03/07/2017 BBC Business Live


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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


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