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This is Business Live
from BBC News, with Sally
Bundock and Ben Thompson.
Bundock and Ben Thompson.
And shakes and trade deals. --
The UK Prime Minister
begins her three-day visit to China.
Business is top of the agenda.
Live from London,
that's our top story
on Wednesday 31st January.
Theresa May has arrived in China
at a crucial period for the UK.
We'll be asking a leading expert
about the future relationship
between the two countries.
Also in the programme.
Just how "great" is
the American economy?
We weigh up the reaction
to President Trump's State
of the Union Address.
And January has
been the best month on record
for global financial markets.
Today, we look ahead to the Fed.
Is this the
end of consumerism?
New research confirms young people
are buying fewer things,
but choosing to live
new experiences instead.
So how is business
adapting to the change?
We meet the boss of one
with a bit of a difference.
So we want to know,
are you buying less stuff.
Are you spending less time
in the shops and more time
in restaurants and cinemas?
Let us know.
Just use the hashtag BBCBizLive.
Hello and welcome
to Business Live.
We hope you enjoyed this experience!
The UK Prime Minister Theresa
May has announced new education
links with China as she arrives
for a three-day visit to boost trade
and investment after Brexit.
She has claimed her visit
"will intensify the golden era
in UK-China relations".
But she also stressed
China must adhere to free
and fair trade practices.
Trade between the two
is already worth more
than $80 billion and the UK's
trade secretary Liam Fox
says that exports to China
increased by over 25%
in the last year alone.
But the talks are about
more than just trade.
The two sides will want
to ensure that investment
between the two countries is both
fair and transparent.
have been pursuing huge
international expansion plans,
with investment in the UK more
than doubling in 2017.
Matthew Rous the Chief
Executive of China-Britain
business council joins us.
Thank you for joining us. Theresa
May has already announced new
education links with China. All well
and good but should we be aiming
higher? Should there be a bigger
trade deal in place rather than just
a relatively small-scale education
link which is useful but it's not
going to help a lot of businesses?
We are aiming high, my company is
aiming high and the UK is aiming
high as well, this visit will help
build momentum towards a free trade
agreement in the medium-term. But in
the meantime, there are gains to be
made. This visit will usefully build
It is all about small
steps, I suppose. You have
highlighted it there and Theresa May
has made very clear it must be our
shared objective over the coming
years, suggesting this isn't about a
big announcement but about lots of
handshakes and meetings like this
and lots of gatherings to try to
improve relations on a day-to-day
Sometimes it is Big Bang but
generally speaking, China is a long
game for UK business. As an
organisation, we've been never 65
years, helping companies to make
success, to achieve success in a big
and challenging market in many ways.
But various such a thing as
Brailsford's law, fans of British
cycling will know you accrue the
incremental gains one by one and
that applies in business as well and
we want to see good things coming
out of this.
The British delegation
is about 50 or so people with
Theresa May, not the biggest but at
the same time important in terms of
who is there, we know Jaguar Land
Rover and firms like BP are there,
well and good for big firms but what
about small business?
quite a diverse delegation. The
government has done a good job in
assembling a mix of companies large
and small from different sectors and
there are some new faces there and I
think that is welcome as it helps to
put new people in front of Chinese
audiences and to showcase everything
we do. As China gets older and
richer, the UK's offer in terms of
world beating financial services,
health care and consumer goods is
But it's not without
controversy, though, particularly
when it comes to things like steel
exports from China, a lot of
manufacturers say it is done too
cheaply and locked them out of the
market and lots of concern about
Chinese technology involvement in
things like Hinkley Point. Will she
address those on this visit?
we can be proud of the fact that
Britain is one of the world's most
open economies and we have been very
open to Chinese investment in key
But can Theresa May have
tough talks with the Chinese without
jeopardising the investment?
part of a mature conversation
between two long-standing partners.
So yes, is my answer, I would not
expect it to dominate but she will
be looking to get the point across.
We will watch and wait and see what
is announced. Thank you for joining
Let's take a look
at some of the other
stories making the news.
Fujifilm is to cut a fifth
of its global workforce -
that's around 10,000
jobs, blaming a decline
in the photocopying business.
Fujifilm owns 75% of the joint
venture, called Fuji Xerox,
which accounts for nearly half
of the Japanese company's
sales and profits.
It comes as Fuji film looks set to
take over Xerox.
Workers in Germany have
begun a series of 24-hour strikes
in a row over pay and working hours.
The powerful Ee Gay Metall union has
called on its members to down tools
for the rest of the week.
The union is demanding an 8% pay
rise and shorter working hours
for 3.9 million workers.
Samsung has reported
a record 73% jump
in its fourth quarter profit,
to $11.4 billion.
That was mainly driven
by demand for its memory
chips and display panels.
The South Korean giant's shares
surged more than 8%,
after suggesting the outlook
for the memory sector
is forecast to remain strong.
Donald Trump has given his first
State of the Union speech,
where he outlined his achievements
during his first year in office.
One hour and 20 minutes, that is how
long it was. I listened to the whole
The US President also
reiterated his stance
on international trade -
here's what he had to say.
The era of economic surrender is
totally over. From now on, we expect
trading relationships to be fair and
very importantly, reciprocal.
We will work to fix bad trade deals
and negotiate new ones and they will
be good ones but they will be fair.
We will protect American workers and
American intellectual property
through strong enforcement of our
Our Asia Business
Correspondent Karishma Vaswani
is in Singapore for us.
It interesting, talking about trade
but not a lot of detail.
I think it
would be fair to say there was not a
lot of detail in many aspects of the
President's speech today but the
State of the Union is all about
laying out an agenda for the next 12
months or so and President Trump
certainly did that and when it came
to trade, as you said, in the clip
you have just run for the audiences,
he's repeated some of the things we
have heard before so many times, he
wants free trade, fair trade,
reciprocal trade, some of his
favourite words when it comes to
talking about trade policies. What
we did not hear however is that he
was not as hard on China as many had
expected him to be. Ahead of the
State of the Union, there were lots
of comments, lots of expectations,
certainly from people out in the
Asian business community that
perhaps we would see some hard
policy moves on China with regard to
intellectual property, the
investigation of the US has launched
an China, or something even on steel
and aluminium tariffs, especially
after he slapped tariffs on solar
panels and washing machines last
week, which we have talked about
before. But beyond saying that he
wants trade to be fair and
reciprocal, that he will get out of
bad trade deals, no specifics so far
on what he is actually going to do
with China. Many of the Asian
businesses I have been speaking to
our breathing a sigh of relief
because for now, at least, but not
for long, but because as one member
of the Asian trade business
Association in Singapore told me
does not mean there is not a trade
war on the horizon because it was
not mentioned in the State of union.
We should that warning. So the
Twitter or teleprompter president
delivered his State of the Union
address and we will talk more about
that in a minute but let's look at
the market. Japan down by 0.8% at
the close. Some of the key losers,
like Fuji film, one of the big
stories, Hong Kong bouncing back
after slides across the board on
Wall Street the night before. We are
in the midst of the Federal Reserve
meeting. The last one presided over
by Janet Yellen as chair. We will
talk about that in a moment. January
in Europe has proved to be the
strongest month on record -- January
on record for global financial
markets but some profit-taking going
on around the world, the Footsie
down just a touch having opened, but
gains in Europe and Stirling
bouncing back today against some
guarantees. Let's look ahead to the
day on Wall Street.
Yogita Limaye has the details.
It's a big day for
corporate results here.
Technology giant Microsoft
is expected to report a strong
performance as is Facebook.
Investors will be waiting to hear
how the new tax bill will impact
earnings in the months ahead
for the two companies.
Meanwhile, profits are
expected to have risen at
Boeing because more people
are choosing to travel by air.
Wall Street will be watching
for comments on the trade battle
with Canada's Bombardier,
which Boeing recently lost,
and they will also be looking
for more details of
the company's proposed tie-up
with Brazilian firm Embraer.
Telecoms company AT&T
and chip-maker Qualcomm,
will also be releasing earnings.
And we will be hearing
from the Federal
Reserve as well which will conclude
its monetary policy meeting today.
Rates are not expected to be changed
but it will be interesting to see
what the committee makes
of the slightly lower than expected
growth rate in the last
quarter of 2017.
We were just chatting about Janet
Joining us is Mike Amey,
Managing Director and Portfolio
Manager at PIMCO.
Good morning. Let's stay in the US
because we saw pictures of Janet
Yellen, her last Federal Reserve
meeting in charge but she's had a
pretty good run, held a steady ship.
A very good run, yeah, she's
achieved a number of things, one is
the US economy continuing to do very
well and she should take some credit
for that. She has also managed to
get interest rates away from
effectively zero and that, a couple
of years ago, was a very big deal.
It was uncertain whether they would
be able to raise rates and there
would not be problems somewhere in
the system and she has achieved that
well. She's done a good job.
also the massive quantitative easing
experiment, she has kind of got the
US economy off the intravenous drip
and she has done it without any
tapered tantrums that we saw
They learned from
previous experience and the
so-called template -- taper tantrum
way you got volatility was all about
market is being surprised but now
they have been making it very clear
they will be slow about it and the
rate rises, for example, it has
taken in two years to get up to 1.5%
from 0.25%, it's been steadily done
which has been the right thing as it
has turned out, so good job.
word on the state of union, we heard
Donald Trump talking about trade
earlier but he was also very keen to
point out the tax cut that he says
has handed business a big boost and
lots of infrastructure spending and
US business will like that. It looks
like the theme going forward is
The tax cut
gave the stock market a boost at the
year's end and they are looking to
the midterms at the end of this year
so we will hear more about
infrastructure but as we know,
getting infrastructure spend done is
difficult and takes time and he's
trying to do what other countries
have done which is in gauge the
government and the private sector
and that can be a very difficult
combination, as we know. -- is
engaged the government.
learn the lessons from Carillion.
Still to come...
Tapping in to the $1 trillion
We meet the entrepreneur
putting on virtual reality
That is what these pictures relate
You're with Business
Live from BBC News.
The number of cars made
in the UK fell last year
for the first time since 2009.
Lower demand is partly to blame,
according to the Society
of Motor Manufacturers and Traders.
It's just released
the latest figures.
Chief executive Mike
Hawes joins us now.
So tell us a bit more about how
things have gone.
Over the past
year, production output from UK car
manufacturing plants fell about 3%,
primarily due to a drop in demand in
local markets, so basically cars
built in the UK for UK customers.
What we have seen is slowing growth,
declining business and consumer
confidence which has affected demand
last year, as has a lot of the
confusion in the UK around potential
diesel changes that the government
is looking to make. But both of
those factors together and it's
depressed new car registrations last
year which has a knock-on effect on
production as well.
But coming from
a pretty high level, every time we
speak to you it has done a story of
sales and new registrations going up
but at the same time, a lot of
concern about financing deals,
people able to get cars cheaply but
you end up with a flood of
second-hand cars in the market would
ultimately affects new-car sales.
Potentially but what has been very
encouraging is the residual value of
the second-hand car market has been
very strong and second-hand values
have held up which is good for the
finance packages that are available.
There has been a degree of
examination of the finance
arrangements but essentially, they
are delivering what the consumer
wants and that is enabling the
consumer to purchase a car or at
least effectively lease one third or
four years and at the conclusion of
the lease, they can flip into a new
one, had the car back or pay a bit
more to own it outright and that is
very attractive, it is just the
changing nature of the new-car
Thank you for joining us.
OK, Mike, thanks.
boss of the company, Ellipsis
Entertainment. And polenta is in
trouble over possible insider
trading, so there will be updates
you the Business Live page. You can
find out more on the website.
You're watching Business
Live - our top story:
UK Prime Minister Theresa May has
announced new education links with
China as she begins her three-day
tour of the country. Of course she
is looking to boost trade and
investment after Brexit. She has
claimed her visit will intensify the
golden era in UK and China
relations, but she has also stressed
China must agree to free and fair
trade practices. Claims of steel
exports being dumped earlier.
We are in the grip of
a spending revolution,
with the rise of the so-called
That's where people are spending
more cash on doing things -
like going to concerts -
than buying objects like
clothes or gadgets.
It's being fuelled by the changing
tastes of millennials.
Research in the US suggests
78% of young people
would rather buy access to an event
or experience, rather
than buying objects.
The same study says that more
than half of millennials
are spending more on events and live
experiences than ever before.
And that's good for business,
and our next guest.
His company - Ellipsis Entertainment
- is planning to stage innovative
theatre events using virtual reality
and augmented reality.
He's already managed to raise around
$4.5 million in investment to stage
the first event in London in March.
Andrew McGuiness is the boss
of Ellipsis Entertainment
and joins me now.
This event in March was your big
idea. Can you just explain how it
We are bringing together
technology, virtual reality,
augmented reality, with theatre, so
we have large-scale sets with
actors, 20,000 square feet, so very
large spaces, together with the
physical aspect, and it is bringing
together of those things, the kind
of layering if you like of those
different experiences that makes
Who is the customer for
this? Are we talking about those
millennial is we just mentioned
They will be a big part of
it, you know. They are very keen to
have new and experiences. They want
to have both those expenses with
their friends but also to share them
with the wider community to show
they have had them. But the truth is
this data is focused on millennials
but many of us... I want to buy less
stuff, I want to do things I
remember, and really what we're
trying to do is create really
memorable experiences for people. It
might just explain how this works.
As you were saying to me earlier in
the green room -- so can you just
explain how this works?
mass of warehouse with real actors
and you go on a bit of a journey, a
bit of story -- you are in a massive
warehouse. Some of it is physical?
Is that right?
Yes, you go in groups
of six, how you travel through it,
and it is a big physical experience
and some of it is fairly invasive,
like virtual reality, incredible in
terms of what it can deliver, but
then we are combining that with
actors and sets to make it much
richer, but we are also using other
technologies, so other things people
may not have experienced at all.
is £50 for a ticket?
Yes, for 90
minutes, to two hours, the whole
experience. The equivalent of going
to a West End theatre but for a new
generation of people looking for a
the cost, we constantly hear young
people have less money in their
pocket because it is harder to get
on the housing ladder and everything
is costing more, European student
loans, although what sort of thing.
Does that worry you? As a business
that target young people, that they
have less money? -- you are paying
Of course we would
love people to have more money in
their pocket but what we have on
from research is they prioritise
these experiences. They are willing
to spend it, partly because they
can't have other things in their
lives, so they may not have a home,
a car, some of the things I may have
aspired to have in my 20s but it is
a choice they are having they want
to spend the money on experiences
rather than that staff.
being located in London where you
are launching this, I know you have
global ambitions, New York,
Singapore etc, but you are also
banking on the tourism market,
Irish? It is a catchall in a city
like London? -- you are banking on
the tourism market, I assume?
the website gives you an idea of
what the experience is like.
just throw that one in?
It is my job. We will get tourists,
but this is for the people of
London, and we want to do something
that particularly the young people
of London love and deliver them some
you. Good luck with it and let us
know how it goes. Andrew McGuiness,
director of Ellipsis Entertainment.
Lots of you getting in touch with us
about this. We spoke about this at
the start of the programme, spending
less money on stuff and moronic
abuses. Here is one. The only stuff
I need is a stack of photos from the
awesome places I have been.
Experiences overstuffed any day --
spending less money on stuff and
more on experiences. Lots of you are
getting in touch. Here's another
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Mike is back, as promised. And they
said not a day goes by when we don't
talk about crypto currencies, and we
don't want to break that rule so we
are talking about it again. Facebook
is banning ads for Bitcoin and other
Facebook trying to respond to some
of the alleged misinformation going
through Facebook and of course the
volatility and uncertainty over
crypto currencies so I think they
catch two with one decision.
also because of the anonymous
nature, crypto currencies can be
used for money-laundering and that
kind of activity?
Yes, that's right.
The challenge with crypto currencies
if you are in authority is to know
where they are going, and that is
one thing they are aware of.
it is no big deal for Facebook
because the amount of advertising on
their platform, Facebook and Google
between them get over half of global
ads on their platform.
I think that
is right and a lot of crypto
currencies have questions in other
ways because of the volatility of
the prices, so probably a relatively
cheap one for them. It lets talk
about this story in the Telegraph.
This in terms of the diesel
emissions issue. German
manufacturers with blood on their
Yes, one of the chief
scientific advisers who was in the
job when diesel cars and engines
were perceived as being the best for
the environment, and of course now
we know, we have the emissions
scandal, and get more information
coming out now with Volkswagen and
one or two match of the other German
manufacturers allegedly using
unfortunately monkeys to create
potentially miss information on the
amount of diesel emission, so sadly
this story just keeps coming and
unfortunately doesn't get any
You say that, but it was not
that long ago Volkswagen released
its sales and profits numbers,
really strong, and everybody
thought, it has drawn a line, but
clearly not. The headlines keep
Obviously it is costing them
financially in fines, but the things
they are really worried about, VW,
is getting the car sales back up
again so I would say they would be
saying this is not welcome news, but
the fact they have car sales are up
for them is clearly helpful,
Yes or no map,
buying more staff, are less stuff
and bought experiences?
sets in a big warehouse, with iPod,
what do you think?
I'm more into
Live concerts? -- with a pod.