08/11/2017 BBC Business Live


08/11/2017

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Transcript


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This is Business Live from BBC

News with Sally Bundock

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and Jamie Robertson.

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Scaling the Chinese Wall -

will the US President put past trade

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tensions behind him to win

the support in America's

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top trade partner?

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Live from London,

that's our top story.

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President Trump and the First Lady

have just landed in China and they

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have met president Xi.

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The nuclear threat posed

by North Korea is dominating

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the agenda but Mr Trump is also

expected to take aim at trade

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relations between China and the US.

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Also in the programme.

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Investor's patience snaps -

Snapchat is loved by

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teenagers but shares in its owner

plunged almost 20% in after losses

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in the struggling app trebled.

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The European trading day is under

way. Most of the share markets are

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headed higher. Our markets guest

will fill you in on all you need to

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know.

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And we'll get the inside track

on the all important

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inflight experience -

we've all had a bad or memorable one

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- so how do plane-makers deliver

what passenger actually want?

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We will hear from man whose job

it is to make the cabin

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a place you'd want to be.

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So today we want to know what's most

important to you when you fly?

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Let us know.

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Just use the hashtag #BBCBizLive.

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Hello and welcome to Business Live.

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I will soon be on a long haul flight

with three little boys. I don't

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think anyone can help me. I'm

dreading it.

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The leaders of two economic

powerhouses meet today.

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It was all smiles on the tarmac.

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US President Donald Trump

is in Beijing as part of a marathon

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Asia tour and is set to announce

billions of dollars

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in deals to address a trade

inbalance with China.

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China is America's largest trading

partner, but it's a tense

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relationship largely due

to a yawning trade gap,

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which means America buys more

from China than it sells to it,

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that was nearly $350

billion last year.

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Trump has bolstered his presence

with a team of corporate big wigs,

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including bosses of Goldman Sachs,

Boeing and energy firm Texas.

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He aims to sign deals that mean

China buys more US goods,

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from farming to energy.

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The Trump administration is also

threatening to impose import tariffs

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of around 20% on steel from China

and other nations, as it tries

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to adress a global glut

and protect its domestic industry.

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The US has already imposed

preliminary import duties,

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between 97% and 162%,

on Chinese aluminium foil,

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saying the goods are being sold

at unfair low prices.

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The US is also investigating claims

that China has stolen US

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intellectual property,

ignoring patent and copyright rules.

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Steve McDonnell is in Beijing.

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Steve, it has been a huge amount of

talk about war on this Asia trip.

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War on the Korean peninsula,

possibly, you never know and trade

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war with China. What's he been

saying? What are the chances the

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idea of trade war with China?

Yes,

well, of course, the two big

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subjects, you're right are North

Korea's nuclear weapons and trade

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relations on this trip to Asia from

Donald Trump. Now I think the

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message here, although we haven't

heard from him yet is going to be

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similar to what we heard in Japan

and South Korea which was that China

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and Japan and South Korea have

unfair trade relations when it comes

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to the United States. Now, there is

quite some debate about this and as

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we speak, Donald Trump is inside the

forbidden city. I guess initially it

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could be pleasantries and the like,

but they will be getting down to

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serious talks over the coming two

days and what we might expect, when

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the leaders meet, especially in

another country, they love to have

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an announceable in diplomatic speak,

keep an eye out where it might be an

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announcement about China investing

in the US in some way or some sort

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of a deal along those lines because

it makes it appear like there is

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some sort of movement on this

question of the trade imbalance that

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we were just speaking about.

What

does the Chinese president want out

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of this, do you think?

Well, I

think, you know, for him, of course,

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it is the same for Donald Trump,

these two countries so need each

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other when it comes to the economy

and it's why, you know, they are

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banding together also to try and

sort out the problem with North

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Korea's nuclear weapons because

China hates destabilisation. It

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wants things to be calm and steady

for trade and commerce and relations

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in the region. And that is a threat.

So it's also an economic threat when

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they are talking about the pressure

that North Korea is bringing to bear

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on other countries and so, yes, I

think both countries would like to

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see a much better flow of commerce,

but they do have their differences.

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I mean for example, there are all

sorts of industries here that

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foreigners, foreign companies cannot

invest in. You can't buy a Chinese

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cold mine for example or Chinese

steel mill and for many industries,

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unless you're doing it with a sort

of co-operation, joint venture with

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the Chinese outfit then you can't do

business in China. Other countries

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including the United States are

saying that's not fair because we

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let Chinese countries Chinese

companies come to our country and

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these are the things that they will

be trying to nut out.

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Let's take a look at some of

the other stories making the news.

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Shares in the owner of Snapchat have

plunged in after hours trading

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after the firm reported losses

of more than $400 million

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in the last three months.

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The company struggled to attract

new users and had lower

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than expected revenue.

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Snap says it is now working

to overhaul the messaging app.

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We will have more in a moment.

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Sky has suggested it is open

to shutting down its news channel

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in order to facilitate its takeover

by Rupert Murdoch's

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21st Century Fox.

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Fox already owns 39% of Sky,

but regulators are investigating

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the deal amid concerns that

Mr Murdoch's media empire

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could become too powerful.

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Twitter has doubled its tweet limit

to 280 characters in a bid

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to draw in more users.

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The company announced

an experiment in September

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which will now be rolled out

to users worldwide.

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The decision is part of plans to try

and boost engagement

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at the social network.

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Have you done it yet?

What?

Tweeted

more than 140 characters.

I think it

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is really important to have that

discipline of the 140 or whatever it

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was.

I have been waffling like mad.

It encourages wafflers. They say

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teenagers have become better at

writing because they are more

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concise. They put likes like U.

Never mind, that's just carping. I

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wanted the picture of groundhog.

You

are going to have to explain why it

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is there.

It is Groundhog Day for

marks and spender. We will be

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talking about M&S more in a while.

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Nissan has lowered its annual profit

forecast by almost 6%

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after a certification scandal forced

it to recall more than

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a million vehicles.

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The Japanese car-maker revealed last

month that unqualified technicians

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had been carrying out the

inspections of vehicles for decades.

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Leisha Santorelli is in Singapore.

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Tell us more about Nissan?

Well, Sally, this is a poor result

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for Nissan given its biggest rivals

Honda and Toyota just raised their

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profit outlooks when they reported

this. Is due to several reasons,

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sales in the US has not been doing

well. Nissan had to make

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compensation payments in the US for

cases by the faulty airbags. The

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biggest reason has to do with the

certification scandal, Nissan was

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forced to stop production for nearly

a month and six factories produce

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about 1,000 cars a day for the

Japanese market. That really hit the

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deliveries in October. So

reputationly, this is very damaging

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to Nissan's new chief executive

officer who took over in April and

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he promised to get to the bottom of

the mess, but the good news is

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analysts believe the certification

scandal at Nissan will only have a

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temporary impact on earnings so the

outlook past this next financial

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year maybe brighter since we have a

weakening yen.

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Toyota doing well today on markets.

Its shares up 1%. Japan as well

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closing up on the day, 23 points.

Nothing too dramatic, but a slight

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increase, but you can see across

Asia, it was a mixed day, if not a

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flat day. Let's look at Europe now.

Marks & Spencer. Their pre-tax

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profits down by 5.3%. The news that

their chief financial officer Helen

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Weir is going. We are not sure why

she is going, but a lot of changes

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at the top with the Director of

Clothing at MAS gone. M&S shares

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flat, but markets headed slightly

up. We will talk more on markets.

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Here is more detail on Snapchat.

Here's Samira.

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Snapchat had its best day nine

months ago back in March,

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when it first started trading

on the New York Stock Exchange.

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Its share price skyrocketed that day

by 44%, but since then it's

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been a steady decline.

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The business is not growing the way

investors had hoped.

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This past quarter, Snapchat's daily

active users only grew by 17%.

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They are facing some

stiff competition from

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Facebook-owned Instagram.

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Another big setback

has been advertising.

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Smaller advertisers still haven't

figured out how, or even why,

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they should advertise on Snapchat.

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Now, compare that to Facebook,

which made $10 billion

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from advertising in just

the last quarter.

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Snap execs have asked

for patience from investors,

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but just how long will they wait

before jumping ship?

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Time could be running out

for the little app that was built

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just five years ago by a couple

of kids in college.

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Joining us is Lawrence Gosling,

editor in chief of Investment Week.

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Good morning.

Good morning. It looks

like a bit of a disaster. I have to

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say. Talking about Twitter

increasing the number of characters

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as well, the pressure on Snapchat

looks humongous to me and difficult

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to see how they can innovate their

way out of this problem. Their

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losses are getting bigger. Market is

giving up hope on them and more

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importantly, they are not attracting

as many users. My children don't

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talk about it very much anymore.

Is

that because they are snapping and

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not talking to you?

No, they are

definitely talking to me! They are

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using different platforms to

communicate with their friends.

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Doesn't it emphasise the difficulty

you have now, coming under the radar

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and trying to get a place in this

market which is so dominated by the

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Facebooks and the Googles and the

Twitters?

You have got to come in

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with something that's truly

disruptive and something...

Then

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they just buy you out or copy you?

It is easy.

Facebook tried to buy

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them.

If you are a big company, it

is easier to buy it or copy t it is

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cheaper to copy in reality

particularly if you are buying a

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business with $400 million of

losses.

M&S...

Yes.

A lot going on

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there. The CFO, the Director of

Clothing has gone and profits going

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down and margins squeezed. It is

really difficult?

It is a bit like

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Snapchat, a horrible place to be.

New chairman, Archie Norman who has

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a great reputation for turning

businesses around, so not too much

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of a surprise to see senior people

going, but the bottom line is, their

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clothing offering is not one that's

universally popular. They have kind

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of lost focus.

But the money they

make on their food has been really

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squeezed?

That's the lesson of the

rest of the food retailers, the

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Tescos etcetera.

Laurence, stay

there, because we are going to talk

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about the papers in a while. See you

in a second.

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Still to come.

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What's most important

to you when you board an aiplane,

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being on time, comfortable seat

or access to the internet?

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One viewer says legroom.

Someone

else said landing!

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We ask the head of cabin services at

Airbus about the future of flying.

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You're with Business

Live from BBC News.

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And in the last hour

Marks and Spencer has

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revealed its half-year results.

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It used to be the darling of the

high street. It had a tough

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half-year.

S Pre-tax down 5.3%. News

that the retailer's chief financial

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officer, Helen Weir is stepping

down.

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Mike Ingram is the Chief Market

Strategist for WH Ireland.

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He joins us now from our newsroom.

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There seems to be a lot of things

going on at the top of the

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management. Is that a problem?

Yes,

potentially because of course, the

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business faces a lot of challenges.

The results that you mentioned

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weren't as bad as the market

expectation. We were perhaps looking

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for a 10% decline in profitability,

it was down 5.3% better like for

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likes in food and clothing, but at

the end of the day, costing

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pressures remain intense

particularly on the food business.

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Having spoken to the company a

little bit earlier on this morning,

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they are actually seem to be

throttling back on this huge Simply

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Food roll-out which they were

projecting only 12 months ago, again

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showing that the pricing environment

isn't favourable. Yes, the clothing

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margins came back somewhat. We were

expecting a 2% decline in like for

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likes. Is that going to be sustain?

The Director of Clothing and beauty

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left after #13407b9s 10 months and

it is the former Chief Executive of

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Halfords who is in charge of that

business now.

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What do you think the outlook is

like? We've got all that change as

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you've just mentioned. Stephen Roe

the boss has come up with his

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five-year plan. We've got the recent

introduction of Archie Norman.

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What's your outlook that M and S?

When Steve Rowe unveiled his

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turnaround plan about five months

ago he described it as fixed

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stabilise and grow. We were still

firmly in that fix stage. These

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results are rather better. But it's

very clear that they are scaling

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back on food and they need to

accelerate the clothing reduction.

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Thank you. Sorry to interrupt you.

Mike Ingram from WH Ireland. The

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energy company SSE says it is going

to merge with NPower.

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You're watching Business

Live - our top story.

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It is President Trump and the first

Lady. They have arrived in Beijing.

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They've met President Xi. Of course

the agenda is pretty packed. North

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Korea will dominate but trade is

also firmly on President Trump's

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agenda.

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A quick look at how

markets are faring.

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The European markets started just up

but not a huge amount.

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And now let's get the inside track

on airplane cabins.

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The industry is working hard

to improve the limited cabin

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space, at least in first

and business class.

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So, what do you see as the most

important areas for improvement?

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A more comfortable seat?

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Or is a great view your thing

and you want bigger windows?

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Or is it all about inflight

entertainment and connectivity

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To get an insider's view Ben met up

with Airbus' Vice President

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for Cabin Marketing, Ingo Wuggetzer.

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what we find out in market research

is they want the same product and

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services like they have on the

ground.

There should be a seamless

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transition if you are at home, at

work or on an aircraft. It should be

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the same experience, maybe even

better.

Are we seeing the days of

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getting on a plane where you were

out of contact for eight hours or 12

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hours, where you couldn't work

particularly productively, you went

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in contact with the office or

friends or family, those days are

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now over?

I think that's the choice

of the passenger. It really depends.

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If you can sleep, maybe you would

prefer that service. If you cannot

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sleep, and I think 90% of passengers

are still flying economy. They use

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in-flight entertainment or a

connectivity system to make their

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travel very individual, using those

applications they use at home.

What

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other things that are holding back

innovation as far as the airline

0:19:150:19:22

passenger experience is concerned?

There is some limitation on the

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technical side. You have to use some

satellites so the bandwidth might be

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not enough, not fast enough to serve

600 passengers on an aircraft for

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streaming applications and so one.

When you are considering what you

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put on your next aircraft, how do

you make those decisions? By the

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time you've got those aircraft in

service, the technology has already

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changed.

Exactly. The software is a

lot faster than hardware. That's why

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we approached our last aircraft as a

modular platform. That makes it a

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lot easier to cope with. You can

upgrade it.

Is there a danger that

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this innovation stalls? Airline

simply can't afford to put things on

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board any more.

Anything you talk

about aircraft, it's always

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expensive. You have to provide a

certain safety level. That is still

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something that people want.

Paint a

picture of what air travel will look

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like five years from now.

In terms

of the cabin, I think we find the

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same structure but a higher

segmentation. People have the same

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tube but the segmentation in the

aircraft will change. We'll probably

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find up to six different classes or

zones, whatever you call it. You can

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select a tailor-made product for

different market needs. This is a

0:20:540:20:57

strong trend that we've seen. In

terms of connectivity, I think it

0:20:570:21:04

will become really seamless.

Everybody can use their phone easily

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and will connect automatically. We

also find a lot of opportunities in

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modern cabins to customise your

experience. You will have a lot of

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LED lighting that will create a

spaciousness but also customised

0:21:180:21:23

mood experience.

Tell me about ten,

15, 20 years. What are you working

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on now that will take that amount of

time but you've already got an idea

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of how it will look?

My future

vision, for future travel, to be

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honest, so you are sitting in an

aircraft that has a transparent

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skin. You can look outside, enjoy

the space around you, feel great

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about that, and then have a seat

that moves with your body. That's

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the most comfortable seat you can

get. You can also get some help

0:22:010:22:07

treatment on the trip so you can

arrive healthier than you started.

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That was the Airbuses vice president

talking and we asked you what was

0:22:140:22:20

most important to you when you're on

a plane.

Ben says non-reclining

0:22:200:22:29

seats and power sockets.

Somebody

said simply landing, getting there.

0:22:290:22:37

Window seat...

Where do you normally

sit? I'm always near the toilet and

0:22:370:22:45

it's always smelly.

I was near the

door. They tell you that you have to

0:22:450:22:51

help out if gate-crash!

How did you

get a seat near the door?

I've got

0:22:510:23:02

long legs!

We need Aaron, you always

sits at the front I'm sure of it. We

0:23:020:23:07

are going to talk about this story

which is interesting to us being in

0:23:070:23:11

the world of telly. Sky threatening

to close at Sky News if the fox deal

0:23:110:23:17

is blocked. I feel like this has

been going on forever. Sky's

0:23:170:23:23

attempts to get full ownership of

the company.

It has and it feels

0:23:230:23:27

like they are chucking the kitchen

sink into making the market

0:23:270:23:32

authority feel comfortable with the

deal. I suspect Sky News doesn't

0:23:320:23:35

make much money for Sky. From a

commercial perspective it would

0:23:350:23:41

probably work but that's not good

for viewers in the UK looking for a

0:23:410:23:46

wider set of news channels.

He says

get rid of it, close it down. He's

0:23:460:23:50

not going to sell it off which would

be different. It is a threat to the

0:23:500:23:54

UK is saying you're going to have

one less major news channel.

Yes,

0:23:540:23:59

and the criticism against Sky is

always that they have too much

0:23:590:24:04

monopolistic media power. Take away

a news channel and arguably other

0:24:040:24:08

organisations fill that void.

Just

to give our international viewers

0:24:080:24:15

perspective on this, they may not

realise to what extent this

0:24:150:24:19

organisation dominates the media in

the UK. It's not just broadcast but

0:24:190:24:24

it's also many print, but then that

has reduced.

Yes. Obviously the News

0:24:240:24:36

of the World is no longer. It is a

big organisation. The football right

0:24:360:24:41

through the Premier League has grown

through Sky's distribution of it.

0:24:410:24:47

It's an incredibly important

company.

And their political

0:24:470:24:50

influence through print newspapers

is a lot less than it used to be.

0:24:500:24:53

Absolutely, because the world is

going more digital. Some of their

0:24:530:24:57

print titles haven't transition does

well.

You could argue that they

0:24:570:25:02

having kept pace in the digital

world.

No, because it is a difficult

0:25:020:25:10

migration to take a classic

newspaper reader over to the digital

0:25:100:25:13

world.

When you're on a plane, the

most important thing?

Decent

0:25:130:25:18

lighting so I can read. Also I would

be with the number climbing feats

0:25:180:25:22

because it's the bane of my life

when someone pushes the seat right

0:25:220:25:25

back.

You can recline your stock

macular

Nottage lost that right at

0:25:250:25:32

the back!

LAUGHTER

-- not if you're

sitting right at the back.

There's

0:25:320:25:46

nothing worse than spending however

many hours with your knees up by

0:25:460:25:49

your chest! Thank you for coming in.

0:25:490:25:59

Thank you for your comments.

0:25:590:26:00

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