:00:18. > :00:19.A new year starts with fresh fears China's manufacturers are boxed
:00:20. > :00:22.into a protracted slowdown - but the service sector is booming -
:00:23. > :00:35.Oil and commodities were the worst performers of 2015,
:00:36. > :00:38.yet US shale remains resilient - but will it remain so in 2016?
:00:39. > :00:54.China looks set for a sluggish start to 2016 after activity in the
:00:55. > :00:59.manufacturing sector contracted for a fifth straight month in December.
:01:00. > :01:03.This data - released in the past couple of days - suggests
:01:04. > :01:07.the government may have to step in to avert a sharper slowdown.
:01:08. > :01:11.Even though China's services sector ended 2015 on a stronger note,
:01:12. > :01:16.the economy still looks set to grow at its slowest pace in a quarter
:01:17. > :01:21.Much of this can be blamed on volatile stock markets,
:01:22. > :01:23.slowing growth and wobbles in the housing market.
:01:24. > :01:35.One of the biggest risks this year is a sharp depreciation of the yuan.
:01:36. > :01:37.Experts also fear the number of corporate debt defaults could
:01:38. > :01:40.policy could create turbulence ahead, from the removal of capital
:01:41. > :01:56.Even as China attempts to steer away from growth of its factories
:01:57. > :01:59.and state owned enterprises, rebalancing its vast economy could
:02:00. > :02:11.With me to look at these issues is Roderic Wye.
:02:12. > :02:20.Thank you for coming in. Your thoughts on the latest news we have
:02:21. > :02:25.had in December, it just shows it is a two speed economy, doesn't it? It
:02:26. > :02:30.does, it is a real problem for the Chinese. In a sense, it is good
:02:31. > :02:35.news, they want economic growth to be consumer driven and maybe we are
:02:36. > :02:42.seeing the first signs of that. On the other hand, if manufacturing is
:02:43. > :02:47.going slowly, this will affect overall growth rates and it will
:02:48. > :02:55.affect confidence in the Chinese economy. Towards the end of last
:02:56. > :03:00.year, the Chinese government is saying we have got new ideas to
:03:01. > :03:08.sustain growth, to boost growth in the New Year. What are they going to
:03:09. > :03:12.do? They are talking about supply-side stimulus as the new way
:03:13. > :03:19.forward. Rather than going back to the waste of stacking interest
:03:20. > :03:24.rates, they do not want to get back onto that treadmill. They want to
:03:25. > :03:28.find a new way forward through supply-side cutting overcapacity,
:03:29. > :03:34.boosting regulation, improving business conditions. They hope that
:03:35. > :03:40.will be a new way to provide stimulus. In the meantime, evidence
:03:41. > :03:47.that difficult for them to take control. They have had to halt
:03:48. > :03:59.trading because shares have gone down by 5%. Also, the UN will float
:04:00. > :04:02.freely. -- yuan. It has been very difficult. They are talking about
:04:03. > :04:08.how they are going to manage risk in the coming year and then suddenly
:04:09. > :04:16.the first thing that happens in the beginning of the year is risks of
:04:17. > :04:22.all kinds start coming in. It will be a problematic time. The Chinese
:04:23. > :04:26.economy is moving in the rough sort of direction. But it will take a lot
:04:27. > :04:31.of time and there will be a lot of worries. Thank you so much for
:04:32. > :04:37.coming in and sharing your thoughts on what is happening in China and
:04:38. > :04:38.the year ahead. That story has a huge impact on commodity prices and
:04:39. > :04:42.oil prices worldwide. Oil has surged on the
:04:43. > :04:44.Saudi Arabia/Iran tensions Throughout 2015,
:04:45. > :04:59.they were in a slump. Great for the car driver,
:05:00. > :05:02.a nightmare for countries whose The blame, or credit, for the low
:05:03. > :05:22.oil prices lies with America's shale oil producers, who've created
:05:23. > :05:25.a glut of crude of world markets. OPEC, the oil cartel,
:05:26. > :05:27.hope these low oil prices will drive But the shale oil producers
:05:28. > :05:31.held out well throughout 2015. Can they survive throughout
:05:32. > :05:47.the coming year? 2015 was a year for motorists.
:05:48. > :05:54.Petrol prices fell and fell. That is thanks mostly to America's shale oil
:05:55. > :06:02.producers. They have been pumping the market. OPEC normally cuts its
:06:03. > :06:08.production. They were happy to let it plummet. They were hoping falling
:06:09. > :06:19.revenues could drive the shield producers out of business.
:06:20. > :06:24.Production in shale oil fields fell very little in comparison. We have
:06:25. > :06:37.seen amazing resilience of US shares. Now we think going forward
:06:38. > :06:44.in 2016 will be the year we see shale oil sustain itself. With the
:06:45. > :06:49.oil price this slow, most producers are running at a loss. Falling
:06:50. > :06:54.further into debt. Many of the smallest are now going out of
:06:55. > :07:05.business. We have very high levels of debt. Because decline rates are
:07:06. > :07:12.very high, they need to keep investing. That is why we have seen
:07:13. > :07:19.bankruptcies. We are expecting more of that under the low oil prices.
:07:20. > :07:24.OPEC predicts the oil market will stabilise in the second half of 2016
:07:25. > :07:34.as shale oil producers are forced to retreat. Unless these producers can
:07:35. > :07:39.make dramatic savings, it could be the year the industry buckles.
:07:40. > :07:51.We can talk more on this with our Singapore hub. It is not the start
:07:52. > :07:54.we would like. We have got the oil price spiking, but also shale
:07:55. > :08:02.markets across Asia down quite a bit. A lot going on. That is right,
:08:03. > :08:13.a lot of issues in the equity markets, with Japan 2.4%, South
:08:14. > :08:18.Korea 1%, China 0.5%. All of the focus right now is on that tension
:08:19. > :08:22.in the Middle East. And the issue right now, will this escalate or
:08:23. > :08:33.Will diplomacy prevailed sooner rather than later. For now,
:08:34. > :08:38.investors are jittery. Food prices increasing, Saudi Arabia is the
:08:39. > :08:47.world's second largest oil producers. Despite the jump, oil
:08:48. > :08:58.prices are still done by two thirds since mid-2014. That is due to
:08:59. > :09:03.oversupply from producers. Traders are forecasting prices to pick up
:09:04. > :09:09.slightly this year from about $50 per barrel to $70 per barrel.
:09:10. > :09:13.Thank you very much. More than a million private cars are
:09:14. > :09:16.being banned from Delhi's roads, as authorities begin testing
:09:17. > :09:19.drastic new measures to cut smog in The capital is testing a formula
:09:20. > :09:28.where private cars will be allowed on the roads only on alternate days
:09:29. > :09:35.from January depending on whether their license plates end
:09:36. > :09:47.in an even or an odd number. It has not been a good start to a
:09:48. > :10:12.new year for the world's financial markets. All of the major markets
:10:13. > :10:18.down. What is causing all of this concern? The tensions between Saudi
:10:19. > :10:25.Arabia and Iran in the Middle East. Ringing fears about where that could
:10:26. > :10:33.lead. These are the American market at the end of the trading year in
:10:34. > :10:41.2015. These markets were reopened. Also, the other massive story.
:10:42. > :10:45.Chinese manufacturing data more disappointing than we were
:10:46. > :10:52.expecting. Very shortly, we will be looking at the stories can be News
:10:53. > :10:55.review. -- in the News review. See you in a few minutes.