:00:03. > :00:13.the headlines from BBC World News. Time for the latest money news.
:00:13. > :00:15.
:00:15. > :00:20.Here is Alice and World Business Hello. Welcome to World Business
:00:20. > :00:30.Report. I'm Alice Baxter. Trouble for the global economy. China
:00:30. > :00:34.reports the slowest growth in more than three years. And in Singapore
:00:34. > :00:40.growth more than expected in the second quarter. We'll hear more
:00:40. > :00:50.about the disasterous trading strategy at JP Morgan Chase, it
:00:50. > :00:50.
:00:51. > :00:55.cost the bank at least $2 billion. China's economy is experiencing the
:00:55. > :01:00.sharpest slowdown since the global financial crisis in 2008. Figures
:01:00. > :01:05.out Friday showed that the annual pace of economic growth slowed to
:01:05. > :01:10.7.6% in the 3 months to the end of June. In the previous quarter
:01:10. > :01:15.growth was running at 8.1%. The Government has been trying to
:01:15. > :01:18.revive the economy by lowering interest rates and lifting spending.
:01:18. > :01:25.Private sector firms have been seeing a fall in sales and are
:01:25. > :01:31.cutting back on staff. One simply tom at the slow down is because
:01:31. > :01:37.stockpile of coal has been building up at its ports. If you want a
:01:37. > :01:43.symbol of China's economic slow down, this is it. We are here home
:01:43. > :01:48.to China's biggest coal port. It is from here that Cole is transported
:01:48. > :01:54.in ships to the power plants across the country to fuel China's
:01:54. > :01:59.economic boom. Analysts say the demand for coal is dropping and
:01:59. > :02:03.dropping fast. Huge mountains of coal that you can see here has been
:02:03. > :02:09.growing higher in recent months. It was a clear indication that China's
:02:09. > :02:14.economy was slowing. Analysts say stock piles reached record levels
:02:14. > :02:20.with 8 million tonnes of coal stored. That's happening because
:02:20. > :02:28.China's factories are cutting back in production. The last sign that
:02:28. > :02:34.this happened was back in 2008. When the global financial crisis
:02:34. > :02:38.struck. That was a report from Singapore. Michael is a Professor
:02:38. > :02:43.of finance at Peking university. Thank you for being on the show.
:02:44. > :02:47.How worried should authorities in China be about this. Growth is
:02:47. > :02:52.slowing. They've been trying to boost the economy by cutting
:02:52. > :02:57.interest rates. Will they redouble their efforts, do you think? Yes, I
:02:57. > :03:07.think they will. I think we are likely to see and already are
:03:07. > :03:07.
:03:07. > :03:13.seeing an increase in loans, and moving attention towards ajustments
:03:13. > :03:19.etc. The problem is a slowdown in growth is a necessary component of
:03:19. > :03:23.rebalancing the economy, which the authorities urgently want. So my
:03:23. > :03:27.suspicion is because this was the leadership transition year. We'll
:03:27. > :03:32.probably see them step on the accelerator more, growth in the
:03:32. > :03:36.second half being better than the first. That doesn't solve the
:03:36. > :03:41.problem, it postpones the problem. We have a once in a decade
:03:41. > :03:45.leadership change due later this year. Realistically, what can
:03:45. > :03:54.authorities actually do in China? Surely the real problem here is a
:03:54. > :03:58.slowdown in Europe and sluggish US growth. The two biggest exporters
:03:58. > :04:02.for China. Well, I don't think that's the biggest problem in China.
:04:02. > :04:07.The problem is that those things are happening at the wrong time.
:04:07. > :04:12.The biggest problem in China is we have been overinvesting through
:04:12. > :04:18.many years in projects whose economic value does not justify the
:04:18. > :04:23.amount of the investment. You have to bring investment levels down in
:04:23. > :04:27.China. Since is the main source of growth, as you bring levels down,
:04:27. > :04:32.growth slows down. The fact that this is happening at the wrong time,
:04:32. > :04:36.while the US is slow and the Europeans are going through a
:04:36. > :04:41.crisis makes everything much worse. Michael, Professor of finance is
:04:41. > :04:45.the Peking university, thank you for joining us. There's been gloomy
:04:45. > :04:52.economic news from Singapore as well this morning. The economy
:04:52. > :05:00.shrank an annual rate of 1.1% in the second quarter. Our
:05:01. > :05:05.correspondent is in Singapore. Is this a surprise? It is, indeed.
:05:05. > :05:10.There were expectations that it would expand marginally in the
:05:10. > :05:14.second quarter. All of this is a sign of how much the slowdown in
:05:14. > :05:20.Europe and the anaemic growth in the US is hitting trade in this
:05:20. > :05:25.economy, which is reliant on trade. The EU is Singapore's largest trade
:05:25. > :05:30.partner, and trade makes up a great portion of growth numbers. It was
:05:30. > :05:36.really the manufacturing sector that took a hit, down 6% from the
:05:36. > :05:41.previous quarter, due to a drop in biomedical production, coming amid-
:05:41. > :05:47.a day's bigger story that you have been reporting, that China saw its
:05:47. > :05:51.lowest growth in three years. China was one of the biggest drivers of
:05:51. > :05:58.Singapore's export growth. There were some bright spots, we saw
:05:58. > :06:03.gains in the service sector growing marginally. Thanks for that.
:06:03. > :06:08.Exactly how many billions of dollars did JP Morgan lose when
:06:08. > :06:11.trades went bad earlier this year? Investors will hope for an answer
:06:11. > :06:18.to that question when the bank releases results for the three
:06:18. > :06:24.months to the end of June, losses estimated at $2 billion caused the
:06:24. > :06:27.departure of the chief investment officer and triggered an
:06:27. > :06:31.investigation. Jamie Diamond, JP Morgan's Chief Executive is getting
:06:31. > :06:37.used to being in the hot seat. you too big to fail? No, we are not
:06:37. > :06:42.too big to fail. We belief that a bank should be bankruptable. That
:06:42. > :06:48.was him grilled by US law-makers. This Friday shareholders will be
:06:48. > :06:52.asking the tough questions, keen to know how much America's biggest
:06:52. > :06:58.bank lost on bad derivative trades. Whatever the figures, the damage
:06:58. > :07:02.has been done. The size of the loss is not the issue. The issue is why
:07:02. > :07:07.did they miss the loss in the first place. It raises a question of are
:07:07. > :07:12.the banks too big to manage, regulate and fail, and too big to
:07:13. > :07:18.understand. The trading loss may seem like another example of risky
:07:18. > :07:24.behaviour by an investment bank. There's a key difference. JP Morgan
:07:24. > :07:27.is going after the pay of the group where the losss occurred, starting
:07:27. > :07:33.with the head of the investment office who worked here. This makes
:07:33. > :07:38.it the first major banks since the financial crisis to penalise its
:07:38. > :07:43.staff in this way. The claw backs are symbolic. They are designed to
:07:43. > :07:48.send a message to the market, which has been troubled by the fact that
:07:48. > :07:53.a few individuals can cause such a precipitous market drop in the
:07:53. > :07:59.value of JP Morgan. I think this is to say to the market "Look, we'll
:07:59. > :08:07.penalise people who do bad acts". This Friday, the 13th, JP Morgan's
:08:07. > :08:11.horror show is unlikely to end with regulate investigating other
:08:11. > :08:17.potential missteps by the bank. BBC investigation has raised
:08:17. > :08:23.questions about the effectiveness of advertising on Facebook.
:08:23. > :08:28.Companies spend money to attract Facebook users. A report by our
:08:28. > :08:36.correspondent found some responded to other adverts. Facebook said
:08:36. > :08:43.Rory's example does not work, because it was poorly targeted. His
:08:43. > :08:50.credit -- Moodys cuts rates concerned about euro leading Greece,
:08:50. > :08:56.it could have an knock-on effect to Italy. Praises fell 5r' in New York
:08:56. > :09:02.trading, -- prices fell 5% in New York. Trade fell 18% in the second
:09:02. > :09:08.quarter compared to the same period last year. Trade blamed a slowing