14/08/2017 BBC Business Live


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


Japan reports its longest run of economic growth in a decade.


Live from London, that's our top story on Monday the 14th of August.


Japan records its sixth straight quarter of economic growth, fuelled


But could soaring debt and stubborn deflation derail the recovery?


Despite being banned in the country for years,


a photo-sharing app 'colourful Balloons' has popped


up on the mainland - but has no Facebook branding.


And a new week but old worries over tensions between North Korea


And with holiday season in full swing we'll speak to the founder


of one hotel online booking firm who's trying to cut


And as airline passenger arrests soar by 50%,


Today we want to know what are your flying bugbears?


Know surprisingly my biggest bugbear when a flying is the lack of legroom


-- no surprise, my biggest bugbear. We start with Japan,


which has just released its latest set of growth figures,


and there's good news for It recorded its longest economic


expansion in a decade. Japan beat expectations with growth


of 1% between April and June - that's the sixth straight


quarter of growth. The numbers are an encouraging


sign for the government but don't solve the country's


ongoing financial headaches. Japan's productivity per person


per hour stands at $23.45. That leaves it in 18th place


in the world, well behind the US on $33.41 and a host of others


including Canada, the UK and France. The country's debt has also


ballooned in recent years. At more than 250% of GDP it


has the largest debt to output ratio in the world,


by quite a comfortable margin. Long-term the country also faces


what's been described If current trends persist,


in less than 50 years nearly 40% of the population will be over


the age of 65. Sir David Warren, an associate


fellow of the Asia programme Do we take this to mean that the


combination of monetary easing and fiscal stimulus and structural


reforms is working? It is good news for Abenomics because it seems


to be working, this is the strongest growth for two years, the strongest


consumer spending for a couple of years and the longest continuous


growth for over a decade. You have to go back to the early 2000s and


their aggressive structural form of the Japanese economy to find


continuous growth like this, and this bears out the positive verdict


that the IMF were beginning to give on Abenomics a couple of months ago.


What about the long-term issues, taking the debt issue to begin with.


250% of GDP. Are they doing enough to sort that out? It is difficult


for the Japanese government. This is a massive debt overhang and they


need to sort this out, and they have controversially tried to begin the


process of putting up VAT and to concentrate on fiscal consolidation


and that is controversial at a time when they also trying to get


inflation into the economy and get up and prices up. It is difficult


for him -- and get wages up. The majority of the domestic debt is


domestic, they are borrowing from themselves rather than international


markets, the Japanese government won't want to lose their focus on


the longer term, but it will be a continuing problem for them. If that


seem to like a big problem to deal with, the ageing population is more


complex, because the risk that they face if the number of people aged 65


and over get close to 40%, you have people were lying on the state


pension system and fewer people proportionally paying into the


system. This is the biggest problem Japan has to face in the long-term,


they need to bring more women into the workforce and the government has


committed to do this. This means probably bringing more immigrants


into the country, Japan has a very selective policy when it comes to


immigration. But they are prepared to bite the bullet and bring workers


in from abroad and it means people working much longer. We are seeing a


growth in older workers working longer into what we think of as


pensionable age, but these demographics are a long-term issue


for the Japanese to address. Thanks for joining us.


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


The chief executive of Australia's largest bank is to retire following


Ian Narev has been head of Commonwealth Bank since 2011


but civil charges accuse the lender of breaching financing rules.


Those claims have wiped billions of dollars off


Narev is expected to step down in June next year.


After weeks of public disagreement, the UK's


Finance Minister Phillip Hammond and the country's Trade Secretary


Liam Fox have written a joint article for the Sunday Telegraph,


stating that Britain will need a transition deal when it


The pair say that any deal would be "time limited" and should not be


viewed as a "back door" to staying in the EU.


Bitcoin is hovering above the $4,000 mark after surging past


Bloomberg reports it has soared on growing optimism faster


transaction times will hasten the spread of the cryptocurrency.


Facebook is reported to have launched a photo-sharing app


According to the New York Times, the social media giant


which is banned in mainland China has launched an app called


It's thought to have been released through a local company


Let's find out more, Karishma Vaswani, our Asia business


They have launched it, no branding so there is no real connection with


Facebook, why was Facebook banned in the first place? As you know, the


social media websites in general in China have been banned because of


strict internet censorship rules and the tight control China places on


their citizens and what they can access, but there's been no


confirmation from about this story. But the New York Times and other


media reported that Facebook said this launch was something they


okayed. You know what this is, basically it is a photo sharing


website. In China Facebook is banned, like many other forms of


social media, including Twitter. This app which is called Colourful


Balloons feels a bit like Facebook it doesn't carry the Facebook name


or the logo. It was released in China by a company, but all the


Facebook spokesman has said is that they are interested in China and


they are spending time in understanding and learning more


about the company. You know that I use Facebook because we have shared


some funny in stories. It's Monday, the start


of a new trading week, but the same issue is what's


weighing on markets. Asian numbers down as those worries


remain over the war of words between the United States


and North Korea. That was enough to take the shine


off the better-than-expected The Dow Jones and the S 500


finished higher on Friday, but both had their second worst week


in 2017 last week - In Europe, markets remain pretty


quiet for the holidays - The same worries persist,


and no one is willing to call More on that in a moment,


but first let's head Stateside and Michelle has a look at what's


ahead on Wall Street Today. Geopolitical fears dominated


sentiment on Wall Street last week. Traders may find themselves busy


poring over the latest Retail sales figures, jobs data,


and the minutes from the most recent Fed meeting are all due out over


the coming days. On the corporate front,


keep an eye out for a host of high street names from The Gap,


Walmart, Home Depot and Target, all reporting their latest


earnings figures. On Wednesday, US, Mexican


and Canadian officials meet in Washington DC for the first


round of talks to renegotiate the North American Free Trade Agreement,


or "Nafta" for short. Investors will be watching that


for any signs of increased This Monday, Canadian Foreign


Minister Chrystia Freeland will testify to a


parliamentary committee. She is expected to discuss


the government's negotiating Justin Urquhart-Stewart is with us,


of Seven Investment Management. The nick a is down almost 1%,


shrugging off the rather dramatic improvement for the Japanese


economy. Yes, some very good figures for the Japanese economy, Abenomics


is beginning to work, but we have the issue of career and that will be


covering all markets at the moment -- the issue of Korea. The United


States just ignored it last week, though, and they just went up. We


will be waiting for the next stage of this, but the markets are at low


volatility, low volume, the middle of the summer, but this is when you


could get some volatility coming in and people need to be prepared. Is


it time to take some risk of an take some money off the table? -- and. We


spoke about this last week, people are maybe watching North Korea not


the market itself and this is where we could see a correction. You think


about the amount which has come back already, pretty small, but it would


take so little for a change. The fact that the United States are


heading for a debt ceiling again, they have not had a budget proved


and I can't get any -- they can't get any tax deals through, and then


you have North Korea, so the investors are being more defensive


and if people want to take some cash off the table, nothing wrong with


that, it is moments like this, you can take some profit and then you


can use the volatility to your advantage. You mentioned North Korea


and the stand-off between the United States and Pyongyang. The markets in


the United States were not that bothered about it last week. That is


right. It completely ignored it, and what they were looking at there was


the domestic figures which were not bad, and we had figures regarding


inflation and that was looking fairly docile, as well, and there


was one big issue which was the issue regarding interest rates. If


they aren't going to go up as much as before, that was better news for


the market and that overrode North Korea. Justin, thanks for joining


us. We will see you later to go through the newspapers.


Some is not over yet. Even if you have not been on your holiday, there


is time to go on one. After the break we will speak to the planner


of one hotel booking website who is hoping consumers will cut out the


middleman when it comes to booking their holiday.


You're with Business Live from BBC News.


British businesses have cut back on investment


plans as their confidence in the UK economy falters.


That's according to the Institute of Chartered Accountants.


Their study shows business confidence for the third quarter


fell back into negative territory, reversing the gains made


Richard Holt is their Economic Advisor.


Has this reversal in confidence come about since


Clearly this has happened against the background of the general


election which introduced a great deal of uncertainty. Probably not


the only reason. The other thing which happened was the Brexit


negotiations began and continued to be rather unpersuasive and that


worried companies, as well, there was also growing anxiety about the


possibility of interest rate rises and I think probably a combination


of those three together is what is behind this decline.


Back in June London's businesses were starting to feel more


optimistic, what has changed since then? It's those factors. It's the


uncertainty over the domestic political situation, hopefully now


resolved. Its concerns about what the Brexit deal will be when it will


take place, and people are starting to worry about interest rates. That


last thing is perhaps fading away but clearly the EU issue isn't going


to disappear for the next two or three years. Thank you.


On the website, Scottish salmon exports have reached record value of


?346 million in the first half of this year. That is 70% higher


compared to the same period last year. The industry saw 29,000 tonnes


of fresh salmon sold in the second period of this year alone. The


biggest market for them is the United States, while China is the


most significant buyer in Asia. Much more on the website.


You're watching Business Live - our top story.


Japan records its sixth straight quarter of economic growth, fuelled


But the world's third largest economy still faces financial


hurdles, like a ballooning debt pile and prolonged deflation.


A quick look at how markets are faring.


Now, many of you may be about to head off on holiday, if so,


there's a good chance that you may have used a third-party


In fact, a study by Cornell University suggests that


three-quarters of all hotel bookings were made through online


travel agents such as Expedia or Booking.com.


While this can be an efficient way to compare hotel


prices within a city, holiday-makers may lose out


on special offers granted to people booking directly with the hotel,


this could include perks like free-wifi or free online check-in.


And for hotel chains, third party booking websites remove


the ability to offer a customised experience which would otherwise


With us is Hotelchamp's chief executive officer


I see the benefit of the King with a hotel directly because you can get


some of those added perks. But if it's cheaper to do it through a


third party I'm probably going to do it through a third-party. You're


right about that. What we saw in the old days is that hoteliers sometimes


charge higher prices on their own website rather than on a booking


platform like Booking.com. Luckily we see a trend that hoteliers are


more aware that they should create a level playing field where prices are


the same. But still able to offer extra services or added value.


There's a trade-off. By putting yourself on a third-party site you


open yourself up to many more people who might not necessarily have heard


about you. If I put myself on Expedia or Booking.com to get a


bigger audience, but you say they don't really need to do that any


more, we are better at shopping around? You are definitely better


off shopping around. Hoteliers are very good at giving hospitality


within the hotel. But they've been struggling to bring the same


hospitality to their website, for example. This is where we come in.


We help hotels to give the same hospitality level to the website as


they do in the hotel. What we are trying to do is to bridge the gap


when it comes to information from the hotelier to their website


visitors. Quite often the hotelier can give you a better service if he


knows what you're up to, and he can give you that by having this


information. It's an interesting time to be going into the hotel


industry, because when I go away, I tend to look for hotels, but a lot


of my friends say they book through Airbnb. Is there still a robust


business model for hotels in the traditional sense? The hospitality


industry is growing tremendously. I think Airbnb is fulfilling a need


that people like to have another experience. Hospitality is all about


experience. What we see is that in the current model, where online has


such a dominant position, guests don't get the right experience nor


the right service level, letter in the value for money they would have


got if the middleman hadn't had such a dominant position that they


currently have. I can see the benefit of a hotel chain using your


site, they can speak to their customers directly, they know who


they are, what type of room they want, all those sorts of things. But


from a traveller 's point of view, what difference does it really make?


The convenience of a third-party site means you've suddenly got a


whole array of hotels to book from. Yes. There are maybe two things to


say to that. First of all, extensive research shows that most people do


look around on the booking platforms, but still the majority


goes directly to the hotel website for more information. The


interesting fact is 99% of those people will leave that website


without making a booking because they don't trust it or they don't


get the right information, or they believe they will get a better deal


elsewhere. HotelChamp is offering that to their guests and maybe even


offering them a better deal. The convenience of the booking platforms


looks great from a consumer perspective. Let's assume you go on


a trip for a weekend to Barcelona, maybe you paid ?200 for a two night


stay in a hotel. The current commission model, you easily pay


close to ?50 on that booking. This is what the hotelier pays the third.


Imagine what an experience or better deal be hotelier could give you if


this middleman didn't have such a dominant position. You make your


money from winds and the software? Exactly. Thank you for talking us


through it. -- you make your money from licensing the software.


70 years ago, Britain ended its rule over India


and the country was divided into two separate states.


Partition brought about the largest mass movement of people in history,


but what has become of the economies of Pakistan and India?


Since partition, India and Pakistan have taken different economic paths.


India's economy was bigger than Pakistan from the start, because of


the size of its population and because of the fact it inherited


financial and government institutions. Today, India's economy


is almost eight times bigger than its neighbours. But what's


interesting is that during the first 50 years, both nations saw similar


economic growth. The average income per person in Pakistan was higher


than in India during this period. But, since the start of the


21st-century, India's economy started to grow faster, widening the


gap. This is largely down to economic reforms in India in the


1990s when it opened its markets for foreign and private investments.


Today, India and Pakistan are the largest economies in South Asia.


Trade between the two countries is thriving and estimated to be close


to $5 billion. Experts say that if this trade was formalised, the total


bilateral trade between the two countries could touch $10 billion


every year. We picked up this story in the


papers, SnapChat who is in permanent decline because other companies are


stealing its business. When it came to the market it was really rather


expensive. Almost from day one it was cursed. We've seen the share


price go down and we can hear the mutterings from Facebook and others,


they can take away their meal any time they like. This is because the


scale of Facebook is absolute. It's something they like, a little


start-up, it's just the concept. It's not necessarily the


intellectual property but the idea of sticking a filter on a video. The


trouble is, anyone else coming in and doing that, Facebook can easily


copy that as well. This is going to be the strength of these large


operations, the same with Google. It will be difficult to come up against


them and protect yourself. This is the point when the regulators are


talking about getting involved, they have so much power they are


effectively Monopoly players. You almost go back to the American trust


system in the 19th century. You had these huge steel conglomerates that


had to be broken up, and oil companies as well. That's where you


saw these other American oil companies coming up. They become


almost ubiquitous, they are effectively running monopolies. It's


interesting to see that no one is breaking them up at the moment but


at some stage, yes, the law is going to catch up with them and say you're


operating as a monopoly. Do you SnapChat? No. I'm going to wait for


it to go bust! Thank you.


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