulatory concerns in the way... We have seen the regulatory glare

turned more towards tech than financials which could be good news

for financials down the line. Kathleen Brooks, as usual, thanks

very much for that update on the markets. Thank you. Still to come...

Science fiction becoming science fact. We will be looking at how

augmented reality could be coming to a business near you in the not too

distant future, if it is not there already. You watching business Live

from BBC News. Boris Johnson has become the latest senior Cabinet

minister to put the Chancellor and the -- to put pressure on the

Chancellor and Prime Minister to end the public sector pay cap. Sources

close to the Foreign Secretary made it clear that he wants better pay

for public service workers. Theo Leggett is in our business newsroom

- what's the row about? Policy introduced when George Osborne was

Chancellor and maintained under Philip Hammond has been to keep the

cap on public sector pay, part of the austerity measures designed to

reduce the budget deficit, reduce spending. Since 2012 annual rises in

public sector pay have effectively been capped at 1% for millions of

workers. For that there was a pay freeze as well. The problem is no we

are in an era of rising inflation, at 2.9% at the moment, -- now we are

in an era of rising inflation. In the wake of the election result, the

Government is pretty well aware this is an unpopular policy, and so we

have this line up of senior ministers, Michael Gove, Jeremy

Hunt, Boris Johnson, or suggesting now is the time to relax this policy

and let public sector workers have a little more. If they manage to do

that, it is more pay for everybody, how can they afford it? Everything

has a price, doesn't it? The options are you could increase taxes, and

that is one way potentially of increasing revenue, but there are

problems with that. If tax rises are two great it can dampen economic

growth and you end up taking in less tax than you started with. It is

also politically quite unpopular. The Government could borrow more and

finance its spending that way, but that goes against a flagship

Conservative Party policy which is to reduce the budget deficit,

Ridgers overspending. So that is a couple of ways, or it could just cut

back on other Government programmes. We are talking about a very

significant amount of money here. The Institute for Physical Studies

is lose the figures that were, the political price, and again people

don't like to see cuts. Theo, thank you very much

Our top story; Chinese President Xi Jinping is in Russia for talks

Trade is set to be top of the agenda ahead of the G20 meeting of global

The Conservative manifesto was absent

A quick look at how markets are faring.

Now let's get the Inside Track on augmented reality; it's growing

technology where computer-generated images can be superimposed

Some estimates say the industry could be worth around

Our next guest DAQRI has been using this technology in industrial

settings like oil rigs, water treatment plants

Users wear a special helmet that allows them to view a piece

of machinery such as an oil pipe which has an engineering diagram

with us here is Brian Mullins, founder and CEO of DAQRI.

You have brought the helmet and smart glasses with you. We should

try them on. Unfortunately, we haven't got the software so we can't

show you what the image looks like but we can show you what we look

like! There we are. The whole idea is

there. My head is too big. I tried on the glasses earlier and I

couldn't get them on at all! There we go, look. Is it meant to go up

like that? Yes. Many various diagrams will arrive in front of

your eyes? Yes, that is right. You can take them to work with you and

you can see really complicated instructions boiled down in front of

you in 3D and it can help you learn faster and remain more. One of the

most interesting things about augmented reality, although it talks

a lot today about the context of consumers in enterprise, it's

already here today. So what applications are you using it for at

the moment, which companies are you working with and how is it being

used? Customers are using it in the field today to service very complex

and expensive equipment like gas turbines and power plants, wind

turbines and energy. Places where workers have to go out in the field

and have to know how to understand and service and keep running very

complex equipment. How much does this thing cost that I couldn't get

on to my head? So the prices are usually part of larger package with

channel partners. You could expect to pay list price of $10,000 and

that allows a worker though to do more in those environments than they

could possibly do before. In fact, the economics often pay for

themselves very quickly when an expert in Austria no longer has to

get on a plane, two to Brazil and service a piece of equipment. What

interests me about this is, you buy the kit and software, but are there

then ongoing costs as you keep the programme going on, and I assume

that's what could be good for you? Part of our business model is

helping customers to do what they do better. We have worked with

companies like Siemens and case studies we have done together shows

drastic reductions in the time it takes for workers to learn

activities that may have taken four or five hours to learn in the past

can be done in less than 40 minutes. So you know that? We have a study

that we published with multiple workers specifically in the context

of a power plan. Other companies and universities like Iowa state have

published independent research that shows that workers can learn faster,

retain more and reduce the time it takes to learn by over 90% and...

90%? That's right. And have a significant impact on the way that

workers can move throughout their career. It's a very competitive

market place isn't it. You have Google and other big tech firms

launching all of their own brands. Won't you get swallowed up? It's a

competitive space. We see augmented reality is not a one-size-fits-all

application. A loft what we do, whether in a helmet or in your

glasses, is about helping AR to adapt to the business needs of

customers. One of our fastest growing applications is augmented

reality for automobiles where our partnership with Jaguar Land Rover

has our technology on the road in hundreds of thousands of vehicles

today. That's probably where consumers will see augmented reality

first. Thank you very much indeed. Do you want to try this on? I've

already done that in the green room! They didn't fit me!

Now it's time for the latest in our CEO secrets series.

A lot of successful bosses started out very young, forging businesses

while still in university or high school.

That's right, but the CEO of icoolKids takes things to a whole

new level.Jenk Oz is just 12 years old but he first came up

with the idea when he was, wait for it, just eight.

The most important thing is to form what I call an idea board of

directors. This is about five to six people who have varying different

backgrounds and different life experiences. They have to be great

listeners, completely impartial. I think you should always have someone

who is adult and always have at least one person who is a bitter

younger than you and help you expand on your ideas that you already have

and having someone to tell you who is good and could possibly go wrong.

You keep going with your ideas. Social media - likes don't matter,

followers don't matter. Keep going and engage with your community.

The BBC's Dominic O'Connell is with us.

Let us start with this story about Saudi's oil company. The story is

not about what it says on the tin. Everyone knows they do chemicals.

Saudi is looking at floating on the western stock exchange. Probably

right here in London with a two trillion dollar estimation, but it

probably won't be anything like that. The reason this story is

appearing is to show that it's not just oil, it makes other chemicals.

It's about driving up their valuation ahead of the pricing. Let

us move on to what our next stories are. It's about floating of

valuations, a huge one penneltially on the cards for Deliveroo. It's

been a unicorn, it's a term for normally an online company that

doesn't make any money but which is valued at more than a billion

dollars by investors. If they are doing a funding round, you work out

how much the total company is worth. This latest funding is around 1.5

billion dollars. That is a number people just make up isn't it?

Unicorns are also, when they stop being unicorns, they're uni-corpses.

This business model and working in this economy... It's another example

of an economy which says all its riders ride with their big boxes on

their backs, most young kids riding for a few hours a day, they are not

all employed by Deliveroo, they're self-employed and don't have any

rights which is a bone of contention for all these types of economies.

Are you thinking of queueing up for Wimbledon? I can't think of anything

that I would line up for. You had a good idea? I would queue through the

night to buy a house but Joey tweeted to say he'd queue through

the night for a ticket to see that Don that that. Matt says -- Madonna.

Matt says Bruce Springsteen for a ticket at the front row.

This happens year after year at Wimbledon. If you two to Wimbledon,

normally you walk past the queue in the park and it's not just a small

queue, this is a queue that goes on, 600, 700 metres, even more. The

pictures are like Glastonbury actually. Camping. A very smart

Glastonbury. Fantastic. Dominic, Good morning. We started off July on

a decent note across most