06/07/2017 BBC Business Live

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

that's the message from the EU and Japan as they close

Live from London, that's our top story on Thursday 6th July.

The deal's on - Japan and the EU will today sign a free trade deal

Could this be the beginning of a new economic power couple?

Also in the programme, slicing off a thinner profit -

the owner of Pizza Hut, KFC, and Taco Bell in China

posts lacklustre results in the first quarter.

And we have the latest from the markets and European

have opened steady after a fairly downbeat session in Asia.

And we'll be getting the inside track on Alipay,

the Chinese digital payment giant owned by ecommerce giant Alibaba.

And as Jay-Z's digital-only album goes platinum in under

a week we want to know, what was the last physical

In a few hours' time, the EU and Japan will sign off on a major

trade deal in Brussels - covering everything

It comes despite doubts around the world about free trade deals

and the rise of trade protectionism in the US under the

Japan and the EU account for about a third of global GDP -

Both sides believe their trade relationship has room

EU officials say the deal will boost the EU economy by 0.8% and Japan's

Among the big winners, the car industry.

The EU will scrap a 10% duty on Japanese car imports,

while Japan will remove barriers to entry for European automakers.

The deal's also very symbolic, partly because of Brexit -

European leaders want to reinforce the value of the EU

Meanwhile, Prime Minister Shinzo Abe of Japan has been looking for a big

win on the global stage after President Trump

effectively torpedoed the Trans Pacific Partnership

Marina Petroleka is head of industry research at BMI Research,

So we were hearing some of the numbers involved. Given that the

trade between the EU and Japan already accounts for so much, the

question is, why have they not done a free-trade deal like this before?

All these free trade deals are very comprehensive. They have had 18

rounds of negotiations just to get to the point of today worry have

high-level political endorsement of the deal. So they do take a long

time. We have just talked about or toes and agriculture, but there is a

plethora of smaller issues and industries, data protection,

everything, the entire spectrum that has to be negotiated. It has taken

years to get here. Your take on it is one of the big winners will be

the pharmaceutical industry? In our view, a lot of the coverage of this

has focused on agriculture and autos because they were the two bargaining

chips. But if you look at the numbers, the European pharma

industry will be a major winner because it will open to them the

Japanese pharmaceutical markets, where you have a major population

with a high income. European pharmaceutical markets love that

sort of profile for their big blockbuster drugs. So we anticipate

there will be a big increase of the European pharmaceutical industry in

Japan as a result. Is this a deal that benefits both sides equally?

Presumably yes. After 18 rounds of talks, you would think you have a

balanced mix. For the EU, the big win is pharma. In our opinion, it

will also be the agriculture sector. It is pretty much one-way trade of

EU exports to Japan. On the Japanese side, it is the car-makers that will

benefit by losing the 10% import tariff, as well as nontariff

barriers for auto parts and other parts of the supply chain. Thank

you. Let's take a look at some of

the other stories making the news... British Airways cabin crew

are to stage a further two weeks of strikes,

in a long running dispute standing staff, will walk out for 14

days on 19th July in a strike The strike will begin

three days after the end Rapper Jay-Z's digital-only

album 4:44 has gone platinum within five days -

despite limits on who The music was only available

on Tidal, the star's own streaming service,

and to customers of US The Recording Industry Association

of America platinum certification, which requires more than 1 million

sales, is rare for Last year, KFC and Pizza Hut's US

owners Yum Brands spun off the Chinese business

into a separate company. In the last few hours,

it's reported results Have the Chinese developed

a taste for pizza? No, the world's second-largest

economy prefers what Colonel Sanders has to offer over pizza. Yum Brands

had boosted sales which was driven up by 4% of the KFC chain. But Pizza

Hut sales were flat. Yum Brands has been looking to pump up sales in

China because of the market, which has started to slow since 2012. It

was hit by safety scares, changing consumer tastes and a wider economic

slowdown. The food franchise had hoped to heat up sales by

simplifying Pizza Hut's menu and making a push on mobile payment and

delivery. It seems that it recently bought a controlling stake in the

local food delivery service. The disappointing pizza numbers pushed

Yum's than a stock price is lower but so far this year, Yum's China

shares are up nearly 54%. Most Asian stock markets fell on Thursday after

minutes from the Federal Reserve's class meeting showed a lack of

consensus on the future pace of US interest rate increases. Oil prices

also inched higher following a steep decline yesterday. Tokyo stocks are

also falling, with banks leading the decline following the release of

those fed minutes. Also a stronger yen. Trading in Asia generally has

been buffeted this week by tensions on the Korean peninsula.

Markets elsewhere are waiting for the release of some US Jobs

for June, which due on Friday - in the hope that will provide some

So here in Europe, markets have opened steady.

And Michelle Fleury has the details about what's ahead

Trade figures are released this Thursday.

The latest numbers from the Commerce Department are likely

to show that America's trade deficit shrank slightly, to 46.2 billion

The billionaire investor picked by Donald Trump to run

the Commerce Department is, shall we say, obsessed

In the past, he's urged manufacturers, including

Japanese car-maker Toyota, to build more plants in the US

as part of efforts to reduce the US trade deficit

Toyota's new headquarters in Plano, Texas opened

The Japanese car-maker is also to invest $10 billion over

It's worth noting that's the same as the last five years.

And ahead of Friday's monthly jobs report,

data on private sector employment will be released.

Joining us is James Quinn, Group business editor

So, interesting moves on Tesla shares? Tesla shares have fallen 15%

since late June, when they hit those heights. Lots of commentary around

the market values of the brands Tesla was working with before. Volvo

are going all electric from 2019. As opposed to an internal engine. What

does this mean for the future of electric cars per se? It was just

the domain of Hazlitt for so long, and now there is lots of

competition. That's right, Elon Musk was a soothsayer in that respect,

investing a lot of money into the business. Tesla only delivered

76,000 cars last year. Volvo delivered over half a million cars.

So clearly, the big boys are getting involved in this and that takes the

sheen off Tesla's approach somewhat. Goldman are downgrading their price

on Tesla yesterday. That is meaningless given that Tesla's share

price last night was still $327. Looking at market around the world,

investors seem to be waiting for this data from the US on jobs which

are due out on Friday. But also those mixed messages from the Fed

about the pace of future rate rises and when they draw down the balance

sheet of the debts they hold? That's right, questions over tapering and

whether policy should get looser and interest rates will go up further

later in the year. Christine Lagarde, the boss of the

International Monetary Fund, one of the big financial organisations

around the world, warned yesterday ahead of the G20, which starts

today, that the Brits but we have seen will not continue to boost US

job figures, which were strong in the start of this year. Will they

continue, given that President Trump has something to crow about when all

else has been going badly? The US Labour market is still growing

strongly. Some would say that was faxed to President Obama and nothing

to do with President Trump's rain so far. Some might say! We will take

you through the papers later. We'll be getting the inside

track on the Chinese You're with Business

Live from BBC News. A lot of businesses are worried

about where the entrepreneurs Ben Thompson is with a group

of young people who might be able Welcome to the South Bank. We are

here in central London. 20,000 students have taken part in the

Young enterprise scheme, whittled down to just 14 finalists. I am with

some of them this morning. Dean, you have been through the whole process.

What is it you do? Our product is a simple but effective device. It

transforms any shoe into a slip on. How did you come up with this idea?

Our schoolteacher's son got trapped on an escalator. And what have you

learned from this? Running your own business is harder than it might

look. Definitely. My biggest lesson is the importance of customers.

Treat them with respect. If you do, they will return it to you. Good

luck. I know you have a presentation later. Then the winner will be

announced tonight. Ben, you are veteran of this process. You know

when own firm. What is the difference between the theory and

the reality of doing it here and in the real world? You can easily sit

around thinking you will sell millions of these, but the

practicality is knowing the things you have to do day in, day out. You

can look at the textbook, but it is about actually doing it. This adds

the experience of doing it. You will be the master of ceremonies later.

What are you looking for? We are looking for the spark. These guys

are very early days. They have started to make a profit. We are

looking for the companies that want to have an edge over people and look

at the longer term. It has struck me how many businesses involved

technology. It is really changing how businesses operate. Technology

is now a massive thing. Everybody here grew up with it. So now people

are trying to utilise it in their business. There are challenges with

security and data, but it is also exciting because the opportunities

are endless. Best of luck. So as you can see, I have been joined by some

of the finalists. A busy day ahead for them. It is only fair that I let

them have the last say. Good luck, guys. See you soon. Bye-bye.

You are watching business life. The European Union and Japan are gearing

up to announce a landmark free trade deal. The two regions have indicated

a commitment to open trade, in contrast to a protectionist measure

taken by President Trump. Let's bring you a quick recap on how the

markets are doing. In Europe, following a downbeat session over in

Asia, the European markets are also down. In London, it is flat.

And now let's get the inside track on online payments.

Alipay is the world's biggest third party on line

It was originally part of the Alibaba stable,

and allows third party payments for millions of Chinese consumers.

It's the most popular payment app in China -

and its trying to push out into the rest of the world

Joining us now is Rita Liu, Europe Middle East and Africa

Many thanks for joining us in the studio. Good morning. I was just

going to ask you about the genesis of Alipay. It is somewhat

controversial, it was spun off from Alibaba in 2014. At the time, there

was a big uproar from Yahoo, a major shareholder in Alibaba? Yes, that is

what happened. It was driven by the regulation requirement in China,

third-party payment providers. Just looking at where your focus is now,

we are talking about the expansion to new markets. You are still only

targeting Chinese consumers who are travelling abroad. Why not target

consumers from wherever they come from? Actually, I get that question

every day. At the moment, in this region of Europe, we are focusing on

the cross-border opportunities. You know, bringing 450 million users

from China to spend in Europe and help them have the same experience

they have in China when they are travelling in Europe. But we are

trying to expand our user base from China to the rest of the world. Now,

the focus is now more on Asia. As you know, we made several

investments into several countries in Asia last year. That is part of

our effort to expand our user base by empowering our partners in those

markets without technology and know-how, building in China and

hopefully growing another Alipay in that market. Given the expansion

hopes and ambitions you have, I'm interested to know what you make of

Donald Trump's approach, the more protectionist approach and some of

the Commons that he has made, particularly about China? Actually,

you know, the meeting with him several months ago, Alibaba

promising 1 million job opportunities in the US. We were

just in Detroit last week, promoting our services to the SMEs in the US,

helping them to engage better with rising costs in China. I think that

is our answer to that. We definitely try to... We definitely hope that

the cross-border trade in China and the US will prosper. You know, in

years to come? Do you feel that you need to explain your strategy to the

US consumer in any way? Well, it's always complicated to explain

Alipay. We do so many things in China. Again, our vision is to drive

financial inclusion by technology. The first stuff we are taking in

Europe is to service and merchants here. It is the best way to educate

the market for Alipay is really about. It is not just a payment

option, it is a login platform for the merchants. It takes time to

educate the market, but we are making efforts. One thing that

people who are watching, not just Alipay, but the parent company, they

will be wanting to know why the delay over the listing? It has been

talked about, much hyped, but it now seems to be pushed back to... We

don't know when? It was meant to be the biggest of 2017, wasn't it?

Well, I wish I knew more details. It is not our priority now. It is to

solve customer issues and expand to more markets. It is not our

priority. We are making lots of progress in various markets around

the world and that is our priority. It is not to do with needing

regulatory approval or approval from Beijing to take the next step? Not

that I know of. We will continue to watch with interest. It has been

much talked about and much hyped. I am sure we will be covering this

again in future. Thank you for coming in.

In a moment we'll take a look through the Business Pages but first

here's a quick reminder of how to get in touch with us.

The business life pages where you can stay ahead with the business

news. We will keep you up-to-date with the latest details, with

insight and analysis from the team of editors right around the world.

We want to hear from you as well. Get involved on the BBC web page. On

Twitter, we are on BBC business and you can find us on Facebook.

Business Live, on TV and online, whenever you need to know. Let's

look at some of the stories the papers have been looking at. We are

going to start with the China morning Post. They say that Richard

Branson's feeling is that he might cut his investment the UK if Brexit

goes ahead, which we assume it will, because he thinks the country is

harming itself and it doesn't make sense for him to put money into it?

That is what he said on a flight from Hong Kong to Melbourne, Virgin

Australia launching flights today. He was an ardent Remainer, you might

say that he would say that. What is interesting in the language he uses

is that in the last couple of days, business people have returned to

this debate ahead of the meeting tomorrow, where the Chancellor,

Philip Hammond, and other ministers will meet business leaders en masse

for the first time since last year's Brexit rope. There seems to be a

softening on the Government's stands, a willingness to discuss.

The question over whether or not he will cut investment seemed wide of

the mark. But these comments, from somebody that is a British

businessman, will attract a lot of criticism from some quarters. I'm

thinking the readers of your paper? That's right, the suggestion he will

cut services out of Heathrow, Virgin Atlantic, they have been increasing

services recently and launched flights to Seattle from Manchester,

to Chicago and other places. Clearly, the owner of Virgin Trains,

lots of investment in health care, I think it is talk for a foreign

audience. He made the comment on a flight from Hong Kong to Melbourne,

maybe he would not make those two others. Maybe he would.

Let's move to the next story. I want to ask you a couple of questions

that we posed to viewers this morning in light of the

record-setting sales set by Jay-Z for the release of his latest album.

We asked, what was the last physical record that they bought? I had a

number of responses, Felicity said Purple Rain from Prints. Carolyn

says Strips by Christina Aguilera. A reissue of Abbey Road. Another says

They Might Be Giants. Mark says it must be 20 years since I bought an

LP. Calling it an LP as well? Oh, dear. What was the last one you

bought? In terms of an actual record, I think there was only ever

one, when I was very young, Billy Jones's Uptown Girl. Then straight

onto tapes and then CD's. I can't even think. I'm too embarrassed to

admit! I would lose credibility. We have all moved on, as has

technology. That brings me nicely into the next story from the

Financial Times. Talking about drones. Zeroing in on increasing

numbers of commercial opportunities. Is there anywhere now that they are

not going? Everybody is trying to test the abilities of drones to see

how they can be used in business, commerce, to reduce the cost of

sales. Amazon is a great example of a company testing ground delivery.

In Cambridge, they have a license to see whether they could deliver

parcels. It wouldn't work in built up an urban areas, but in suburban

areas coming to back gardens, that could be one possibility. I think

the possibilities are endless. The practicalities are somewhat

different. Its safety, isn't it? These are fairly heavy things,

flying above peoples heads. There was a risk involved. That's right,

go pro launched a probe with a camera attached and it was falling

off, so they had to recall them. That is not something any company

wants to be involved in. Safety issues and also the impact with

aviation. You don't want to be a drone operator that crushes your

drone into a helicopter or plane. We are at risk of droning on. Not you!

That all we got time for. We will see you tomorrow. Thanks for

watching.