02/05/2016 World Business Report

China's manufacturers see a smidgen of expansion but is it

We have a bull and bear battle it out.

And preparing for the risk of climate change, a new report

says almost half the worlds biggest institutional investors are doing

Also in the programme some good news for mobile phone users in Europe

where roaming charges have gone down dramatically.

New numbers from China show activity in the manufacturing sector grew

for a second month in a row, but only slightly.

The official Purchasing Managers' Index came

That's down slightly from 50.2 in March and barely above

the 50-point mark that separates expansion from contraction.

Good to see you. It is good news but not that exciting. Put it all in

perspective for us. Well, how you view China's slowdown may be very

different depending on whether you are an optimist or a pessimist. I

spoke to these two individuals, one is a well-known pessimist, Gordon

Chang, and I caught up with him together with this gentleman, Mark

Boston. I asked them where they thought China was headed. I think

China is going to a natural transition from being an economy

that was overreliant on manufacturing, overreliant on

investment driven economy, so now it will be a consumer driven service

oriented economy. This is exactly what the IMF and others have been

telling them to do. So, we are seeing a slowdown, but that will be

something that we expect them to get through over the coming years.

Gordon, you don't agree with anything Mark says? I don't think

they can make this transition because there is significant

political opposition in Beijing. At the same time you have $1 trillion

of net capital outflow last year, a debt to GDP ratio approaching 400%

when you look at all the debt. And you also have infighting between

President Xi Jinping and Premier Li Keqiang, who is supposed to be head

of the economy. When you look at these factors, they are not going to

make that transition the way everybody wants them to. Even though

technically nothing is inevitable, it seems that the crash of some sort

looks virtually certain. I was also speaking to Mark Austen. Even though

they have very different point of view, one thing seems certain, which

is that China's economic fortunes will continue to dig bait where the

global economy is headed for sometime come. So much so that

manufacturing numbers are partly to blame for the slide we are seeing in

regional markets today. Using your mobile phone abroad is

now cheaper for customers On Saturday roaming charges were

capped with a maximum price, it's the first step before they're

completely abolished next year. There is nothing quite like the

shock of seeing a huge phone bill after taking a holiday somewhere.

That is set to change across Europe because from Saturday prices have

been capped for all calls, text messages and data. And even better

news for consumers, it is just the first step in plans to completely

scrap roaming charges from next year. Under the new rules, roaming

will be 75% cheaper during this interim period. Prices are capped at

5 cents per minute for outgoing calls, to sense the text, and 5

cents per megabyte. So, can we use our phones abroad now without any

worry? Not really, because different phone providers may charge you extra

if you go over a certain limit. These new rules also only apply

within the EU, so if you travel abroad to Asia or Africa, your best

bet may still be buying a local sim card.

How much is being done by institutional investors to prepare

Well nearly half the world's biggest asset owners are doing nothing

at all according to a report by Asset Owners Disclosure Project.

This organisation represents big investors worth 38 trillion dollars

and looks at what action they're taking to mitigate climate risk.

A rapidly warming planet means economic instability, which,

in turn, means weaker investment portfolios.

With me is Julian Poulter, CEO of the Asset Owners Disclosure Project

Explain why so many are doing nothing about this. Climate change

has become very much an economic and financial issue, not just an

environmental one. We live in a time where short-term share markets

dominate everything. These asset owners, who incentivised to look at

the risk of climate change over a much longer period, more like 20

years. Essentially, Mark Carney in his speech in November pointed this

out, this tragedy of the Horizons, whereby short-term markets, mainly

because things like a lack of carbon price and other incentives in

market, will eventually affect financial stability. Once the

markets begin to reassess the risk. What you think will cause us to

change behaviour in the sense of those who are managing our

pensions, ensuring our financial futures, will make good decisions

about this? The reality is that many of these asset owners give their

funds to short-term manages to deal with it. Essentially, they are not

really believing the way the market is pricing it in the short term, and

is deciding to do other things in the long-term. They are investing

more in renewable energy, and devising new low carbon indices,

ways that they can decarbonise their portfolios, so if, in the words of

Mark Carney, there is a wholesale reassessment of profits, that the

market changes rapidly, they are better protected. Just put this in

perspective, it is quite staggering that the figures, if there was some

kind of major climate readjustment that was negative, in terms of the

money lost and the impact on our economies is in our security. We are

less than ten years on from the last big market collapse. The reality is

that your average pension portfolio has much greater exposure to climate

risk than other mortgage-backed securities did in 2007. It is in

more than half of the pension portfolio, and therefore of the

markets do start to move... What if there is another hurricane in Boston

or somewhere further north, and suddenly markets get a sense that

governments will have to move quickly, that rapid reassessment of

the risk is what will produce market instability. Thank you to coming in

so early on a bank holiday. After a half-century of waiting,

passengers have set sail from Miami Carnival Corp's

704-passenger Adonia left The cruise comes after Cuba loosened

its policy banning Cuban-born people Several Cuban-born passengers

were among those aboard. Australia's third largest lender,

Westpac bank, has reported a 3% rise in profits

in the six months to March That's less than forecast

and with interest rates at record lows it's being put down to growth

in mortgages and corporate loans. The markets that are open today...

There have been affected by the news we mentioned at the top of the show

about manufacturing data out of China not being encouraging. Also

one of the big reasons Japan is having such a tough time is because

look at the yen versus the US dollar, extremely strong of late.

That is really hitting shares listed in Tokyo.

The government is considering new laws on how tips are

A consultation document from the Business Secretary