17/07/2017 BBC Business Live


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17/07/2017

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This is Business Live from BBC News with Susannah

:00:00.:00:07.

Latest growth figures from the world's second biggest

:00:08.:00:14.

Live from London, that's our top story

:00:15.:00:20.

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

:00:21.:00:40.

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

:00:41.:00:44.

The UK's Brexit secretary urges for both sides

:00:45.:00:49.

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

:00:50.:00:52.

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

:00:53.:01:05.

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

:01:06.:01:06.

Street on Friday. And the transformation

:01:07.:01:07.

from sugary sodas - to sparkling water -

:01:08.:01:09.

we'll be talking to And Game of Thrones -

:01:10.:01:11.

the penultimate series of the blockbuster tv series

:01:12.:01:16.

is kicking off. It's reportedly worth

:01:17.:01:18.

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

:01:19.:01:21.

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

:01:22.:01:24.

of attention today. It has grown more than

:01:25.:01:44.

expected in the second quarter of this year -

:01:45.:01:46.

by 6.9% - this matters because the country is regarded

:01:47.:01:49.

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

:01:50.:01:52.

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

:01:53.:01:56.

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

:01:57.:02:00.

25 years, China has been One of the big worries

:02:01.:02:03.

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

:02:04.:02:12.

compared to its economy. That means it owes more

:02:13.:02:14.

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

:02:15.:02:17.

to the red hot property market which the government

:02:18.:02:21.

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

:02:22.:02:23.

cities rose 10.4% in May. The government also looks

:02:24.:02:26.

likes it is succeeding This year Chinese firms have spent

:02:27.:02:28.

$75.2bn on foreign merger and acquisitions which is down

:02:29.:02:34.

almost half on the same Financial regulation has

:02:35.:02:36.

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

:02:37.:02:41.

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

:02:42.:02:46.

central bank to take a bigger role Stephen McDonnell is our

:02:47.:02:49.

Beijing Correspondent. We just heard a run through the

:02:50.:03:04.

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

:03:05.:03:07.

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

:03:08.:03:14.

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

:03:15.:03:17.

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

:03:18.:03:22.

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

:03:23.:03:28.

That's because some provinces inflate their own performance to

:03:29.:03:30.

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

:03:31.:03:35.

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

:03:36.:03:38.

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

:03:39.:03:43.

truth about GDP figures. Nevertheless I think the trajectory

:03:44.:03:47.

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

:03:48.:03:52.

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

:03:53.:03:57.

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

:03:58.:04:03.

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

:04:04.:04:08.

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

:04:09.:04:13.

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

:04:14.:04:18.

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

:04:19.:04:22.

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

:04:23.:04:27.

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

:04:28.:04:30.

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

:04:31.:04:35.

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

:04:36.:04:40.

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

:04:41.:04:46.

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

:04:47.:04:51.

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

:04:52.:05:00.

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

:05:01.:05:04.

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

:05:05.:05:08.

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

:05:09.:05:12.

are worried about overpriced housing, the value of the local

:05:13.:05:19.

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

:05:20.:05:24.

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

:05:25.:05:29.

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

:05:30.:05:34.

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

:05:35.:05:37.

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

:05:38.:05:41.

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

:05:42.:05:47.

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

:05:48.:05:52.

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

:05:53.:05:56.

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

:05:57.:06:02.

consumption driven model. The Chinese economy going through this

:06:03.:06:04.

big period of adjustment, Stephen, thank you.

:06:05.:06:11.

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

:06:12.:06:14.

Brexit Secretary David Davis has called on both sides

:06:15.:06:16.

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

:06:17.:06:19.

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

:06:20.:06:23.

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

:06:24.:06:26.

living in the UK and Britons living in the EU.

:06:27.:06:31.

A major cyber attack could cost the global economy around

:06:32.:06:35.

$53 billion dollars - according to research

:06:36.:06:37.

That's roughly the same cost as Superstorm Sandy,

:06:38.:06:48.

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

:06:49.:06:58.

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

:06:59.:07:03.

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

:07:04.:07:08.

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

:07:09.:07:14.

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

:07:15.:07:26.

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

:07:27.:07:33.

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

:07:34.:07:37.

Jeremy Browne saying venture parodies seeking destruction, in

:07:38.:07:42.

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

:07:43.:07:48.

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

:07:49.:07:51.

some other highlights throughout the programme.

:07:52.:07:52.

South Korea has announced the biggest rise in

:07:53.:07:54.

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

:07:55.:08:06.

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

:08:07.:08:12.

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

:08:13.:08:15.

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

:08:16.:08:22.

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

:08:23.:08:27.

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

:08:28.:08:33.

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

:08:34.:08:38.

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

:08:39.:08:44.

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

:08:45.:08:47.

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

:08:48.:08:55.

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

:08:56.:08:59.

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

:09:00.:09:02.

giving small-business owners financial aid in order to help

:09:03.:09:07.

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

:09:08.:09:12.

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

:09:13.:09:13.

financial markets. The Nikkei is closed

:09:14.:09:16.

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

:09:17.:09:18.

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

:09:19.:09:21.

of talks to acquire French music distribution

:09:22.:09:24.

providing Believe Digital. Other indices have mainly risen

:09:25.:09:25.

in Asia following another record However, Shanghai stocks fell

:09:26.:09:27.

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

:09:28.:09:34.

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

:09:35.:09:36.

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

:09:37.:09:38.

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

:09:39.:09:41.

looking like in Europe. EasyJet's share price

:09:42.:09:50.

has fallen after news its Chief Executive Carolyn McCall

:09:51.:09:53.

is to head up the UK broadcaster ITV and its shares

:09:54.:09:55.

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

:09:56.:10:05.

moment. After that record close for both

:10:06.:10:07.

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

:10:08.:10:10.

about what's ahead From banking to consumer goods to

:10:11.:10:21.

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

:10:22.:10:24.

this week as firms continue to report quarterly profits. This

:10:25.:10:27.

Monday the world's largest money manager Blackrock leases its

:10:28.:10:31.

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

:10:32.:10:37.

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

:10:38.:10:42.

nominations, investors in the streaming service hope its strong

:10:43.:10:45.

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

:10:46.:10:50.

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

:10:51.:10:57.

stranger things, Wall Street expects Netflix to report substantial growth

:10:58.:10:59.

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

:11:00.:11:05.

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

:11:06.:11:06.

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

:11:07.:11:09.

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

:11:10.:11:19.

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

:11:20.:11:24.

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

:11:25.:11:29.

interesting, a feeling which Michelle referred to, that the

:11:30.:11:34.

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

:11:35.:11:38.

three large banks on Friday all beating expectation, whose one

:11:39.:11:44.

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

:11:45.:11:51.

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

:11:52.:11:57.

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

:11:58.:11:59.

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

:12:00.:12:05.

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

:12:06.:12:08.

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

:12:09.:12:13.

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

:12:14.:12:20.

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

:12:21.:12:24.

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

:12:25.:12:30.

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

:12:31.:12:35.

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

:12:36.:12:41.

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

:12:42.:12:44.

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

:12:45.:12:50.

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

:12:51.:12:54.

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

:12:55.:12:58.

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

:12:59.:13:05.

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

:13:06.:13:15.

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

:13:16.:13:18.

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

:13:19.:13:23.

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

:13:24.:13:29.

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

:13:30.:13:31.

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

:13:32.:13:37.

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

:13:38.:13:43.

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

:13:44.:13:48.

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

:13:49.:13:49.

have you here. The transformation from sugary

:13:50.:13:51.

sodas to sparkling water. We'll be talking to

:13:52.:13:54.

the head of Soda Stream. You're with business

:13:55.:13:56.

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

:13:57.:14:23.

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

:14:24.:14:30.

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

:14:31.:14:32.

more. It's Britain's biggest investment

:14:33.:14:49.

ever in public transport. HighSpeed2 is designed to cut

:14:50.:14:51.

journey times and increase the number of passenger

:14:52.:14:53.

seats between London It's been six years

:14:54.:14:55.

in the planning but now the first construction contracts have been

:14:56.:14:58.

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

:14:59.:15:01.

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

:15:02.:15:03.

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

:15:04.:15:06.

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

:15:07.:15:09.

of this nature... The Stop HS2 Campaign

:15:10.:15:11.

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

:15:12.:15:17.

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

:15:18.:15:22.

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

:15:23.:15:25.

in the ground begins next year for what the government

:15:26.:15:30.

calls "The backbone Let's check in with

:15:31.:15:32.

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

:15:33.:15:52.

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

:15:53.:15:55.

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

:15:56.:16:01.

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

:16:02.:16:06.

Carolyn McCall appointed adds the new Chief Executive of the

:16:07.:16:10.

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

:16:11.:16:15.

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

:16:16.:16:18.

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

:16:19.:16:24.

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

:16:25.:16:30.

Overseas landlords shun the UK as tax changes bite.

:16:31.:16:44.

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

:16:45.:17:04.

rein in debt. Let's check in with

:17:05.:17:06.

the financial markets. The Nikkei is closed

:17:07.:17:10.

for a public holiday today. A quick look at how

:17:11.:17:34.

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

:17:35.:17:37.

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

:17:38.:17:43.

which is now being used to persuade consumers to switch

:17:44.:17:45.

to sparkling water instead. Soda Stream originated in 1903

:17:46.:17:48.

with the first apparatus that It reached maximum popularity

:17:49.:17:50.

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

:17:51.:17:54.

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

:17:55.:17:57.

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

:17:58.:18:00.

from the overcrowded flavoured drinks market to sparkling water

:18:01.:18:05.

with an environmental plastic-free emphasis,

:18:06.:18:08.

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

:18:09.:18:10.

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

:18:11.:18:25.

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

:18:26.:18:30.

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

:18:31.:18:36.

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

:18:37.:18:39.

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

:18:40.:18:43.

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

:18:44.:18:48.

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

:18:49.:18:53.

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

:18:54.:18:57.

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

:18:58.:19:04.

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

:19:05.:19:08.

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

:19:09.:19:12.

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

:19:13.:19:21.

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

:19:22.:19:27.

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

:19:28.:19:31.

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

:19:32.:19:35.

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

:19:36.:19:39.

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

:19:40.:19:45.

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

:19:46.:19:52.

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

:19:53.:19:55.

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

:19:56.:20:03.

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

:20:04.:20:13.

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

:20:14.:20:17.

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

:20:18.:20:22.

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

:20:23.:20:27.

that are seducing customers into believing tap water is unsafe and

:20:28.:20:32.

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

:20:33.:20:35.

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

:20:36.:20:38.

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

:20:39.:20:42.

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

:20:43.:20:46.

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

:20:47.:20:50.

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

:20:51.:20:55.

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

:20:56.:21:00.

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

:21:01.:21:04.

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

:21:05.:21:08.

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

:21:09.:21:11.

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

:21:12.:21:17.

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

:21:18.:21:22.

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

:21:23.:21:25.

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

:21:26.:21:30.

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

:21:31.:21:35.

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

:21:36.:21:40.

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

:21:41.:21:44.

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

:21:45.:21:48.

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

:21:49.:21:54.

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

:21:55.:21:58.

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

:21:59.:22:04.

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

:22:05.:22:06.

having me. Online shaving subscriptions are out

:22:07.:22:28.

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

:22:29.:22:35.

your home. The CEO secret team have been

:22:36.:22:42.

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

:22:43.:22:44.

priorities. My days can be really busy, filled

:22:45.:23:00.

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

:23:01.:23:03.

phone seeing what happened overnight. My daughter comes in and

:23:04.:23:07.

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

:23:08.:23:13.

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

:23:14.:23:16.

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

:23:17.:23:21.

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

:23:22.:23:25.

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

:23:26.:23:28.

space to focus on the two or three things.

:23:29.:23:40.

Let's see what other stories are being talked

:23:41.:23:43.

Joining us again is David Buik from Panmure Gordon.

:23:44.:23:50.

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

:23:51.:23:56.

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

:23:57.:24:01.

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

:24:02.:24:05.

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

:24:06.:24:09.

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

:24:10.:24:12.

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

:24:13.:24:21.

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

:24:22.:24:30.

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

:24:31.:24:34.

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

:24:35.:24:42.

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

:24:43.:24:46.

billion dollars, the second most likely is computer operating systems

:24:47.:24:50.

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

:24:51.:24:55.

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

:24:56.:25:00.

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

:25:01.:25:04.

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

:25:05.:25:11.

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

:25:12.:25:14.

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

:25:15.:25:18.

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

:25:19.:25:23.

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

:25:24.:25:29.

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

:25:30.:25:34.

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

:25:35.:25:40.

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

:25:41.:25:44.

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

:25:45.:25:49.

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

:25:50.:25:55.

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

:25:56.:25:59.

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

:26:00.:26:00.

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

:26:01.:26:05.

web page and on ward business news report.

:26:06.:26:07.

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

:26:08.:26:17.

of a thunder storm

:26:18.:26:18.