05/09/2017 BBC Business Live


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


China calls for closer ties of member states to speed up


Live from London, that's our top story on Tuesday 5th September.


As the BRICS - that's Brazil, Russia, India,


China and South Africa - wrap up their summit,


we ask an expert whether these emerging giants are still relevant.


the agency is expelled from the UK trade body for the worst breach


And investors remain nervous amid expectations North Korea


will launch another missile - we'll look at what it


means as investors take money out of stocks.


And we'll be getting the inside track on a booming tech sector.


If you do anything online, from storing photos to buying stuff,


We speak to tech boss who explains why its big business.


We will speak to the former boss of eBay.


Are you worried are about storing precious stuff -


from cherished photos to personal data - on the cloud?


It's the final day of the summit involving leaders of Brazil, Russia,


India, China and South Africa - also known as the BRICS.


The group has been quick to condemn North Korea


for their nuclear missile tests, but discussions have also centred


While the White House is pushing a protectionist trade agenda,


President Xi Jinping wants to use this summit


to promote what he describes as "an open world economy".


Then there's the BRICS bank - a smaller, alternative


to the World Bank- used by governments to fund


It handed out one and a half billion dollars of loans last year and has


pledged 2.5 billion in funding for this year.


China itself has pledged 80 million dollars in funding for BRICS


projects, including an economic and technology cooperation plan.


But there are doubts about whether the BRICS summit


Beijing is busy with its own hugely ambitious Belt and Road initiative,


pledging $124 billion to expand trade links between


Craig Botham, emerging markets economist at Schroders, is with me.


Good morning. Ben gave us a little outline and some of those numbers


look pretty big. How influential are the BRICS organisation now? Good


question. The BRICS concept started largely as a marketing exercise.


There was a question about whether it made sense to lump those


disparate economies together. They have rarely delivered much of


substance, it is usually a statement and a pledge to welcome cooperation


and investment etc, probably the most tangible development was the


New Investment Bank, all the BRICS Bank. China's economy is tendril in


dollars, they pledged $100 billion per year for the road funding. For


the BRICS Stutz macro seems small, it looks like a platform to promote


a brand rather than getting real business done.


So why are they persevering with this? Sony years ago it was the


buzzword in business, we were talking about BRICS all the time


because each of the components of the BRICS was in a very strong


position, emerging markets doing incredibly well and seeing huge


growth, but for many, South Africa, Brazil, that is not the case?


Only China and India have really strong growth rates and India has


taken a bit of a hit in the last couple of quarters. For the other


BRICS it is handy to be associated with China and seen as a peer, if


you like. For China it is a way to show its global leadership at a time


when America seems to be taking a stumble. This has been completely


overshadowed by the situation with North Korea, despite china's efforts


to keep the BRICS summit on the agenda every single journalist is


grilling them about North Korea, particularly China? It is a bit


embarrassing for China, it is almost as if North Korea has done the


specifically to needle President Xi at a time when he is trying to


consolidate his power base. They are still very reluctant to push further


sanctions on North Korea. They are North Korea's major trade partner,


90% of North Korean trade. Serve anyone has a lever to pull against


them it is China, that they seem unwilling to do so.


The BRICS summit is kind of wrapping up. Some of the wires are talking


about comments from India's Foreign Secretary, who is talking about


North Korea to journalists now, basically saying India and China


both agree that more effort needs to be done to enhance mutual trust,


that is one of the latest lines. We will keep you across that. But I


were the main story. The public relations firm


Bell Pottinger has been expelled The Public Relations


and Communications Association says the company was unethical


and unprofessional and brought In an unprecedented move it's


expelled Bell Pottinger for 5 years. It follows the firm's media campaign


for the wealthy Gupta family of South Africa -


which has been heavily criticised for stirring up racial


tensions in the country. The Guptas have been


accused of benefiting financially from close links


to South Africa's President Zuma, and they hired Bell Pottinger


to change their image. To do this, Bell Pottinger began


a plan to raise awareness of "economic apartheid"


in South Africa. They set up a social media campaign,


and advised on political messaging and speeches that blamed


unemployment and inequality in South Now the UK trade body says that this


activity is the worst breach Earlier I spoke to the head


of the PRCA, Francis Ingham. We have expelled Bell Pottinger for


at least five years. That is unprecedented and what we have done


in the past. We did it because their breach of ethics, the work I have


seen, is the worst I have seen in my ten years as director general of the


PRCA. It is important to show the industry have standards, that is why


we expelled Bell Pottinger for at least five years. To James


Henderson's decision to carry the can was not enough? It was necessary


but not sufficient. The industry needs to make a stand and say that


stirring up racial tension and hatred in quite a tense country,


quite flattering democracy, in many ways, is unacceptable. That is what


we have done, we have expelled them from the PRCA. We have done nothing


of this magnitude before, we want to make it very clear that the industry


is ethical, have standards and wants to enforce them.


Bell Pottinger is very well-established, one of the world's


biggest, it has been around for a very long time, how can it get it so


wrong? Either they knew what was happening


and turned a blind eye, or their internal management processes were


so bad that a couple of road people could go off and do these things.


Either way it is not acceptable and that is why they are no longer a


member of the industry body. The cynical amongst us in journalism


were saying that this is how PR operates? It is not, that is why we


have expelled them. The vast majority of PRCA members are


ethical, professional, run their companies well and care about doing


the right thing. That is why we have expelled Bell Pottinger, they did


the wrong thing. That was France's Ingham, the


director-general of the PRCA. Let's take a look at some of


the other stories making the news. US aircraft maker Boeing has won


a long-running dispute The World Trade Organization has


reversed a ruling that Boeing received some state aid to help


build its newest aircraft, the 777. However, Airbus said "the game


is far from over" as other complaints over alleged aid


are still to be resolved. TalkTalk is exploring an exit


from its mobile operations, after opening talks with other


providers over the future TalkTalk been talking to rivals


Vodafone, O2 and Virgin Media, aiming to strike a deal


in the coming weeks. It's all part of a plan to overhaul


Talk Talk's business and focus on fixed-line broadband,


as it returns to its roots That was not TalkTalk, as you might


have noticed. First, Estonian start-up Taxify


to go head to head with Uber as it drives into London


with its taxi-hailing service today. Stephen, going on at Uber's


experience in China, I bet it is worried about the move in London?


At the moment people probably think in London Taxify, how can they


compete with Uber, Uber has such a massive presence there. I think


Taxify is in 25 cities, Uber is in 600. But now Taxify has teamed up


with another company. Around the world, in many countries, people


will never have heard of them. But they have in China. The company,


Didi, has 400 million users here. Didi took on and smashed Uber in


China, buying out Uber here. So Taxify has a very big back indeed.


To give you an idea of the presence in Didi, there is nobody else on the


scene here, it dominates. It has a virtual monopoly position in China


so its future is looking pretty rosy unless somebody comes along to


somehow challenge them. Thank you very much, Stephen in


Beijing. Let me run you through what the


markets are doing. Shares in Asia down


for the second day after North Korea's nuclear test -


with investors watching signs that the country could be preparing


another rocket launch, possibly an intercontinental


ballistic missile similar to the one But we saw bigger falls


on earlier missile tests, some suggesting that this just


becomes a new normal, rather than the unease we saw


when tensions first escalated yesterday didn't do much to boost


confidence either and today it's the turn of service data from Spain,


Italy, France and Germany but after a good start to the year


and some healthy July numbers we could also see some slight fall


off here too. More on that shortly,


but first Michelle has the details about what's ahead


on Wall Street today. When Wall Street re-opens, no doubt


refreshed after the holiday weekend, it will have some economic data


and some corporate The Department of Commerce releases


factory goods orders for July. Now, the report reflects demands


for goods from fridges to cars and even clothing,


giving investors a snapshot of the Many are predicting a drop in July


after climbing 3% in June. On the corporate front


Hewlett Packard Enterprise is expected to report


its third quarter results. Revenue at the tech giant could be


lower, a drop in sales of servers, networking and also at its data


storage equipment The company is led by Meg Whitman


who was one of the final three executives in the running to become


CEO of Uber. It is all happening. Michelle Fleury


is based in New York, of course. Jeremy Stretch is head of currency


strategy at CIBC World Markets. Good morning, nice to see you. We


had Labour Day in the States, we have had no steer from Wall Street


and markets are treading water a bit at the moment? Indeed, they are


oscillating a bit. We have the North Korean situation on the one side,


and on the other hand we are really seeing how markets are reacting to


the presumption about further interest rate moves in a number of


markets, a number of central banks making rate decisions this week.


There is the Federal reserve in the US, the central bank which dominates


everything else. Yesterday we had construction,


interesting in a sense that house-building was still doing OK


but it was commercial construction still a problem. In some respects


not surprising? It is not, but clearly there has


been a downdraught in construction sentiment in terms of institutional


commercial level, so the sector is back at the lowest level since last


August and businesses are certainly waiting for a degree of clarity on


the macroeconomic situation beyond just Brexit, it is certainly


bearable. That is causing the sector to


decelerate. The real kicker as far as sentiment in terms of the UK is


how the services sector plays out. It will be fascinating to see how


that stands up. And more European data coming out


this morning as well? How is the European economy doing? The Eurozone


economy is in a pretty good place, I suspect that will be reflected in


the language from the European Central Bank when they make their


own decision on Thursday, but Europe looks in a far better place. We're


not just seeing one economy or Germany leading the way but a much


broader economic expansion in the Eurozone which is quite


constructive. Strong growth across the piece, that is one of the


reasons why markets are looking to see what the European Central Bank


will do to start to pull back from its own monetary policy experiment


in terms of negative rates and its own quantitative easing. Helpful for


Angela Merkel heading to the polls? She looks to be heading to victory,


but it is not used who she wins bid to her coalition partner will be. --


it is not just if she wins but who her coalition partner will be.


Still to come: It's all in the cloud - this growing tech services sector


We ask a tech pedigree boss - who used head up eBay -


He has his head in the clouds! Definitely.


You're with Business Live from BBC News.


I love a cup of tea. I have probably had six this morning. That's water


in there this morning. We're buying less tea


than we were a year ago, but spending more on speciality


teas. That's according to industry stats


seen by the BBC today. So are we falling out of love


with the humble cuppa? Sean Farrington is at one


tea manufacturer this So this machine turns out 2,000


of these every minute and if you look at one of these big


reels, tea bag paper reel, it is not In a whole year, about


five billion tea bags are made in this factory,


but the bulk of it, just like the industry,


itself is original tea. That's what you can see


going into the boxes here, but on the whole,


that is what is becoming a little bit of a problem for the industry


because we're buying fewer back tea bit of a problem for the industry


because we're buying fewer black tea It's down about 5% on the year last


year which has meant Now, the way the industry has


adapted is by branching out because our tastes


are changing as well. So also in these figures out today,


we can see that sales have changed So you've got a lot more fruit teas,


a lot more herbal teas, we're spending more


on those and decaf teas which is why the likes of Taylor's


will be spending quite a bit of money upgrading this part


of the plant as well because they see the value


in increasing stuff like this. So it will be very interesting


how flavours change Will black tea be


able to hold its own? If there is one thing I've


learnt over this morning, is that however you make your black


tea, I have been told here, You put the water in first and put


the milk in afterwards. We were talking to Sean earlier and


he is getting a lot of top tea tips! Aveva to mench with Schneider


Electric. If you wonder what it does. It is this sort of stuff. It


makes 3D diagrams and processors in factories and warehouses. You don't


have to draw it by hand. Full details are on the BBC website.


You're watching Business Live. Our top story:


Rebuilding the bricks nations. China calls for closer ties of member


states to speed up economic development.


We will keep you across the developments as that bricks summit


wraps up and any headlines that come out of that, but let's talk about


cloud computing. Photos, videos, documents -


that you store on the internet Well, it's a booming market and it's


not just for storage. More and more IT services,


apps and software are stored New figures show the sector


is growing at about 18% a year and will be worth more


than $380 billion by 2020. Service Now is one of the world's


top ten cloud providers according to Forbes -


and it says it's on track to reach It's boss is John Donahoe -


who used to be eBay's chief executive, and is also


the chair at PayPal. You have sent in some questions.


Good morning. Welcome to the programme. Nice to be here. So John,


you're now in charge of Service Now. Just explain exactly what it does.


Service Now does at work what many of the consumer applications do at


home which is simplify our lives and make things easier, easier to work


and enhance your quality work. So how does it do that? Take a simple


example. One of the most frustrating things that can happen at work is


that you can't get into your e-mail. Right. You're on the road. You're at


home. You want to get into your e-mail. So you need to reset your


password. What would have been required, you would have to call


someone from IT and hope to get them on the fond and be put on hold and


wait for someone to come back to you. Now using Service Now you can


get your password reset. Simply when you need it to be done quickly and


easily. So it is simplifying what was complicated so you can have a


much better experience. Is this a case of consumer technology


overtaking what corporate technology can do? It strikes me in an


organisation like the BBC you painted that picture, if I want to


change my password, it takes me forever, I have to ring various


people and prove who I am. If I want to do it on my phone, it is easy.


They have to make sure that people aren't clicking on phishing links


and open to fraud and hacking and in an organisation like the BBC, that's


a prime target? But it is using the same cloud based technology. PayPal


is your personal information. Cloud technology has enabled you to pay,


do things like change your password if you need to safely on your mobile


phone. The same principles can be applied at work and until now you


didn't have software that enabled you to do that. Cloud based


platforms like Service Now enable the same kind of user experiences at


work as you'd get at home. Why aren't more businesses taking it on?


Is it a cost issue? Or a legacy issue? That's what is driving


Service Now's growth. That's why it is the fastest growing enterprise


company in the world over $1 billion. Companies are taking


advantage of cloud based platforms like Service Now to transform how


you operate at work starting with IT and HR and security and other areas.


Now, you moved from eBay to Service Now, is that right? Yes. You were


global Chief Executive, bid you take over from Meg Witman. EBay is a


company we have heard of. Service Now not. Why would you move from


eBay to Service Now? What's your thinking? I had a wonderful decade


at eBay. I took a year off and surveyed the industry, technology


landscape and I said where is the action going to be in the next five


to ten years. In the next five to ten years, it is applying technology


to our lives at work as we've been talking about. Service Now is


positioned to lead that transformation, to lead that


revolution. How do you feel about starting something brand-new in


Silicon Valley, having had a long career and a very, you know, well


established career, there is so many new companies coming up in Silicon


Valley run by guys in their 20s and 30s and women in their 3020s and


30s, do you ever feel, you know, I'm trying to think of the right word,


do you feel insecure about that? I doubt you do, but do you know what I


mean? Silicon Valley and technology are exciting innovation is happening


all the time. My particular focus however is in those technologies


that begin to break through. Service Now is one of the very, very few


enterprise software companies that have broken through $1 billion and


will reach $2 billion and the opportunity is enormous to take that


and have Service Now impact our lives at work, the same way eBay or


PayPal or Amazon or Google impacted our lives at home and that


opportunity exists and Service Now is one of the few enterprise


software companies in a world position to really capitalise on


that. All right. We will watch with great interest. Thank you John for


coming in. Nice to see you, John, thank you very much.


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


The Business Live page is where you can stay


ahead of all the day's breaking business news.


We'll keep you up-to-date with all the latest details,


with insight and analysis from the BBC's team of editors


Get involved on the BBC business live web page, bbc.com/business.


On Twitter, @BBCBusiness and you can find us on Facebook


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


You have been sending you your thoughts.


The BBC's Dominic O'Connell is with us.


A viewer says, "There is no such thing as a cloud, it is someone


else's computer." The really big player in the cloud, not many people


know it, is Amazon. Amazon global services division, it is its biggest


earner. It is big in the UK. It runs the big cloud operations and not


many people know that. Did you speak to Francis Ingham this morning? I


haven't. The BBC have been speaking to him at length. He is the head of


the trade body... He was on our programme earlier. I found that


having read the ruling, this is interesting, normally you expect a


ruling from what Dubs the industry regulator, it is just a trade


association, it should have evidence in it, but a high-level thing. It


says they infringe this guideline and that guideline. No smoking guns


in there. Thanks, Dominic. Welds you very soon. Bye-bye.


Good morning. We have got heavy rainfall this morning across


north-west England and western Wales.


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