:00:00. > :00:00.Now for the latest financial news with Aaron and World Business
:00:00. > :00:24.Yep, the big economic slowdown continues.
:00:25. > :00:28.The world's second-largest economy is making less and buying less.
:00:29. > :00:30.And all of that will have an impact on you...
:00:31. > :00:37.Plus - living la dolce vita - but the fizz has long gone out
:00:38. > :00:46.We have a special report from the northern city of Ferrara.
:00:47. > :01:03.If you watch as regularly, thank you, and if you are new, keep
:01:04. > :01:05.watching. Also in the programme -
:01:06. > :01:07.party like it's 1999. All three US markets reach
:01:08. > :01:11.new record highs at the same time - the first time that's
:01:12. > :01:14.happened for over 16 years. They are partying on Wall Street.
:01:15. > :01:18.Not here, though. We start in China, where we have had
:01:19. > :01:22.an update about the health of the world's
:01:23. > :01:24.second-biggest economy. Those numbers are becoming weaker,
:01:25. > :01:26.undermining hopes that the great Let's remind you of what has
:01:27. > :01:37.been going on and put Last year, the Chinese
:01:38. > :01:42.economy grew 6.9%. That was the weakest growth
:01:43. > :01:46.in China for a quarter, In the six months until the end
:01:47. > :01:59.of June, growth has slipped to 6.7%. The fear has been that the slowdown
:02:00. > :02:02.is getting worse and the figure could be far lower by
:02:03. > :02:10.the end of the year. We have had the latest numbers
:02:11. > :02:16.from China's factories and shops. Industrial production,
:02:17. > :02:18.everything China churns out, But that is weaker than
:02:19. > :02:25.the 6.2% we saw in June. We were expecting the same,
:02:26. > :02:28.but did not get the same. China is trying to rely less
:02:29. > :02:32.on being the manufacturer of the world, the factory floor
:02:33. > :02:36.of the world, and relying more Basically getting its people to
:02:37. > :02:46.spend. Retail sales, a big part of that,
:02:47. > :02:50.for July, were at 10.2%. Investment by firms was up 8.1%
:02:51. > :03:02.in the first seven months But it was a lot lower
:03:03. > :03:09.than everybody was expecting. Louis Kuijs is from
:03:10. > :03:22.Oxford Economics. Great to have you with us. Let's
:03:23. > :03:28.talk about this. We thought the China slowdown was basically the new
:03:29. > :03:31.norm. We thought 7%, the high 6%s. But it doesn't look like the
:03:32. > :03:39.slowdown is having a slowdown. That's right. I think the slowdown
:03:40. > :03:43.still has further to go. The government would like growth of
:03:44. > :03:49.something like 6.5% or 7%, but if you look at the organic sources,
:03:50. > :03:53.like investment, consumption, exports, we are not getting there.
:03:54. > :03:58.The anyway for the government to get to these ambitious numbers is by
:03:59. > :04:00.stimulating the economy. Any time growth slows, they are going back to
:04:01. > :04:08.the stingless. It is an ongoing game. -- stimulus. But I think the
:04:09. > :04:12.slowdown has further to go. Is the slowdown still part of the attempt
:04:13. > :04:17.by Beijing to re- shift the economy away from being the manufacturer of
:04:18. > :04:22.the world to being more domestic demand, or is this a reflection on
:04:23. > :04:28.the global economy? It is a bit of both. Definitely a subdued state of
:04:29. > :04:32.the global economy and trade, these things don't help. But a lot is
:04:33. > :04:36.within China's own economy. Domestically, the bill are worried
:04:37. > :04:42.that private investment is weak, and that is for good reason -- people.
:04:43. > :04:46.They are looking at spare capacity in the sectors. Pretty subdued
:04:47. > :04:50.proper development, and uncertain sales prospects. People are
:04:51. > :04:57.reluctant to invest. The government may try to keep credit growth up,
:04:58. > :05:03.but that is not a lot for private investors to invest more. While I
:05:04. > :05:06.have you, can I ask you this? For many people watching in Britain and
:05:07. > :05:12.around the world, perhaps the uninitiated who do not follow this
:05:13. > :05:17.kind of thing, we look at this is and go, wow, 6.7%, countries would
:05:18. > :05:23.give their right arm for that growth, but can you explain why
:05:24. > :05:29.China needs to sort of numbers? That is a good question. A country like
:05:30. > :05:34.China is still very poor on average. We might see the fancy cities from
:05:35. > :05:40.the outside, but on average, Chinese people are only 15% as rich as
:05:41. > :05:43.Americans. There is a long way to go in terms of catching up. China
:05:44. > :05:49.diffidently needs pretty solid growth. But the big question is, is
:05:50. > :05:56.5% enough, or does it have to be 6.5%? The government thinks it needs
:05:57. > :06:02.6.5% growth. That is why it keeps piling up dead. Economists may say
:06:03. > :06:07.that 5.5% would be enough and still allow you to catch up -- debt. And
:06:08. > :06:11.put you on a more sustainable footprint. Where will China be at
:06:12. > :06:16.the end of the year, growth was? What do you reckon?
:06:17. > :06:20.LAUGHTER It has proven to be very hard to bet
:06:21. > :06:25.against China's government, so I would say we will have 6.5%. That is
:06:26. > :06:29.what they want. That is what they want, that is what they will get,
:06:30. > :06:31.right? Whether it is real or not. Joking. Thank you. We appreciate
:06:32. > :06:35.your time. We are also in Italy
:06:36. > :06:38.where the latest GDP figures are expected give little
:06:39. > :06:46.cause for celebration. Growth is expected to have fallen
:06:47. > :06:50.to just 0.2 % in the three And we were talking about 6.2% in
:06:51. > :07:00.China! That's despite promises
:07:01. > :07:02.by Prime Minister Matteo Renzi of deep reforms to
:07:03. > :07:06.revive the economy. Our reporter Theo Leggett has been
:07:07. > :07:10.in the northern city of Ferrara, where the laidback cafe lifestyle
:07:11. > :07:24.hides a growing sense of pessimism. A warm afternoon in the Italian city
:07:25. > :07:28.of Ferrara. The cafes and rest runs are thronging with people. It looks
:07:29. > :07:33.prosperous. You might think the economy was booming, but appearances
:07:34. > :07:39.can be deceptive -- rest runs. Italy's, is struggling, and expected
:07:40. > :07:45.to grow by 1% this year, and not expected to pick up speed any time
:07:46. > :07:50.soon. And implement its at 11%, and the banks, so important for economic
:07:51. > :07:54.recovery, weighed down by 360 billion euros worth of loans that
:07:55. > :07:57.may never be paid. No wonder that the International Monetary Fund
:07:58. > :07:59.thinks Italy will not be back to where it was before the financial
:08:00. > :08:06.crisis until the middle of the next decade. And there is assuming cost.
:08:07. > :08:10.This woman is highly qualified, but she is working in an ice cream
:08:11. > :08:15.parlour because she says it is the best job she can get. I was looking
:08:16. > :08:20.for a job in my field, archaeology, in which I have a degree, but it is
:08:21. > :08:29.very hard lately in Italy to find jobs. So this is the best I have
:08:30. > :08:34.seen. I am responsible for a shot. -- shop. And I have learned to make
:08:35. > :08:40.ice cream. I'm quite happy with this. I would be happier to work in
:08:41. > :08:43.archaeology, but for now, it is impossible. If an successful
:08:44. > :08:51.companies are finding life difficult. Because our production is
:08:52. > :08:56.high-level, we used to punch every item with this tool. This man runs a
:08:57. > :09:00.jewellery specialist, and most of what he makes is sold abroad as
:09:01. > :09:05.Italians struggle to buy it. He thinks red is stifling business. At
:09:06. > :09:13.the end of the year, when you gain 1000 euros, 50% is in tax, or maybe
:09:14. > :09:18.more. So it is very high. Then we have the problem of bureaucracy.
:09:19. > :09:27.When you do something, you have to fill in paper, the process is very
:09:28. > :09:31.compensated. It is very hard. --, located. Italy's government has
:09:32. > :09:41.promised far-reaching reforms, but now it is avoiding a full-blown
:09:42. > :09:44.banking crisis. There is also a vital referendum on the constitution
:09:45. > :09:48.later this year. Plenty to talk about in the bars and cafes. But
:09:49. > :09:55.businesses are not expecting much up any time soon. -- help.
:09:56. > :10:02.Let me show you the markets. There are the Asian markets. That is of
:10:03. > :10:10.the back of what we saw in War Street. Take a look at this. ! Wall
:10:11. > :10:15.Street. But since 1999, they are partying on Wall Street. Record
:10:16. > :10:27.highs. Oil is having a bit of a blip up. Strong earnings numbers. And
:10:28. > :10:31.also the expectation that American's central banks will not raise rates.
:10:32. > :10:35.People are throwing their money into the markets and Wall Street is
:10:36. > :10:40.enjoying that. Follow me on Twitter. I will be back with James to take a
:10:41. > :10:42.look at some of the papers from around the world.