17/07/2017 BBC Business Live


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This is Business Live from BBC News with Susannah


Latest growth figures from the world's second biggest


Live from London, that's our top story


China grows faster than expected - but will measures to rein in debt


put the brakes on the world's second biggest economy.


The UK's Brexit secretary urges for both sides


to get down to business - as the second round of formal talks


This is how the European markets have been faring so far, the FTSE


100 in positive territory following on from a record close on Wall


Street on Friday. And the transformation


from sugary sodas - to sparkling water -


we'll be talking to And Game of Thrones -


the penultimate series of the blockbuster tv series


is kicking off. It's reportedly worth


a billion dollars a year. We want to know, are


you still gripped and why? China's economy is the focus


of attention today. It has grown more than


expected in the second quarter of this year -


by 6.9% - this matters because the country is regarded


as the world's factory. It's also the world's


second biggest economy. As you can see here, it's a far cry


from how things used to be - this shows how for much of the last


25 years, China has been One of the big worries


is this number. 258% is the size of China's debts


compared to its economy. That means it owes more


than two and a half time Much of the debt is linked


to the red hot property market which the government


is trying to cool. The cost of new housing in major


cities rose 10.4% in May. The government also looks


likes it is succeeding This year Chinese firms have spent


$75.2bn on foreign merger and acquisitions which is down


almost half on the same Financial regulation has


become a top priority This weekend he's been at a meeting


of regulators in Beijing where he called for the country's


central bank to take a bigger role Stephen McDonnell is our


Beijing Correspondent. We just heard a run through the


numbers, the second-quarter figures coming in slightly ahead of


expectations but to what degree can we trust the numbers? That's a very


good question. I was going to save the government will be very happy


with these figures, better than expected at you have to take into


account that some analysts don't trust the GDP figures in China.


That's because some provinces inflate their own performance to


appear better than they have been and others play it down because they


want to attract top from central government and there's been all


sorts of problems in recent times, getting the problems is to tell the


truth about GDP figures. Nevertheless I think the trajectory


is probably right, it's down on what it was in years gone by that people


should also keep in mind it's coming off a much bigger base. Imagine, six


and a half percent growth now is probably better than 8% growth some


years ago because it's coming off so much more and really, economists


have been saying China was growing too fast anyway, that was part of


the problem. We heard before the problems of debt, housing prices,


problems with pollution, all to do with breakneck growth, they've got


to slow it down and the country is dry to do that, the government dry


to Tay Bridge so the economy doesn't collapse, it can slow down to a


manageable level and keep going at something more like, 4% or less.


There are still concerns the amount of money being put into zombie


companies, those which aren't creating much, what is planned as


far as the government is concerned to try and crack down on these and


limit them? One of the indications that worried people is capital


flight for example, seem as a big food of no confidence in the Chinese


economy. Look how many companies and individuals are dry to get money out


of the country, the government is dry to calm down the horses. They


are worried about overpriced housing, the value of the local


currency, dead is a huge problem. I know I keep saying one thing and


then another but the thing with debt here is that it's a bit different,


it's old within the Communist Party if you like. Some would say it's not


as big a problem as others would think because it's kind of like the


Catholic Church, one part of it going the other arm of the Catholic


Church monies so if they really want to sort it out in the end, they can.


But we have to see to what extent this country can maintain its growth


and in the long run, shift from relying so much on exports and keep


building up the middle class here and pushing for more of a domestic


consumption driven model. The Chinese economy going through this


big period of adjustment, Stephen, thank you.


Let's take a look at some of the other stories making the news...


Brexit Secretary David Davis has called on both sides


in the negotiations on the UK's departure from the European Union


Mr Davis is in Brussels for a second round of formal talks on Brexit.


He said his priority was to "lift the uncertainty" for EU citizens


living in the UK and Britons living in the EU.


A major cyber attack could cost the global economy around


$53 billion dollars - according to research


That's roughly the same cost as Superstorm Sandy,


the hurricane that hit the east coast of the United States in 2012.


Sony is in the final stages of buying believed digital according to


Japanese media. Sony will get a majority stake and the transaction


is expected to come to a close later this year. Lots of stories catching


our attention on the business website. This one in particular. The


city envoy saying France wants a disruptive Brexit, hoping to disrupt


London's role. This is according to the City of London envoy to the EU.


Jeremy Browne saying venture parodies seeking destruction, in


favour of the hardest Brexit to take opportunity to win business for


Paris. And much more on the business life page, we'll be bringing you


some other highlights throughout the programme.


South Korea has announced the biggest rise in


Leisha Santorini is in Singapore - why such a big raise now?


In short it's because South Korea's new President is trying to get


people to spend more in order to reduce the economy's reliance on


exports and that's why they are raising the minimum rate wage next


year by 16% to $6.60 per hour, the biggest jump since 2001. The


President wants to increase it further in the coming years to about


$8 80 by 2020. The decision to increase wages wasn't easy, it took


more than a month of negotiations between business and labour groups,


businesses oppose a large increase to wages because they say it will


hurt profitability and it will be to job losses. The trade unions say


higher wages are needed to ensure families have a minimum level of


dignity, both sides coming to a compromise and part of that entails


giving small-business owners financial aid in order to help


offset the wage increase and that's going to be paid for by the


government as well. Thank you. Let's check in with the rest of the


financial markets. The Nikkei is closed


for a public holiday today. It will be interesting to see how


investors will react to the news that Sony is in the final stages


of talks to acquire French music distribution


providing Believe Digital. Other indices have mainly risen


in Asia following another record However, Shanghai stocks fell


after the data came through showing China's economy grew more


than expected in the second quarter. It's because, as we were discussing


earlier, about those ongoing concerns about China's debt burden


and the lack of reforms many This is what it's


looking like in Europe. EasyJet's share price


has fallen after news its Chief Executive Carolyn McCall


is to head up the UK broadcaster ITV and its shares


have risen as a result. We'll talk more about that in a


moment. After that record close for both


the Dow and the S 500 on Friday, Michelle Fleury has the details


about what's ahead From banking to consumer goods to


the tech sector, we learn a lot more about the help of corporate America


this week as firms continue to report quarterly profits. This


Monday the world's largest money manager Blackrock leases its


second-quarter profits, at the end of the previous quarter it had by


$.4 trillion worth of assets under management. Netflix is piling up any


nominations, investors in the streaming service hope its strong


content will lead to more than just critical accolades when it reported


quarterly profits this Monday. It shows like 13 reasons why and


stranger things, Wall Street expects Netflix to report substantial growth


in the number of viewers signing up for its servers. The company is


projected to have added 600 and the 1000 subscribers in the US during


the quarter. Thank you. Joining us now is David Buik


from Panmure Gordon. Good morning. Ladies, what a joy.


Let's talk about what's happening on the markets. Trading in the narrow


band but lots going on. There is a lot of business going on, it's


interesting, a feeling which Michelle referred to, that the


quarter earnings in the United States will be quite good. We had


three large banks on Friday all beating expectation, whose one


junior members club that people didn't like, the fact trading


revenues in the large banks, down 19%, JP Morgan down 6%, Citigroup,


but the real bread and butter and King was in grade order and the


prospect of higher interest rates in the United States looks good but


these shares have rallied between 23-35% since the 8th of November


last year. It is interesting given the fact tax cuts promised are still


some way off, even so... Infrastructure spending still miles


off. The expectation is there because Janet Yellen and said she


hopes to raise interest rates slowly and stop quantitative easing, not


stop it but Tay Bridge as far as she can. Do you think the Brits we


should keep an eye on going forward, as far as US stocks are concerned?


Obviously Netflix today, a lot of other companies like Johnson and


Johnson, I want to see how they are getting on, what we want by the end


of this week as a prop church of exactly how all the sectors have.


We've heard about financial, some of the consumers will say Johnson and


Johnson, we need to know about groups like smaller companies. I


want to ask you about smaller stock, the sale of food group to Unilever.


What the company has had to do in the same way as Unilever did was


focus on key businesses. They are about to pay 18 billion dollars for


a main food operator, they have got to make room for that, cut back as


much as they can, hopefully selling things like Coremans mustered,


Unilever is the favourite but cannot be ruled out, wholemeal foods that


make spam, I don't think and I didn't think people make that any


more. Keep an eye on the spam! Thank you so much. You're going to stick


around and take us through some of the other stories, David, great to


have you here. The transformation from sugary


sodas to sparkling water. We'll be talking to


the head of Soda Stream. You're with business


live from the BBC News. The final route for HS2 be announced


later. Carillion is amongst the companies awarded the contract ?7


billion, information on around 16,000 jobs. Joe Lynam has much


more. It's Britain's biggest investment


ever in public transport. HighSpeed2 is designed to cut


journey times and increase the number of passenger


seats between London It's been six years


in the planning but now the first construction contracts have been


signed, and they're worth ?6.6 billion, which the government says


will support 16,000 jobs The first trains aren't


expected to run, though, until 2026, by which time they hope


to carry 300,000 passengers per day. ?50 billion on a track


of this nature... The Stop HS2 Campaign


in the Chiltern says it will only benefit the richest in society


and the corporations who build it. And reports on the weekend said HS2


could end up as the most expensive Even so, the muddy work of spades


in the ground begins next year for what the government


calls "The backbone Let's check in with


the financial markets. We have an update on the BBC Online


website, ITV naming easyJet's Carolyn McCall as the new Chief


Executive. As we were saying earlier, on the back of this story


we saw that ITV shares have rallied whilst easyJet's have taken a slump.


Carolyn McCall appointed adds the new Chief Executive of the


broadcaster ITV, having formerly been at the budget airline easyJet.


There's been a lot of speculation on this move already affecting the


share prices of both the companies. Now we have that story confirmed.


Much more on the BBC website for you, including the Biz live page.


Overseas landlords shun the UK as tax changes bite.


China's economy grew at 6.9%, higher than many forecast. It's trying to


rein in debt. Let's check in with


the financial markets. The Nikkei is closed


for a public holiday today. A quick look at how


the markets are faring. Today we are going to get busy


with a fizzy, a slogan that was made to sell sugary sodas,


which is now being used to persuade consumers to switch


to sparkling water instead. Soda Stream originated in 1903


with the first apparatus that It reached maximum popularity


in the 60s and 70s, aided by the tag line that we mentioned,


as bottle shops became hangout In 1991, the drinks-maker


was purchased from Cadbury-Schweppes In 2014, the company switched focus


from the overcrowded flavoured drinks market to sparkling water


with an environmental plastic-free emphasis,


a shift that saw a quadrupling We are joined by Daniel Birnbaum,


CEO of Soda Stream. Thank you for coming in and bringing


some freshly carbonated water for us. We have been mentioning how long


soda stream has been around, 100 years, but there's been a see


change. You were known for sparkly, fizzy sweet unhealthy drinks but now


you are making the shift into healthy sparkling water. How are you


managing to get that message across? That's right. Soda stream is a brand


in transition and we used to be a fizzy drinks maker. Then in 2014 we


announced a strategy to focus on sparkling water. Today we are the


largest sparkling water brand in the world, three times the size of San


Pellegrino. We are one of the fastest growing brands in the world


so something is work, here. It's about the consumer, voting against


sugar and disposable plastic bottles. This bottle can make 30,000


litres of sparkling water, 3,000! In a world where we are creating so


much trash, it's a billion and a half disposable bottles every single


day are manufacturered and used, which is incredible. This waste is


going nowhere. All the plastic that's ever been created in the


world still exists. In the garages up and down this country, there'll


be lots of redundant soda streams. I have one in our house because I had


one when I was growing up and there is a sticky residue in the


cupboards. What is the market now, not children any more? There are


millions of soda streams in homes because everyone used to have one.


It's easy and convenient, you save money, you are healthy. Or just


drink tap water? Exactly. It's cheap and safe. While we have the


companies out there, the bottled brands led by Coca-Cola and Nestle


that are seducing customers into believing tap water is unsafe and


they should pay money for the bottled waters, at soda stream, we


are saying drink tap water. If you want the bubbles, we have a device


to help you do that cheap and easy. There are a lot of markets that you


are not going into because you are dubious about the quality of the tap


water? Well, no, we are already in 45 countries in the world, the


fastest growing... You are not in China or Brazil? We are in Brazil.


In China we are waiting because we have so much growth potential where


we are. 60% of our revenue comes from Europe, the largest market is


Germany. We expect the UK to vote against plastic waste and drink tap


water and if they want bubbles use soda stream and bring in their old


machines, we'll give a heavy discount on a new device. I want to


ask you about controversy that's surrounded the firm and it's also


the track fill which was located, there was a boycott at one point.


What have you done to try to tackle that issue? That is true. We used to


have a factory in the West Bank in Israel. We shifted that factory


because we grew so much, we needed to relocate. What we do is, we do


the economy of peace. We reach out to people from both sides of the


conflict, Palestinians and Israelis. We employ 2,000 people in Israel and


get people to know each other and live together and respect each other


and celebrate coexistence. I invite you to come and visit the factory


and you will see what peace looks like and we are proud of that. It's


a big claim. It is. Thank you very much for coming in. Thanks for


having me. Online shaving subscriptions are out


there now. Products like shaving foam and gel can be delivered to


your home. The CEO secret team have been


talking to the man who has been behind this. Focus on your


priorities. My days can be really busy, filled


with meetings, runs around from place-to-place, I wake up, I'm on my


phone seeing what happened overnight. My daughter comes in and


joins me, grabs my phone and starts to try to eat it which is usually a


good reminder, I try to schedule blocks of time, one or two hours of


uninterrupted time, pretend like it's a meeting. It's hard to get ten


things done when you are trying to juggle all ten done at once. It's


easier to get two or three things done if you can create time and


space to focus on the two or three things.


Let's see what other stories are being talked


Joining us again is David Buik from Panmure Gordon.


Lloyds says cyber attack comed cost $120 billion, the same as Hurricane


Katrina, but there is a caveat. It says it's very difficult to try and


assess the costs really? It's impossible, but what I'm really


pleased about is the Chief Executive of Lloyds of London has thrown not a


pebble in the water but a bolder, saying Guys and Dolls, if you don't


watch out, this is what can happen. So you cannot do enough in terms of


security. Hurricane Katrina in 2005 cost about $105 billion and there


was a more recent one in 2012 which cost about $50-$60 billion. There


are two areas where we need to be careful. One is the business of the


cloud. That could cost $53. The figure varies between 15 and 120


billion dollars, the second most likely is computer operating systems


where they think the loss could be as much as 28.7. We had the national


health system hijacked last time and we got away with murder thanks to


the young fellow coming out of the clouds from nowhere. It was


extraordinary. Lucky. It won't be as lucky as that next time. Is it


Governments that need to act or... And corporate people and the


computer companies. It's a full-on job. I want to ask you about what we


have all been talking about, the fact that here in the UK tonight we


can watch the first series of Graham of Thrones, we asked our viewers if


they were excited. Nicholas says too much gratuitous sex and violence,


not seen any of it. Derek says I wish the books stayed ahead of the


series. And Trevor says the greatest TV series of all-time. It's a


money-spinner if nothing else? There are 30 million people that disagree,


of course, you know! 8.9 million watched the last episode and this is


the seventh series. Keeps running. Never beat Sopranos in a million


years. There you've got it. Thanks for coming in.


There'll be more business news throughout the day on the BBC live


web page and on ward business news report.


Some warm, even hot temperatures in the first part of the week. The risk


of a thunder storm


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