18/10/2013 World Business Report

sleep to flush out waste toxins. Those are the latest headlines from

BBC World News, Time now for the money news with Alice and World

Business Report. `` time now. China's economy picks up speed, but

it is still on track for its slowest year in more than a decade. We will

take a look behind the numbers. Plus, $950 and counting. A new

record high for Google as shares in the Internet giant amazes Wall

Street yet again. A very warm welcome to you, this is

World Business Report with me, Alice Baxter. Also coming up in the

programme, unfair exchange. Have traders been trying to fix the $5

trillion a day foreign`currency market? We will have the latest on

that. But as you've been hearing, in the last couple of hours China has

unveiled its growth figures for the third quarter. The world's number

two economy grew at a rate of 7.8% between July and September. A slight

improvement on the previous quarter and the best figure so far this

year. And it is down to improving demand for China's goods around the

world and at home, which have boosted factory production and

retail sales. It means China is on track to hit the government growth

target of 7.5% for this year. Now, that might sound good compared with

most major economies, but for China is the weakest growth since 1999.

Beijing's trying to rebalance the economy after three decades of

surging growth, fuelled by exports and investment. Linda Yueh explains.

China's growth is slowing, but is this deliberate? The government

wants the country to grow more sustainably, which means rebalancing

the economy. Take a look at this, currently spending by households in

China accounts for just over a third of all national output. That's half

of that of the US. In fact, China has one of the lowest levels of

consumption in the world. For most developed economies, like the UK and

Japan, it is around two thirds of GDP. But, on the flipside,

investment by firms is nearly half of Chinese output. And as you can

see that's actually three times higher than the US and the UK. China

wants this to change to rely less on investment, as some firms are

borrowing too much, which can be risky, and increase consumption, get

more of the middle`class to spend by raising their income. By rebalancing

in this way the Cheney 's government is aiming to grow a 7.5% this year

`` the Chinese government is aiming to grow 7.5 this year, but they hope

this will be more sustainable. Managing the slowdown, though, is no

easy task. Grace is a senior Chinese economist at JP Morgan and she joins

us from our Hong Kong bureau. Thanks very much. Growth in China is

picking up, but it is still at its slowest pace since 1999. Y? Grace, I

wonder if you can hear me? `` why. Despite the fact China's growth is

picking up, it is still at its slowest growth rate since we have

seen since 1999. Why is that? This is basically reflecting the fact

that after the global financial crisis, China's export sector growth

has not been matching what we saw in the previous decade. Therefore the

export sector is no longer that strong a driver of growth. At the

same time the government is trying to rebalance growth, so as to

achieve a more balanced growth support from the consumption and the

investment front. If they're doing this successfully then hopefully we

will see more sustainable growth in the medium`term. So this is a very

deliberate action on the part of the Chinese government, to slow down

growth from those double`digit figures we have become used to over

the last decade or so. This restructuring and rebalancing

towards consumer consumption, domestic consumption? That's exactly

the case. And what about this question that still hangs over the

reliability of these numbers? Yeah, there is definitely always the

question about how reliable the numbers are. I guess the way we tend

to counter cheque that is using other indicators, such as the more

high`frequency PMI number from the government, as well as from the

private sector, as well as other data, which tends to be more

reliable, as well as the financial data and also trade data. If you

look at that from various angles, it is quite consistent that China's

growth was picking up somewhat in the third quarter on both the

external side as well as the domestic side. And on that actually

the government's clarification of its policy target, as in they want

to stabilise growth in July, actually helped quite a bit with

regard to the domestic sentiment, and therefore supporting domestic

activity overall. It's all about that word, sustainability. Grace,

thanks very much. Now, Google, shares there jumped to

a new record high of more than $950 in after`hours trading after the

Internet giant posted strong results after the Wall Street closing bell.

Google made profits of almost $3 billion in the three months to

September. That's an increase of 36% on the same period last year, and

was actually much better than Wall Street was expecting. It's largely

down to strong growth in Internet advertising, but as Rico or now

reports from New York, the success is put in the country in that

company in the spotlight over its tax arrangements. In the movie The

Internship, Google is the cool and hip company that everyone wants to

join. Inside this slick campus, some of the world 's most innovative

minds exchange their new ideas. Its growth may not be as explosive as it

once was, but Google continues to lead the industry with its new

products and services. In the fast`growing smart phone market as

well its android operating system has been the winner. `` Android.

Currently there are over 900 million Android markets in the world. This

is the website the majority of people come to when they go to

search the Internet. Some people even say let's Google rather than

let search the web. And those users attract advertisers, and every time

people clicked on an advert Google makes money. But in the technology

world the fall from grace can be very fast and hard `` people clicked

on. Google has really surged with their Google Now products as you

speak to your devices `` click. Also knowing what you want before you

even know it. It's a little scary to some people because they are looking

at your calendar and your Gmail, and they are figuring out you have a

flight coming up, or you care about some sport, and they're providing

you with that information before you even think to ask for it. But for a

company that seemingly can't do any wrong, it's recently faced heavy

criticism for not paying a fair share of corporate tax. While not

illegal, Google has been taking advantage of low tax rates in

countries like Ireland. Until that's resolved, it's hip and cool image

may be less than squeakyclean. Now, The Internship... Sorry, moving

on, we want to ask is have traders been fixing the $5 trillion a day

foreign exchange market? That's the question regulators are now asking

from London to Hong Kong to New York. In the last few hours

Bloomberg has reported that the authorities are examining electronic

messages sent between senior traders at top banks between the last few

years. Sharanjit Leyl has been following this from Singapore. What

else do we know about this? Essentially sources are saying that

these messages sent by senior bankers, from Barclays, Citigroup,

Royal Bank of Scotland and UBS, amongst others, they are being

scrutinised, part of the global probe into the manipulation of the

foreign exchange market. According to the Bloomberg report, the senior

bankers over the last three years exchanged messages through their

Bloomberg terminals outlining the tile of their positions and client

orders and made trades. Investigators are looking into

whether those messages are mounted as attempts to manipulate the

market. We know Barclays, Citigroup, Royal Bank of Scotland and UBS

account for 40% of trade in the foreign exchange market and the

U.K.'s financial conduct authority this week opened the formal probe

into currency trading, which essentially joined a global

investigation that involves regulators in the US, the European

Union, Switzerland and Hong Kong. This enquiry comes as regulators

around the world basically examine the possible abuse of financial

benchmarks by companies that actually play a crucial role in

setting them. We know Royal Bank of Scotland and Barclays have already

been fined about $2.6 billion in the last two years for fixing the liable

rate. We will have to watch to see how this plays out. Thanks very

much. From the and the business team, goodbye for this hour. Back

for a look at the papers in a moment `` from the.

One of the main stories in the UK this morning is a maximum life

sentence bore the worst cases of human trafficking and exploitation,

which is to be introduced in the UK `` for the. This comes after the

reason they said tougher action, sanctions, would be brought in to

tackle modern day slavery as it's being called. According to

government figures the number of cases of human trafficking

discovered in the UK has risen by 25% in the last year. Another

early`morning call for the Met's specialist antitrafficking squad.

The owner of