:00:00. > :00:07.This is Business Live from BBC News with Alice Baxter and Ben Bland.
:00:08. > :00:14.that's the message from the EU and Japan as they close
:00:15. > :00:37.Live from London, that's our top story on Thursday 6th July.
:00:38. > :00:41.The deal's on - Japan and the EU will today sign a free trade deal
:00:42. > :00:47.Could this be the beginning of a new economic power couple?
:00:48. > :00:49.Also in the programme, slicing off a thinner profit -
:00:50. > :00:52.the owner of Pizza Hut, KFC, and Taco Bell in China
:00:53. > :01:02.posts lacklustre results in the first quarter.
:01:03. > :01:10.And we have the latest from the markets and European
:01:11. > :01:14.have opened steady after a fairly downbeat session in Asia.
:01:15. > :01:16.And we'll be getting the inside track on Alipay,
:01:17. > :01:19.the Chinese digital payment giant owned by ecommerce giant Alibaba.
:01:20. > :01:23.And as Jay-Z's digital-only album goes platinum in under
:01:24. > :01:25.a week we want to know, what was the last physical
:01:26. > :01:45.In a few hours' time, the EU and Japan will sign off on a major
:01:46. > :01:50.trade deal in Brussels - covering everything
:01:51. > :01:54.It comes despite doubts around the world about free trade deals
:01:55. > :01:57.and the rise of trade protectionism in the US under the
:01:58. > :02:05.Japan and the EU account for about a third of global GDP -
:02:06. > :02:11.Both sides believe their trade relationship has room
:02:12. > :02:17.EU officials say the deal will boost the EU economy by 0.8% and Japan's
:02:18. > :02:26.Among the big winners, the car industry.
:02:27. > :02:33.The EU will scrap a 10% duty on Japanese car imports,
:02:34. > :02:39.while Japan will remove barriers to entry for European automakers.
:02:40. > :02:42.The deal's also very symbolic, partly because of Brexit -
:02:43. > :02:45.European leaders want to reinforce the value of the EU
:02:46. > :02:52.Meanwhile, Prime Minister Shinzo Abe of Japan has been looking for a big
:02:53. > :02:54.win on the global stage after President Trump
:02:55. > :02:55.effectively torpedoed the Trans Pacific Partnership
:02:56. > :03:06.Marina Petroleka is head of industry research at BMI Research,
:03:07. > :03:19.So we were hearing some of the numbers involved. Given that the
:03:20. > :03:23.trade between the EU and Japan already accounts for so much, the
:03:24. > :03:29.question is, why have they not done a free-trade deal like this before?
:03:30. > :03:32.All these free trade deals are very comprehensive. They have had 18
:03:33. > :03:39.rounds of negotiations just to get to the point of today worry have
:03:40. > :03:48.high-level political endorsement of the deal. So they do take a long
:03:49. > :03:54.time. We have just talked about or toes and agriculture, but there is a
:03:55. > :03:56.plethora of smaller issues and industries, data protection,
:03:57. > :04:04.everything, the entire spectrum that has to be negotiated. It has taken
:04:05. > :04:10.years to get here. Your take on it is one of the big winners will be
:04:11. > :04:15.the pharmaceutical industry? In our view, a lot of the coverage of this
:04:16. > :04:18.has focused on agriculture and autos because they were the two bargaining
:04:19. > :04:24.chips. But if you look at the numbers, the European pharma
:04:25. > :04:28.industry will be a major winner because it will open to them the
:04:29. > :04:31.Japanese pharmaceutical markets, where you have a major population
:04:32. > :04:36.with a high income. European pharmaceutical markets love that
:04:37. > :04:39.sort of profile for their big blockbuster drugs. So we anticipate
:04:40. > :04:44.there will be a big increase of the European pharmaceutical industry in
:04:45. > :04:50.Japan as a result. Is this a deal that benefits both sides equally?
:04:51. > :04:56.Presumably yes. After 18 rounds of talks, you would think you have a
:04:57. > :05:01.balanced mix. For the EU, the big win is pharma. In our opinion, it
:05:02. > :05:06.will also be the agriculture sector. It is pretty much one-way trade of
:05:07. > :05:12.EU exports to Japan. On the Japanese side, it is the car-makers that will
:05:13. > :05:16.benefit by losing the 10% import tariff, as well as nontariff
:05:17. > :05:18.barriers for auto parts and other parts of the supply chain. Thank
:05:19. > :05:20.you. Let's take a look at some of
:05:21. > :05:24.the other stories making the news... British Airways cabin crew
:05:25. > :05:28.are to stage a further two weeks of strikes,
:05:29. > :05:31.in a long running dispute standing staff, will walk out for 14
:05:32. > :05:46.days on 19th July in a strike The strike will begin
:05:47. > :05:50.three days after the end Rapper Jay-Z's digital-only
:05:51. > :05:53.album 4:44 has gone platinum within five days -
:05:54. > :05:56.despite limits on who The music was only available
:05:57. > :06:01.on Tidal, the star's own streaming service,
:06:02. > :06:03.and to customers of US The Recording Industry Association
:06:04. > :06:08.of America platinum certification, which requires more than 1 million
:06:09. > :06:10.sales, is rare for Last year, KFC and Pizza Hut's US
:06:11. > :06:23.owners Yum Brands spun off the Chinese business
:06:24. > :06:29.into a separate company. In the last few hours,
:06:30. > :06:31.it's reported results Have the Chinese developed
:06:32. > :06:48.a taste for pizza? No, the world's second-largest
:06:49. > :06:55.economy prefers what Colonel Sanders has to offer over pizza. Yum Brands
:06:56. > :07:01.had boosted sales which was driven up by 4% of the KFC chain. But Pizza
:07:02. > :07:07.Hut sales were flat. Yum Brands has been looking to pump up sales in
:07:08. > :07:13.China because of the market, which has started to slow since 2012. It
:07:14. > :07:17.was hit by safety scares, changing consumer tastes and a wider economic
:07:18. > :07:21.slowdown. The food franchise had hoped to heat up sales by
:07:22. > :07:25.simplifying Pizza Hut's menu and making a push on mobile payment and
:07:26. > :07:29.delivery. It seems that it recently bought a controlling stake in the
:07:30. > :07:33.local food delivery service. The disappointing pizza numbers pushed
:07:34. > :07:42.Yum's than a stock price is lower but so far this year, Yum's China
:07:43. > :07:49.shares are up nearly 54%. Most Asian stock markets fell on Thursday after
:07:50. > :07:53.minutes from the Federal Reserve's class meeting showed a lack of
:07:54. > :07:59.consensus on the future pace of US interest rate increases. Oil prices
:08:00. > :08:03.also inched higher following a steep decline yesterday. Tokyo stocks are
:08:04. > :08:06.also falling, with banks leading the decline following the release of
:08:07. > :08:13.those fed minutes. Also a stronger yen. Trading in Asia generally has
:08:14. > :08:21.been buffeted this week by tensions on the Korean peninsula.
:08:22. > :08:24.Markets elsewhere are waiting for the release of some US Jobs
:08:25. > :08:27.for June, which due on Friday - in the hope that will provide some
:08:28. > :08:30.So here in Europe, markets have opened steady.
:08:31. > :08:33.And Michelle Fleury has the details about what's ahead
:08:34. > :08:39.Trade figures are released this Thursday.
:08:40. > :08:42.The latest numbers from the Commerce Department are likely
:08:43. > :08:45.to show that America's trade deficit shrank slightly, to 46.2 billion
:08:46. > :08:56.The billionaire investor picked by Donald Trump to run
:08:57. > :08:57.the Commerce Department is, shall we say, obsessed
:08:58. > :09:02.In the past, he's urged manufacturers, including
:09:03. > :09:04.Japanese car-maker Toyota, to build more plants in the US
:09:05. > :09:07.as part of efforts to reduce the US trade deficit
:09:08. > :09:15.Toyota's new headquarters in Plano, Texas opened
:09:16. > :09:18.The Japanese car-maker is also to invest $10 billion over
:09:19. > :09:29.It's worth noting that's the same as the last five years.
:09:30. > :09:31.And ahead of Friday's monthly jobs report,
:09:32. > :09:33.data on private sector employment will be released.
:09:34. > :09:35.Joining us is James Quinn, Group business editor
:09:36. > :09:53.So, interesting moves on Tesla shares? Tesla shares have fallen 15%
:09:54. > :09:58.since late June, when they hit those heights. Lots of commentary around
:09:59. > :10:08.the market values of the brands Tesla was working with before. Volvo
:10:09. > :10:13.are going all electric from 2019. As opposed to an internal engine. What
:10:14. > :10:17.does this mean for the future of electric cars per se? It was just
:10:18. > :10:21.the domain of Hazlitt for so long, and now there is lots of
:10:22. > :10:26.competition. That's right, Elon Musk was a soothsayer in that respect,
:10:27. > :10:30.investing a lot of money into the business. Tesla only delivered
:10:31. > :10:34.76,000 cars last year. Volvo delivered over half a million cars.
:10:35. > :10:40.So clearly, the big boys are getting involved in this and that takes the
:10:41. > :10:43.sheen off Tesla's approach somewhat. Goldman are downgrading their price
:10:44. > :10:51.on Tesla yesterday. That is meaningless given that Tesla's share
:10:52. > :10:55.price last night was still $327. Looking at market around the world,
:10:56. > :11:02.investors seem to be waiting for this data from the US on jobs which
:11:03. > :11:06.are due out on Friday. But also those mixed messages from the Fed
:11:07. > :11:13.about the pace of future rate rises and when they draw down the balance
:11:14. > :11:17.sheet of the debts they hold? That's right, questions over tapering and
:11:18. > :11:19.whether policy should get looser and interest rates will go up further
:11:20. > :11:22.later in the year. Christine Lagarde, the boss of the
:11:23. > :11:25.International Monetary Fund, one of the big financial organisations
:11:26. > :11:29.around the world, warned yesterday ahead of the G20, which starts
:11:30. > :11:33.today, that the Brits but we have seen will not continue to boost US
:11:34. > :11:38.job figures, which were strong in the start of this year. Will they
:11:39. > :11:41.continue, given that President Trump has something to crow about when all
:11:42. > :11:46.else has been going badly? The US Labour market is still growing
:11:47. > :11:51.strongly. Some would say that was faxed to President Obama and nothing
:11:52. > :11:53.to do with President Trump's rain so far. Some might say! We will take
:11:54. > :11:55.you through the papers later. We'll be getting the inside
:11:56. > :12:02.track on the Chinese You're with Business
:12:03. > :12:17.Live from BBC News. A lot of businesses are worried
:12:18. > :12:21.about where the entrepreneurs Ben Thompson is with a group
:12:22. > :12:37.of young people who might be able Welcome to the South Bank. We are
:12:38. > :12:41.here in central London. 20,000 students have taken part in the
:12:42. > :12:45.Young enterprise scheme, whittled down to just 14 finalists. I am with
:12:46. > :12:50.some of them this morning. Dean, you have been through the whole process.
:12:51. > :13:00.What is it you do? Our product is a simple but effective device. It
:13:01. > :13:08.transforms any shoe into a slip on. How did you come up with this idea?
:13:09. > :13:12.Our schoolteacher's son got trapped on an escalator. And what have you
:13:13. > :13:17.learned from this? Running your own business is harder than it might
:13:18. > :13:22.look. Definitely. My biggest lesson is the importance of customers.
:13:23. > :13:26.Treat them with respect. If you do, they will return it to you. Good
:13:27. > :13:33.luck. I know you have a presentation later. Then the winner will be
:13:34. > :13:37.announced tonight. Ben, you are veteran of this process. You know
:13:38. > :13:40.when own firm. What is the difference between the theory and
:13:41. > :13:46.the reality of doing it here and in the real world? You can easily sit
:13:47. > :13:48.around thinking you will sell millions of these, but the
:13:49. > :13:52.practicality is knowing the things you have to do day in, day out. You
:13:53. > :13:58.can look at the textbook, but it is about actually doing it. This adds
:13:59. > :14:03.the experience of doing it. You will be the master of ceremonies later.
:14:04. > :14:08.What are you looking for? We are looking for the spark. These guys
:14:09. > :14:11.are very early days. They have started to make a profit. We are
:14:12. > :14:16.looking for the companies that want to have an edge over people and look
:14:17. > :14:20.at the longer term. It has struck me how many businesses involved
:14:21. > :14:23.technology. It is really changing how businesses operate. Technology
:14:24. > :14:29.is now a massive thing. Everybody here grew up with it. So now people
:14:30. > :14:33.are trying to utilise it in their business. There are challenges with
:14:34. > :14:38.security and data, but it is also exciting because the opportunities
:14:39. > :14:43.are endless. Best of luck. So as you can see, I have been joined by some
:14:44. > :14:47.of the finalists. A busy day ahead for them. It is only fair that I let
:14:48. > :15:00.them have the last say. Good luck, guys. See you soon. Bye-bye.
:15:01. > :15:07.You are watching business life. The European Union and Japan are gearing
:15:08. > :15:11.up to announce a landmark free trade deal. The two regions have indicated
:15:12. > :15:15.a commitment to open trade, in contrast to a protectionist measure
:15:16. > :15:20.taken by President Trump. Let's bring you a quick recap on how the
:15:21. > :15:28.markets are doing. In Europe, following a downbeat session over in
:15:29. > :15:31.Asia, the European markets are also down. In London, it is flat.
:15:32. > :15:35.And now let's get the inside track on online payments.
:15:36. > :15:37.Alipay is the world's biggest third party on line
:15:38. > :15:40.It was originally part of the Alibaba stable,
:15:41. > :15:49.and allows third party payments for millions of Chinese consumers.
:15:50. > :15:51.It's the most popular payment app in China -
:15:52. > :15:54.and its trying to push out into the rest of the world
:15:55. > :16:00.Joining us now is Rita Liu, Europe Middle East and Africa
:16:01. > :16:14.Many thanks for joining us in the studio. Good morning. I was just
:16:15. > :16:22.going to ask you about the genesis of Alipay. It is somewhat
:16:23. > :16:31.controversial, it was spun off from Alibaba in 2014. At the time, there
:16:32. > :16:37.was a big uproar from Yahoo, a major shareholder in Alibaba? Yes, that is
:16:38. > :16:47.what happened. It was driven by the regulation requirement in China,
:16:48. > :16:50.third-party payment providers. Just looking at where your focus is now,
:16:51. > :16:57.we are talking about the expansion to new markets. You are still only
:16:58. > :17:01.targeting Chinese consumers who are travelling abroad. Why not target
:17:02. > :17:09.consumers from wherever they come from? Actually, I get that question
:17:10. > :17:12.every day. At the moment, in this region of Europe, we are focusing on
:17:13. > :17:19.the cross-border opportunities. You know, bringing 450 million users
:17:20. > :17:22.from China to spend in Europe and help them have the same experience
:17:23. > :17:27.they have in China when they are travelling in Europe. But we are
:17:28. > :17:35.trying to expand our user base from China to the rest of the world. Now,
:17:36. > :17:37.the focus is now more on Asia. As you know, we made several
:17:38. > :17:46.investments into several countries in Asia last year. That is part of
:17:47. > :17:51.our effort to expand our user base by empowering our partners in those
:17:52. > :17:56.markets without technology and know-how, building in China and
:17:57. > :18:01.hopefully growing another Alipay in that market. Given the expansion
:18:02. > :18:04.hopes and ambitions you have, I'm interested to know what you make of
:18:05. > :18:09.Donald Trump's approach, the more protectionist approach and some of
:18:10. > :18:16.the Commons that he has made, particularly about China? Actually,
:18:17. > :18:20.you know, the meeting with him several months ago, Alibaba
:18:21. > :18:26.promising 1 million job opportunities in the US. We were
:18:27. > :18:33.just in Detroit last week, promoting our services to the SMEs in the US,
:18:34. > :18:43.helping them to engage better with rising costs in China. I think that
:18:44. > :18:47.is our answer to that. We definitely try to... We definitely hope that
:18:48. > :18:56.the cross-border trade in China and the US will prosper. You know, in
:18:57. > :19:02.years to come? Do you feel that you need to explain your strategy to the
:19:03. > :19:07.US consumer in any way? Well, it's always complicated to explain
:19:08. > :19:19.Alipay. We do so many things in China. Again, our vision is to drive
:19:20. > :19:25.financial inclusion by technology. The first stuff we are taking in
:19:26. > :19:27.Europe is to service and merchants here. It is the best way to educate
:19:28. > :19:35.the market for Alipay is really about. It is not just a payment
:19:36. > :19:38.option, it is a login platform for the merchants. It takes time to
:19:39. > :19:44.educate the market, but we are making efforts. One thing that
:19:45. > :19:51.people who are watching, not just Alipay, but the parent company, they
:19:52. > :19:55.will be wanting to know why the delay over the listing? It has been
:19:56. > :20:00.talked about, much hyped, but it now seems to be pushed back to... We
:20:01. > :20:09.don't know when? It was meant to be the biggest of 2017, wasn't it?
:20:10. > :20:16.Well, I wish I knew more details. It is not our priority now. It is to
:20:17. > :20:22.solve customer issues and expand to more markets. It is not our
:20:23. > :20:26.priority. We are making lots of progress in various markets around
:20:27. > :20:32.the world and that is our priority. It is not to do with needing
:20:33. > :20:41.regulatory approval or approval from Beijing to take the next step? Not
:20:42. > :20:44.that I know of. We will continue to watch with interest. It has been
:20:45. > :20:47.much talked about and much hyped. I am sure we will be covering this
:20:48. > :20:48.again in future. Thank you for coming in.
:20:49. > :20:52.In a moment we'll take a look through the Business Pages but first
:20:53. > :20:58.here's a quick reminder of how to get in touch with us.
:20:59. > :21:03.The business life pages where you can stay ahead with the business
:21:04. > :21:07.news. We will keep you up-to-date with the latest details, with
:21:08. > :21:11.insight and analysis from the team of editors right around the world.
:21:12. > :21:22.We want to hear from you as well. Get involved on the BBC web page. On
:21:23. > :21:27.Twitter, we are on BBC business and you can find us on Facebook.
:21:28. > :21:39.Business Live, on TV and online, whenever you need to know. Let's
:21:40. > :21:42.look at some of the stories the papers have been looking at. We are
:21:43. > :21:45.going to start with the China morning Post. They say that Richard
:21:46. > :21:51.Branson's feeling is that he might cut his investment the UK if Brexit
:21:52. > :21:54.goes ahead, which we assume it will, because he thinks the country is
:21:55. > :21:58.harming itself and it doesn't make sense for him to put money into it?
:21:59. > :22:07.That is what he said on a flight from Hong Kong to Melbourne, Virgin
:22:08. > :22:12.Australia launching flights today. He was an ardent Remainer, you might
:22:13. > :22:15.say that he would say that. What is interesting in the language he uses
:22:16. > :22:19.is that in the last couple of days, business people have returned to
:22:20. > :22:22.this debate ahead of the meeting tomorrow, where the Chancellor,
:22:23. > :22:28.Philip Hammond, and other ministers will meet business leaders en masse
:22:29. > :22:32.for the first time since last year's Brexit rope. There seems to be a
:22:33. > :22:37.softening on the Government's stands, a willingness to discuss.
:22:38. > :22:42.The question over whether or not he will cut investment seemed wide of
:22:43. > :22:46.the mark. But these comments, from somebody that is a British
:22:47. > :22:50.businessman, will attract a lot of criticism from some quarters. I'm
:22:51. > :22:55.thinking the readers of your paper? That's right, the suggestion he will
:22:56. > :22:59.cut services out of Heathrow, Virgin Atlantic, they have been increasing
:23:00. > :23:02.services recently and launched flights to Seattle from Manchester,
:23:03. > :23:08.to Chicago and other places. Clearly, the owner of Virgin Trains,
:23:09. > :23:12.lots of investment in health care, I think it is talk for a foreign
:23:13. > :23:15.audience. He made the comment on a flight from Hong Kong to Melbourne,
:23:16. > :23:19.maybe he would not make those two others. Maybe he would.
:23:20. > :23:26.Let's move to the next story. I want to ask you a couple of questions
:23:27. > :23:31.that we posed to viewers this morning in light of the
:23:32. > :23:36.record-setting sales set by Jay-Z for the release of his latest album.
:23:37. > :23:41.We asked, what was the last physical record that they bought? I had a
:23:42. > :23:50.number of responses, Felicity said Purple Rain from Prints. Carolyn
:23:51. > :23:59.says Strips by Christina Aguilera. A reissue of Abbey Road. Another says
:24:00. > :24:04.They Might Be Giants. Mark says it must be 20 years since I bought an
:24:05. > :24:09.LP. Calling it an LP as well? Oh, dear. What was the last one you
:24:10. > :24:14.bought? In terms of an actual record, I think there was only ever
:24:15. > :24:22.one, when I was very young, Billy Jones's Uptown Girl. Then straight
:24:23. > :24:28.onto tapes and then CD's. I can't even think. I'm too embarrassed to
:24:29. > :24:31.admit! I would lose credibility. We have all moved on, as has
:24:32. > :24:35.technology. That brings me nicely into the next story from the
:24:36. > :24:42.Financial Times. Talking about drones. Zeroing in on increasing
:24:43. > :24:47.numbers of commercial opportunities. Is there anywhere now that they are
:24:48. > :24:52.not going? Everybody is trying to test the abilities of drones to see
:24:53. > :24:56.how they can be used in business, commerce, to reduce the cost of
:24:57. > :24:59.sales. Amazon is a great example of a company testing ground delivery.
:25:00. > :25:04.In Cambridge, they have a license to see whether they could deliver
:25:05. > :25:08.parcels. It wouldn't work in built up an urban areas, but in suburban
:25:09. > :25:12.areas coming to back gardens, that could be one possibility. I think
:25:13. > :25:17.the possibilities are endless. The practicalities are somewhat
:25:18. > :25:21.different. Its safety, isn't it? These are fairly heavy things,
:25:22. > :25:26.flying above peoples heads. There was a risk involved. That's right,
:25:27. > :25:30.go pro launched a probe with a camera attached and it was falling
:25:31. > :25:33.off, so they had to recall them. That is not something any company
:25:34. > :25:38.wants to be involved in. Safety issues and also the impact with
:25:39. > :25:42.aviation. You don't want to be a drone operator that crushes your
:25:43. > :25:49.drone into a helicopter or plane. We are at risk of droning on. Not you!
:25:50. > :25:54.That all we got time for. We will see you tomorrow. Thanks for
:25:55. > :25:56.watching.