:00:08. > :00:10.This is Business Live from BBC News with Ben Thompson and Ben Bland.
:00:11. > :00:18.Japan reports its longest run of economic growth in a decade.
:00:19. > :00:33.Live from London, that's our top story on Monday the 14th of August.
:00:34. > :00:37.Japan records its sixth straight quarter of economic growth, fuelled
:00:38. > :01:01.But could soaring debt and stubborn deflation derail the recovery?
:01:02. > :01:05.Despite being banned in the country for years,
:01:06. > :01:07.a photo-sharing app 'colourful Balloons' has popped
:01:08. > :01:09.up on the mainland - but has no Facebook branding.
:01:10. > :01:12.And a new week but old worries over tensions between North Korea
:01:13. > :01:18.And with holiday season in full swing we'll speak to the founder
:01:19. > :01:21.of one hotel online booking firm who's trying to cut
:01:22. > :01:23.And as airline passenger arrests soar by 50%,
:01:24. > :01:26.Today we want to know what are your flying bugbears?
:01:27. > :01:42.Know surprisingly my biggest bugbear when a flying is the lack of legroom
:01:43. > :01:46.-- no surprise, my biggest bugbear. We start with Japan,
:01:47. > :01:48.which has just released its latest set of growth figures,
:01:49. > :01:50.and there's good news for It recorded its longest economic
:01:51. > :01:55.expansion in a decade. Japan beat expectations with growth
:01:56. > :01:58.of 1% between April and June - that's the sixth straight
:01:59. > :02:02.quarter of growth. The numbers are an encouraging
:02:03. > :02:07.sign for the government but don't solve the country's
:02:08. > :02:12.ongoing financial headaches. Japan's productivity per person
:02:13. > :02:19.per hour stands at $23.45. That leaves it in 18th place
:02:20. > :02:24.in the world, well behind the US on $33.41 and a host of others
:02:25. > :02:27.including Canada, the UK and France. The country's debt has also
:02:28. > :02:33.ballooned in recent years. At more than 250% of GDP it
:02:34. > :02:37.has the largest debt to output ratio in the world,
:02:38. > :02:41.by quite a comfortable margin. Long-term the country also faces
:02:42. > :02:43.what's been described If current trends persist,
:02:44. > :02:52.in less than 50 years nearly 40% of the population will be over
:02:53. > :02:55.the age of 65. Sir David Warren, an associate
:02:56. > :03:09.fellow of the Asia programme Do we take this to mean that the
:03:10. > :03:11.combination of monetary easing and fiscal stimulus and structural
:03:12. > :03:28.reforms is working? It is good news for Abenomics because it seems
:03:29. > :03:33.to be working, this is the strongest growth for two years, the strongest
:03:34. > :03:38.consumer spending for a couple of years and the longest continuous
:03:39. > :03:43.growth for over a decade. You have to go back to the early 2000s and
:03:44. > :03:49.their aggressive structural form of the Japanese economy to find
:03:50. > :03:55.continuous growth like this, and this bears out the positive verdict
:03:56. > :04:00.that the IMF were beginning to give on Abenomics a couple of months ago.
:04:01. > :04:08.What about the long-term issues, taking the debt issue to begin with.
:04:09. > :04:12.250% of GDP. Are they doing enough to sort that out? It is difficult
:04:13. > :04:22.for the Japanese government. This is a massive debt overhang and they
:04:23. > :04:27.need to sort this out, and they have controversially tried to begin the
:04:28. > :04:32.process of putting up VAT and to concentrate on fiscal consolidation
:04:33. > :04:34.and that is controversial at a time when they also trying to get
:04:35. > :04:43.inflation into the economy and get up and prices up. It is difficult
:04:44. > :04:46.for him -- and get wages up. The majority of the domestic debt is
:04:47. > :04:49.domestic, they are borrowing from themselves rather than international
:04:50. > :04:54.markets, the Japanese government won't want to lose their focus on
:04:55. > :04:59.the longer term, but it will be a continuing problem for them. If that
:05:00. > :05:03.seem to like a big problem to deal with, the ageing population is more
:05:04. > :05:09.complex, because the risk that they face if the number of people aged 65
:05:10. > :05:13.and over get close to 40%, you have people were lying on the state
:05:14. > :05:17.pension system and fewer people proportionally paying into the
:05:18. > :05:21.system. This is the biggest problem Japan has to face in the long-term,
:05:22. > :05:26.they need to bring more women into the workforce and the government has
:05:27. > :05:29.committed to do this. This means probably bringing more immigrants
:05:30. > :05:34.into the country, Japan has a very selective policy when it comes to
:05:35. > :05:38.immigration. But they are prepared to bite the bullet and bring workers
:05:39. > :05:43.in from abroad and it means people working much longer. We are seeing a
:05:44. > :05:49.growth in older workers working longer into what we think of as
:05:50. > :05:53.pensionable age, but these demographics are a long-term issue
:05:54. > :05:55.for the Japanese to address. Thanks for joining us.
:05:56. > :06:14.Let's take a look at some of the other stories making the news.
:06:15. > :06:16.The chief executive of Australia's largest bank is to retire following
:06:17. > :06:20.Ian Narev has been head of Commonwealth Bank since 2011
:06:21. > :06:22.but civil charges accuse the lender of breaching financing rules.
:06:23. > :06:24.Those claims have wiped billions of dollars off
:06:25. > :06:28.Narev is expected to step down in June next year.
:06:29. > :06:29.After weeks of public disagreement, the UK's
:06:30. > :06:31.Finance Minister Phillip Hammond and the country's Trade Secretary
:06:32. > :06:34.Liam Fox have written a joint article for the Sunday Telegraph,
:06:35. > :06:37.stating that Britain will need a transition deal when it
:06:38. > :06:41.The pair say that any deal would be "time limited" and should not be
:06:42. > :06:56.viewed as a "back door" to staying in the EU.
:06:57. > :06:58.Bitcoin is hovering above the $4,000 mark after surging past
:06:59. > :07:02.Bloomberg reports it has soared on growing optimism faster
:07:03. > :07:04.transaction times will hasten the spread of the cryptocurrency.
:07:05. > :07:06.Facebook is reported to have launched a photo-sharing app
:07:07. > :07:10.According to the New York Times, the social media giant
:07:11. > :07:12.which is banned in mainland China has launched an app called
:07:13. > :07:16.It's thought to have been released through a local company
:07:17. > :07:19.Let's find out more, Karishma Vaswani, our Asia business
:07:20. > :07:30.They have launched it, no branding so there is no real connection with
:07:31. > :07:36.Facebook, why was Facebook banned in the first place? As you know, the
:07:37. > :07:40.social media websites in general in China have been banned because of
:07:41. > :07:46.strict internet censorship rules and the tight control China places on
:07:47. > :07:49.their citizens and what they can access, but there's been no
:07:50. > :07:55.confirmation from about this story. But the New York Times and other
:07:56. > :08:08.media reported that Facebook said this launch was something they
:08:09. > :08:14.okayed. You know what this is, basically it is a photo sharing
:08:15. > :08:20.website. In China Facebook is banned, like many other forms of
:08:21. > :08:25.social media, including Twitter. This app which is called Colourful
:08:26. > :08:30.Balloons feels a bit like Facebook it doesn't carry the Facebook name
:08:31. > :08:40.or the logo. It was released in China by a company, but all the
:08:41. > :08:43.Facebook spokesman has said is that they are interested in China and
:08:44. > :08:47.they are spending time in understanding and learning more
:08:48. > :08:48.about the company. You know that I use Facebook because we have shared
:08:49. > :08:57.some funny in stories. It's Monday, the start
:08:58. > :08:59.of a new trading week, but the same issue is what's
:09:00. > :09:03.weighing on markets. Asian numbers down as those worries
:09:04. > :09:06.remain over the war of words between the United States
:09:07. > :09:10.and North Korea. That was enough to take the shine
:09:11. > :09:13.off the better-than-expected The Dow Jones and the S 500
:09:14. > :09:21.finished higher on Friday, but both had their second worst week
:09:22. > :09:24.in 2017 last week - In Europe, markets remain pretty
:09:25. > :09:30.quiet for the holidays - The same worries persist,
:09:31. > :09:36.and no one is willing to call More on that in a moment,
:09:37. > :09:44.but first let's head Stateside and Michelle has a look at what's
:09:45. > :09:48.ahead on Wall Street Today. Geopolitical fears dominated
:09:49. > :09:50.sentiment on Wall Street last week. Traders may find themselves busy
:09:51. > :09:53.poring over the latest Retail sales figures, jobs data,
:09:54. > :09:59.and the minutes from the most recent Fed meeting are all due out over
:10:00. > :10:03.the coming days. On the corporate front,
:10:04. > :10:06.keep an eye out for a host of high street names from The Gap,
:10:07. > :10:09.Walmart, Home Depot and Target, all reporting their latest
:10:10. > :10:14.earnings figures. On Wednesday, US, Mexican
:10:15. > :10:18.and Canadian officials meet in Washington DC for the first
:10:19. > :10:23.round of talks to renegotiate the North American Free Trade Agreement,
:10:24. > :10:26.or "Nafta" for short. Investors will be watching that
:10:27. > :10:28.for any signs of increased This Monday, Canadian Foreign
:10:29. > :10:33.Minister Chrystia Freeland will testify to a
:10:34. > :10:36.parliamentary committee. She is expected to discuss
:10:37. > :10:38.the government's negotiating Justin Urquhart-Stewart is with us,
:10:39. > :10:54.of Seven Investment Management. The nick a is down almost 1%,
:10:55. > :11:00.shrugging off the rather dramatic improvement for the Japanese
:11:01. > :11:05.economy. Yes, some very good figures for the Japanese economy, Abenomics
:11:06. > :11:09.is beginning to work, but we have the issue of career and that will be
:11:10. > :11:21.covering all markets at the moment -- the issue of Korea. The United
:11:22. > :11:25.States just ignored it last week, though, and they just went up. We
:11:26. > :11:31.will be waiting for the next stage of this, but the markets are at low
:11:32. > :11:36.volatility, low volume, the middle of the summer, but this is when you
:11:37. > :11:41.could get some volatility coming in and people need to be prepared. Is
:11:42. > :11:54.it time to take some risk of an take some money off the table? -- and. We
:11:55. > :11:56.spoke about this last week, people are maybe watching North Korea not
:11:57. > :12:01.the market itself and this is where we could see a correction. You think
:12:02. > :12:08.about the amount which has come back already, pretty small, but it would
:12:09. > :12:11.take so little for a change. The fact that the United States are
:12:12. > :12:17.heading for a debt ceiling again, they have not had a budget proved
:12:18. > :12:21.and I can't get any -- they can't get any tax deals through, and then
:12:22. > :12:28.you have North Korea, so the investors are being more defensive
:12:29. > :12:32.and if people want to take some cash off the table, nothing wrong with
:12:33. > :12:35.that, it is moments like this, you can take some profit and then you
:12:36. > :12:40.can use the volatility to your advantage. You mentioned North Korea
:12:41. > :12:44.and the stand-off between the United States and Pyongyang. The markets in
:12:45. > :12:52.the United States were not that bothered about it last week. That is
:12:53. > :12:55.right. It completely ignored it, and what they were looking at there was
:12:56. > :13:00.the domestic figures which were not bad, and we had figures regarding
:13:01. > :13:04.inflation and that was looking fairly docile, as well, and there
:13:05. > :13:09.was one big issue which was the issue regarding interest rates. If
:13:10. > :13:11.they aren't going to go up as much as before, that was better news for
:13:12. > :13:18.the market and that overrode North Korea. Justin, thanks for joining
:13:19. > :13:20.us. We will see you later to go through the newspapers.
:13:21. > :13:31.Some is not over yet. Even if you have not been on your holiday, there
:13:32. > :13:37.is time to go on one. After the break we will speak to the planner
:13:38. > :13:39.of one hotel booking website who is hoping consumers will cut out the
:13:40. > :13:42.middleman when it comes to booking their holiday.
:13:43. > :14:01.You're with Business Live from BBC News.
:14:02. > :14:02.British businesses have cut back on investment
:14:03. > :14:05.plans as their confidence in the UK economy falters.
:14:06. > :14:07.That's according to the Institute of Chartered Accountants.
:14:08. > :14:09.Their study shows business confidence for the third quarter
:14:10. > :14:11.fell back into negative territory, reversing the gains made
:14:12. > :14:14.Richard Holt is their Economic Advisor.
:14:15. > :14:16.Has this reversal in confidence come about since
:14:17. > :14:23.Clearly this has happened against the background of the general
:14:24. > :14:27.election which introduced a great deal of uncertainty. Probably not
:14:28. > :14:32.the only reason. The other thing which happened was the Brexit
:14:33. > :14:39.negotiations began and continued to be rather unpersuasive and that
:14:40. > :14:44.worried companies, as well, there was also growing anxiety about the
:14:45. > :14:46.possibility of interest rate rises and I think probably a combination
:14:47. > :14:53.of those three together is what is behind this decline.
:14:54. > :14:59.Back in June London's businesses were starting to feel more
:15:00. > :15:04.optimistic, what has changed since then? It's those factors. It's the
:15:05. > :15:10.uncertainty over the domestic political situation, hopefully now
:15:11. > :15:16.resolved. Its concerns about what the Brexit deal will be when it will
:15:17. > :15:20.take place, and people are starting to worry about interest rates. That
:15:21. > :15:24.last thing is perhaps fading away but clearly the EU issue isn't going
:15:25. > :15:44.to disappear for the next two or three years. Thank you.
:15:45. > :15:52.On the website, Scottish salmon exports have reached record value of
:15:53. > :15:56.?346 million in the first half of this year. That is 70% higher
:15:57. > :16:01.compared to the same period last year. The industry saw 29,000 tonnes
:16:02. > :16:06.of fresh salmon sold in the second period of this year alone. The
:16:07. > :16:15.biggest market for them is the United States, while China is the
:16:16. > :16:27.most significant buyer in Asia. Much more on the website.
:16:28. > :16:29.You're watching Business Live - our top story.
:16:30. > :16:32.Japan records its sixth straight quarter of economic growth, fuelled
:16:33. > :16:37.But the world's third largest economy still faces financial
:16:38. > :16:48.hurdles, like a ballooning debt pile and prolonged deflation.
:16:49. > :17:00.A quick look at how markets are faring.
:17:01. > :17:03.Now, many of you may be about to head off on holiday, if so,
:17:04. > :17:06.there's a good chance that you may have used a third-party
:17:07. > :17:10.In fact, a study by Cornell University suggests that
:17:11. > :17:12.three-quarters of all hotel bookings were made through online
:17:13. > :17:16.travel agents such as Expedia or Booking.com.
:17:17. > :17:19.While this can be an efficient way to compare hotel
:17:20. > :17:21.prices within a city, holiday-makers may lose out
:17:22. > :17:23.on special offers granted to people booking directly with the hotel,
:17:24. > :17:32.this could include perks like free-wifi or free online check-in.
:17:33. > :17:34.And for hotel chains, third party booking websites remove
:17:35. > :17:36.the ability to offer a customised experience which would otherwise
:17:37. > :17:52.With us is Hotelchamp's chief executive officer
:17:53. > :18:07.I see the benefit of the King with a hotel directly because you can get
:18:08. > :18:11.some of those added perks. But if it's cheaper to do it through a
:18:12. > :18:16.third party I'm probably going to do it through a third-party. You're
:18:17. > :18:22.right about that. What we saw in the old days is that hoteliers sometimes
:18:23. > :18:27.charge higher prices on their own website rather than on a booking
:18:28. > :18:32.platform like Booking.com. Luckily we see a trend that hoteliers are
:18:33. > :18:38.more aware that they should create a level playing field where prices are
:18:39. > :18:42.the same. But still able to offer extra services or added value.
:18:43. > :18:46.There's a trade-off. By putting yourself on a third-party site you
:18:47. > :18:52.open yourself up to many more people who might not necessarily have heard
:18:53. > :18:55.about you. If I put myself on Expedia or Booking.com to get a
:18:56. > :19:00.bigger audience, but you say they don't really need to do that any
:19:01. > :19:04.more, we are better at shopping around? You are definitely better
:19:05. > :19:07.off shopping around. Hoteliers are very good at giving hospitality
:19:08. > :19:11.within the hotel. But they've been struggling to bring the same
:19:12. > :19:16.hospitality to their website, for example. This is where we come in.
:19:17. > :19:23.We help hotels to give the same hospitality level to the website as
:19:24. > :19:27.they do in the hotel. What we are trying to do is to bridge the gap
:19:28. > :19:33.when it comes to information from the hotelier to their website
:19:34. > :19:39.visitors. Quite often the hotelier can give you a better service if he
:19:40. > :19:43.knows what you're up to, and he can give you that by having this
:19:44. > :19:48.information. It's an interesting time to be going into the hotel
:19:49. > :19:58.industry, because when I go away, I tend to look for hotels, but a lot
:19:59. > :20:04.of my friends say they book through Airbnb. Is there still a robust
:20:05. > :20:09.business model for hotels in the traditional sense? The hospitality
:20:10. > :20:18.industry is growing tremendously. I think Airbnb is fulfilling a need
:20:19. > :20:22.that people like to have another experience. Hospitality is all about
:20:23. > :20:30.experience. What we see is that in the current model, where online has
:20:31. > :20:33.such a dominant position, guests don't get the right experience nor
:20:34. > :20:37.the right service level, letter in the value for money they would have
:20:38. > :20:43.got if the middleman hadn't had such a dominant position that they
:20:44. > :20:48.currently have. I can see the benefit of a hotel chain using your
:20:49. > :20:50.site, they can speak to their customers directly, they know who
:20:51. > :20:56.they are, what type of room they want, all those sorts of things. But
:20:57. > :21:01.from a traveller 's point of view, what difference does it really make?
:21:02. > :21:05.The convenience of a third-party site means you've suddenly got a
:21:06. > :21:11.whole array of hotels to book from. Yes. There are maybe two things to
:21:12. > :21:15.say to that. First of all, extensive research shows that most people do
:21:16. > :21:18.look around on the booking platforms, but still the majority
:21:19. > :21:25.goes directly to the hotel website for more information. The
:21:26. > :21:28.interesting fact is 99% of those people will leave that website
:21:29. > :21:31.without making a booking because they don't trust it or they don't
:21:32. > :21:41.get the right information, or they believe they will get a better deal
:21:42. > :21:47.elsewhere. HotelChamp is offering that to their guests and maybe even
:21:48. > :21:50.offering them a better deal. The convenience of the booking platforms
:21:51. > :21:55.looks great from a consumer perspective. Let's assume you go on
:21:56. > :22:01.a trip for a weekend to Barcelona, maybe you paid ?200 for a two night
:22:02. > :22:05.stay in a hotel. The current commission model, you easily pay
:22:06. > :22:13.close to ?50 on that booking. This is what the hotelier pays the third.
:22:14. > :22:17.Imagine what an experience or better deal be hotelier could give you if
:22:18. > :22:21.this middleman didn't have such a dominant position. You make your
:22:22. > :22:30.money from winds and the software? Exactly. Thank you for talking us
:22:31. > :22:35.through it. -- you make your money from licensing the software.
:22:36. > :22:37.70 years ago, Britain ended its rule over India
:22:38. > :22:39.and the country was divided into two separate states.
:22:40. > :22:42.Partition brought about the largest mass movement of people in history,
:22:43. > :22:44.but what has become of the economies of Pakistan and India?
:22:45. > :22:58.Since partition, India and Pakistan have taken different economic paths.
:22:59. > :23:02.India's economy was bigger than Pakistan from the start, because of
:23:03. > :23:06.the size of its population and because of the fact it inherited
:23:07. > :23:10.financial and government institutions. Today, India's economy
:23:11. > :23:13.is almost eight times bigger than its neighbours. But what's
:23:14. > :23:18.interesting is that during the first 50 years, both nations saw similar
:23:19. > :23:23.economic growth. The average income per person in Pakistan was higher
:23:24. > :23:27.than in India during this period. But, since the start of the
:23:28. > :23:31.21st-century, India's economy started to grow faster, widening the
:23:32. > :23:36.gap. This is largely down to economic reforms in India in the
:23:37. > :23:40.1990s when it opened its markets for foreign and private investments.
:23:41. > :23:46.Today, India and Pakistan are the largest economies in South Asia.
:23:47. > :23:51.Trade between the two countries is thriving and estimated to be close
:23:52. > :23:55.to $5 billion. Experts say that if this trade was formalised, the total
:23:56. > :23:57.bilateral trade between the two countries could touch $10 billion
:23:58. > :24:17.every year. We picked up this story in the
:24:18. > :24:24.papers, SnapChat who is in permanent decline because other companies are
:24:25. > :24:29.stealing its business. When it came to the market it was really rather
:24:30. > :24:34.expensive. Almost from day one it was cursed. We've seen the share
:24:35. > :24:37.price go down and we can hear the mutterings from Facebook and others,
:24:38. > :24:42.they can take away their meal any time they like. This is because the
:24:43. > :24:48.scale of Facebook is absolute. It's something they like, a little
:24:49. > :24:51.start-up, it's just the concept. It's not necessarily the
:24:52. > :24:56.intellectual property but the idea of sticking a filter on a video. The
:24:57. > :25:00.trouble is, anyone else coming in and doing that, Facebook can easily
:25:01. > :25:03.copy that as well. This is going to be the strength of these large
:25:04. > :25:08.operations, the same with Google. It will be difficult to come up against
:25:09. > :25:12.them and protect yourself. This is the point when the regulators are
:25:13. > :25:17.talking about getting involved, they have so much power they are
:25:18. > :25:22.effectively Monopoly players. You almost go back to the American trust
:25:23. > :25:26.system in the 19th century. You had these huge steel conglomerates that
:25:27. > :25:28.had to be broken up, and oil companies as well. That's where you
:25:29. > :25:35.saw these other American oil companies coming up. They become
:25:36. > :25:39.almost ubiquitous, they are effectively running monopolies. It's
:25:40. > :25:42.interesting to see that no one is breaking them up at the moment but
:25:43. > :25:49.at some stage, yes, the law is going to catch up with them and say you're
:25:50. > :25:53.operating as a monopoly. Do you SnapChat? No. I'm going to wait for
:25:54. > :25:57.it to go bust! Thank you.