:00:01. > :00:11.headlines from BBC World News. Now for the latest financial news with
:00:11. > :00:16.
:00:16. > :00:19.Alice Baxter and World Business Inflation in China hits the lowest
:00:19. > :00:25.level in 2.5 years. Will that prompt more stimulus from the
:00:25. > :00:35.government? Jaguar Land Rover - a UK success story, but cannot it
:00:35. > :00:40.
:00:40. > :00:45.With sluggish growth in Europe and the United States, economists are
:00:45. > :00:50.looking to China to pull the global economy out of the doldrums. And
:00:50. > :00:54.the latest economic report from China is encouraging. Consumer
:00:54. > :00:58.price inflation fell to 1.8% in July - the lowest annual rate in 30
:00:58. > :01:00.months. Inflation has been a key concern for Chinese officials. But
:01:00. > :01:06.the decline over the last few months will, perhaps, allow them
:01:06. > :01:08.room to boost growth. From Beijing, I'm joined by Qian Liu, who is the
:01:08. > :01:18.Deputy Director for China Forecasting at the Economist
:01:18. > :01:20.
:01:20. > :01:27.Intelligence Unit. Will Chinese policy makers capitalise on This
:01:27. > :01:33.deceleration of price rises to boost the economy? A good question.
:01:33. > :01:41.We have seen the 1.8 is a 30-month low. If you look month-on-month
:01:41. > :01:48.a three-month consecutive negative territory for month-on-month CPI
:01:48. > :01:54.inflation. This month is 0.1% positive. This does give the
:01:55. > :01:59.government plenty of room to consider the cut in both interest
:01:59. > :02:03.rate and reserve requirement ratio. I would argue it is not necessary
:02:03. > :02:07.for the government to cut down interest rates, because of the
:02:07. > :02:15.government still aims at 7.5 GDP growth, we are confident it will be
:02:15. > :02:20.able to happen. What sort of measures might policy makers be
:02:20. > :02:27.considering in order to boost growth? Some speculation we could
:02:27. > :02:32.see the tiny central bank lowering lending reserve requirements again?
:02:32. > :02:37.I would not exclude the possibility of further requirement ratio cuts.
:02:37. > :02:41.I would emphasise I am not excluding the possibility of an
:02:41. > :02:45.interest rate cut but it will not be necessary. The Chinese
:02:45. > :02:50.government is a risk adverse at the moment. The global outlook is very
:02:50. > :03:00.weak. The political change of guard means the government needs to be
:03:00. > :03:01.
:03:01. > :03:05.very careful to maintain its minimal % growth. If Europe
:03:05. > :03:10.collapses, the government can easily was -- reverse its very
:03:10. > :03:18.tight control over the property market. He mentioned the official
:03:18. > :03:22.growth target of 7.5% in 2012, who has been an economic for China in
:03:22. > :03:29.the last six quarters, is the economy still on track to meet that
:03:29. > :03:34.target? Absolutely. Even though 7.5 is the government target, usually
:03:34. > :03:39.there is very little linkage between what is the actual number
:03:39. > :03:43.and the government target. At our unit we are looking at a 0.1%
:03:43. > :03:48.growth for 2012. We believe for China now days, even though
:03:48. > :03:53.external demand is weak, the domestic market is very important.
:03:53. > :04:02.We think the second quarter is already the bottom and it will pick
:04:02. > :04:07.maker Jaguar Land Rover announces its latest results in the next few
:04:07. > :04:10.hours. Under its Indian owner, Tata Motors, Jaguar Land Rover has
:04:10. > :04:20.become the UK's most profitable car-maker, creating 8,000 new jobs
:04:20. > :04:28.
:04:28. > :04:33.in the last two years. But for how Jaguar had its first public outing
:04:33. > :04:37.last month and we had a glance at the amazing speed at which this
:04:37. > :04:43.company continues to grow. Can cells keep increasing when so many
:04:43. > :04:46.markets are slowing? One of the country's answers to that is to
:04:46. > :04:56.constantly re- stock its showrooms with new cars and new technology.
:04:56. > :05:01.on sale last September. On the Jaguar side, they are planning a
:05:01. > :05:05.replacement and a compact car which will compete with the BMW 3 series.
:05:05. > :05:09.The company is boasting it will produce 40 new models of the next
:05:09. > :05:15.five years, five years, including this new Land Grover and next month and
:05:15. > :05:24.all new land -- Range Grover. Carbines in recession-hit countries
:05:24. > :05:33.are still moving towards luxury brands. -- car buyers. In the UK, a
:05:33. > :05:41.greater share of the market has been taken by premium brands. There
:05:41. > :05:46.is no -- we can continue at the same rate of growth. 1,100 new jobs
:05:46. > :05:52.were announced at the stage upon last month in return. Agreeing to
:05:52. > :05:59.work Saturdays. Unions say they may not always be so flexible. Be one
:05:59. > :06:05.to see members have good or skills and good training opportunities. We
:06:05. > :06:11.will not take part in a bidding war to see how low we can go. For the
:06:11. > :06:16.moment, the company rides a wave of success, to keep up with demand for
:06:17. > :06:24.its new release, it will run its factory on Merseyside for 24 hours
:06:24. > :06:30.a day. Manchester United is due to set the price for its shares on
:06:30. > :06:36.Thursday. The club is selling a 10% stake which could raise as much as
:06:36. > :06:38.$330 million.. But some are saying that Manchester United is being
:06:38. > :06:42.overvalued. Particularly as it has hefty debts and is facing
:06:42. > :06:52.competition from rivals with very deep pockets. Sean Hamil, is a
:06:52. > :06:54.
:06:54. > :06:58.lecturer at The Birkbeck Sport Business Centre. The club's
:06:58. > :07:01.proposed valuation with a price tag of $ 330mn - would make it the most
:07:01. > :07:03.expensive sports franchise in the world - nearly double that of Real
:07:03. > :07:07.Madrid - investors will be asking themselves if they're getting a
:07:07. > :07:10.good deal. Is it really worth that much? I do not think it is worth
:07:10. > :07:14.that much at the mom structure is not good value for
:07:14. > :07:20.investors. The problem for the company the debt is so large that
:07:20. > :07:24.the operating profit goes to pay down the deck. Even with the
:07:24. > :07:34.proposed reduction in debt from the Shia issue they will still have
:07:34. > :07:46.
:07:46. > :07:52.substantial debt. The family which owns Manchester United, how will it
:07:52. > :08:02.pay down its debt power bid and? The fundamental problem is the
:08:02. > :08:03.
:08:03. > :08:08.structure of the football industry in Europe. It has to competitors in
:08:08. > :08:13.England, one of them as Manchester city. They did -- expand them
:08:13. > :08:22.matter what they do. In order to stand still they have to spend as
:08:22. > :08:30.much as the competitors on salaries. The -- that will impact on the
:08:30. > :08:38.ability to get a pre-tax profit. This happened in the 90s. There was
:08:38. > :08:43.a lot of share flotations in the 90s. Fans bought the shares. The
:08:43. > :08:47.clubs went making any money. The sheer prices decline in the clubs
:08:47. > :08:54.went off the markets. I do not see any difference between there are
:08:54. > :08:58.now. A after the sale, the Glaser family will retain almost 99% of
:08:58. > :09:06.the voting control, but they are relying on the emotional appeal of
:09:06. > :09:14.owning a bit of Manchester United? For her done a good night
:09:14. > :09:24.generating promotional revenue. They could be profitable within
:09:24. > :09:24.
:09:24. > :09:30.three or four years' time. It is uncertain. There are so much
:09:30. > :09:38.uncertainty around this. There are other alternative investments
:09:38. > :09:46.around and this is not a good one. To conclude, ironically, if they
:09:46. > :09:51.went for a traditional share issue, they sold shares on equal part in
:09:51. > :10:01.used it as an exit strategy, there would be demand. But they want to
:10:01. > :10:05.
:10:05. > :10:08.take some cash and retain control. I do not think they can do both.
:10:08. > :10:10.Asian stocks rose after reports showed China's consumer prices
:10:10. > :10:13.climbed at a slower pace for a fourth month and Australian