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Now for the latest financial news with Aaron Heslehurst | :00:00. | :00:00. | |
Slashing taxes, talking tough on trade, and ripping up | :00:00. | :00:17. | |
America's President-Elect promises double the growth and millions | :00:18. | :00:23. | |
Plus, his arch rival, China, confirms its weakest growth | :00:24. | :00:35. | |
since 1990, with fears of even tougher times ahead. | :00:36. | :00:44. | |
Welcome to the programme. We have the Friday feeling. You will see a | :00:45. | :01:01. | |
snapshot of all the different things going on in the business world. | :01:02. | :01:03. | |
We start in Washington, where, as you've been hearing, | :01:04. | :01:05. | |
later today, Donald Trump will be sworn in as the 45th President | :01:06. | :01:09. | |
The billionaire businessman has gone from longshot candidate | :01:10. | :01:12. | |
to the leader of world biggest economy in just a year and a half. | :01:13. | :01:16. | |
His supporters will now be hoping that he can shake up the US economy | :01:17. | :01:19. | |
in the same way the he shook up the presidential race. | :01:20. | :01:22. | |
He has promised to create 25 million jobs over ten years and to double | :01:23. | :01:28. | |
the annual rate of economic growth to 4%. | :01:29. | :01:30. | |
He's promised to take a tough line on trade, | :01:31. | :01:34. | |
and on countries he sees as undercutting US workers | :01:35. | :01:36. | |
He has famously threatened to slap a 35% tariff on Mexican imports | :01:37. | :01:42. | |
and a 45% tariff on products from China, raising fears | :01:43. | :01:45. | |
To start with, though, he will renegotiate | :01:46. | :01:52. | |
the North American Free Trade Agreement. | :01:53. | :02:02. | |
He also says he'll cut America's high corporate taxes, | :02:03. | :02:04. | |
which have pushed big US firms to offshore a lot of their business | :02:05. | :02:08. | |
Critics say this is too expensive and will help big companies rather | :02:09. | :02:12. | |
And he promises to free up business by ripping up red tape. | :02:13. | :02:16. | |
He says 70% of all federal regulations can go. | :02:17. | :02:19. | |
He hopes that will encourage firms to keep more jobs in the US | :02:20. | :02:22. | |
Shares of the United States' biggest companies have certainly reacted | :02:23. | :02:26. | |
The Trump Rally has faded in recent days, but the benchmark Dow Jones | :02:27. | :02:45. | |
industrial average is still up around 9% since Mr Trump | :02:46. | :02:48. | |
Some of the top gainers have been the big Wall Street banks. | :02:49. | :02:56. | |
They were hit by a huge amount of regulation since the 2008 | :02:57. | :03:00. | |
financial crisis, known as the Dodd Frank Act. | :03:01. | :03:02. | |
And as Samira Hussain reports, they are hoping its days | :03:03. | :03:05. | |
The Trump inauguration will no doubt be the main talking point | :03:06. | :03:19. | |
at the World Economic Forum in Davos. | :03:20. | :03:21. | |
We've been reporting from there all week. | :03:22. | :03:24. | |
So, let's go live to Switzerland now for some reaction. | :03:25. | :03:27. | |
Dr Paul Sheard is Global Chief Economist at S Global. | :03:28. | :03:30. | |
It is great to have you on the programme. Lots to talk about. Can | :03:31. | :03:36. | |
we start with this whole thing about reversing globalisation and bringing | :03:37. | :03:39. | |
jobs back to America apparently 5 million have been lost from the US | :03:40. | :03:44. | |
since 2000. Most of the reason is technology, not because they have | :03:45. | :03:49. | |
been outsourced across the world. It is great to be here. It is difficult | :03:50. | :03:54. | |
to untangle the effects of technology and liberalisation. There | :03:55. | :04:00. | |
are probably elements of both. -- globalisation. Most economists | :04:01. | :04:07. | |
probably think that comparative advantage is driving it more than | :04:08. | :04:12. | |
anything else. As you indicated, there is a sense of a shift in the | :04:13. | :04:18. | |
atmospherics and the policies coming out of the world's largest economy. | :04:19. | :04:24. | |
Are people in your game bracing ourselves for a possible trade war? | :04:25. | :04:34. | |
That is on everyone's radar screen, but people are not expecting him to | :04:35. | :04:40. | |
go in that direction. Trade war, protectionism, the 1930s and that | :04:41. | :04:45. | |
situation, it would not be consistent with aiming for 4% | :04:46. | :04:50. | |
growth, because he is the man with the art of the deal, the negotiator | :04:51. | :04:57. | |
in Chief. The message seems to be we want free trade, but on fair terms | :04:58. | :05:03. | |
to America. In the past, America has been open with its market. The | :05:04. | :05:07. | |
message is now that has not always served all segments of the American | :05:08. | :05:11. | |
population well. So he will get tougher when it comes to striking | :05:12. | :05:19. | |
trade deals and re- looking at them, and NAFTA is at the top of the list, | :05:20. | :05:24. | |
of course. They will start with that straightaway, apparently. Shortly, | :05:25. | :05:30. | |
the big tax cuts he has planned, will they be enough if they go | :05:31. | :05:34. | |
through to bring a lot of this American corporate money, the | :05:35. | :05:36. | |
millions and billions offshore, bring it back to the US? I think it | :05:37. | :05:45. | |
could be an important development, Aaron, because it has been out a | :05:46. | :05:51. | |
long time. We have had divided government in the US and it has been | :05:52. | :05:55. | |
difficult to get anything done. There has been a strong consensus | :05:56. | :05:58. | |
that this corporate cash going offshore needs to come back. Donald | :05:59. | :06:03. | |
Trump may be the man to do it with the economists on his side. Put a | :06:04. | :06:13. | |
jacket on! It is -20 down there! We appreciate you joining us. At least | :06:14. | :06:17. | |
the global economy is not freezing. There you go! See? A nice line to | :06:18. | :06:27. | |
end on. Joining us from Davos in Switzerland. | :06:28. | :06:29. | |
We are also in China, where official growth figures have | :06:30. | :06:32. | |
They have confirmed that last year, China's economy grew at its slowest | :06:33. | :06:37. | |
pace in more than a quarter of a century. | :06:38. | :06:39. | |
China's growth rate hit 6.8% in the last three months of 2016. | :06:40. | :06:44. | |
That's slightly better than expected, and slightly better | :06:45. | :06:46. | |
But it still leaves the annual growth rate at 6.7% for 2016, | :06:47. | :06:54. | |
bang in the middle of the government's target | :06:55. | :06:56. | |
The bad news is that it's the weakest rate in 26 years. | :06:57. | :07:12. | |
1990 was just after the crackdown in Tiananmen Square, | :07:13. | :07:14. | |
when China was isolated internationally. | :07:15. | :07:16. | |
But the good news is, China has avoided the economic slump | :07:17. | :07:19. | |
many around the world were fearing, largely thanks to huge amounts | :07:20. | :07:22. | |
Let's talk to the BBC's Steve McDonell in Beijing. | :07:23. | :07:29. | |
It is good to see you. Let us start with how interesting 6.7% is. Right | :07:30. | :07:40. | |
in the middle of what Beijing said they would do. Can I ask you this, | :07:41. | :07:45. | |
the last thing President Xi Jinping needs is Donald Trump to start a | :07:46. | :07:51. | |
trade spat because that could hit the Chinese economy quite hard, | :07:52. | :07:56. | |
couldn't it? Absolutely. There is a lot of fear here that China, which | :07:57. | :08:00. | |
has benefited greatly from globalisation, could take a hit from | :08:01. | :08:05. | |
these tariffs if they take place. A could argue that United States | :08:06. | :08:12. | |
consumers have also benefited greatly from free trade. They will | :08:13. | :08:16. | |
suffer if there is a tariff on iPads, for example, and prices go | :08:17. | :08:23. | |
up. Every time we see these numbers the questions lies about. I have to | :08:24. | :08:27. | |
throw it out. Can you trust these numbers and what comes out of | :08:28. | :08:31. | |
Beijing? This is a good question. I am in just before I come to whether | :08:32. | :08:40. | |
the figures are real, let us assume they are solid. -- I mean,. The | :08:41. | :08:46. | |
Chinese government, 6.7%. Many governments would give their hand | :08:47. | :08:52. | |
for that. For China, it means they are worried about a slowing economy. | :08:53. | :08:57. | |
Policymakers say it is all part of the plan here though. China needs | :08:58. | :09:03. | |
slower growth that relies more on domestic consumption and less on | :09:04. | :09:07. | |
exports. That is why we are seeing these figures. But as to whether | :09:08. | :09:11. | |
they are real or not, it is interesting, people have long | :09:12. | :09:13. | |
suspected some provinces artificially inflate their GDP | :09:14. | :09:17. | |
figures to make the government look good. Sometimes they underestimate | :09:18. | :09:22. | |
them to draw more attention and help from the central government. For the | :09:23. | :09:26. | |
first time, we have just had the governor admitting that over several | :09:27. | :09:31. | |
years in his province, the figures were fake. The figures were | :09:32. | :09:38. | |
doctored. And so he says that they have misled the national government | :09:39. | :09:42. | |
on GDP figures. This is just fuelling more and more concerned | :09:43. | :09:45. | |
that you cannot trust these statistics in China. Indeed. Thank | :09:46. | :09:51. | |
you very much for the explanation, Steve. Have fun on the weekend. | :09:52. | :09:57. | |
Other news now. President-Elect Donald Trump's | :09:58. | :10:03. | |
choice for Treasury Secretary, Steven Mnuchin, has | :10:04. | :10:05. | |
faced strong criticism during a Senate | :10:06. | :10:06. | |
confirmation hearing. Mr Mnuchin is a former | :10:07. | :10:08. | |
a Goldman Sachs banker turned hedge He faced accusations | :10:09. | :10:11. | |
that his former bank, OneWest, ruined lives during the US | :10:12. | :10:14. | |
property crash by foreclosing But he told the Senate Finance | :10:15. | :10:17. | |
Committee "I have been maligned." I don't really want to do the | :10:18. | :10:33. | |
markets. You are forcing me to do it. There you go. Everyone is | :10:34. | :10:37. | |
watching the inauguration today. I will be back with James Menendez to | :10:38. | :10:40. | |
look at the papers. | :10:41. | :10:41. |