20/01/2017 World Business Report


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Now for the latest financial news with Aaron Heslehurst


Slashing taxes, talking tough on trade, and ripping up


America's President-Elect promises double the growth and millions


Plus, his arch rival, China, confirms its weakest growth


since 1990, with fears of even tougher times ahead.


Welcome to the programme. We have the Friday feeling. You will see a


snapshot of all the different things going on in the business world.


We start in Washington, where, as you've been hearing,


later today, Donald Trump will be sworn in as the 45th President


The billionaire businessman has gone from longshot candidate


to the leader of world biggest economy in just a year and a half.


His supporters will now be hoping that he can shake up the US economy


in the same way the he shook up the presidential race.


He has promised to create 25 million jobs over ten years and to double


the annual rate of economic growth to 4%.


He's promised to take a tough line on trade,


and on countries he sees as undercutting US workers


He has famously threatened to slap a 35% tariff on Mexican imports


and a 45% tariff on products from China, raising fears


To start with, though, he will renegotiate


the North American Free Trade Agreement.


He also says he'll cut America's high corporate taxes,


which have pushed big US firms to offshore a lot of their business


Critics say this is too expensive and will help big companies rather


And he promises to free up business by ripping up red tape.


He says 70% of all federal regulations can go.


He hopes that will encourage firms to keep more jobs in the US


Shares of the United States' biggest companies have certainly reacted


The Trump Rally has faded in recent days, but the benchmark Dow Jones


industrial average is still up around 9% since Mr Trump


Some of the top gainers have been the big Wall Street banks.


They were hit by a huge amount of regulation since the 2008


financial crisis, known as the Dodd Frank Act.


And as Samira Hussain reports, they are hoping its days


The Trump inauguration will no doubt be the main talking point


at the World Economic Forum in Davos.


We've been reporting from there all week.


So, let's go live to Switzerland now for some reaction.


Dr Paul Sheard is Global Chief Economist at S Global.


It is great to have you on the programme. Lots to talk about. Can


we start with this whole thing about reversing globalisation and bringing


jobs back to America apparently 5 million have been lost from the US


since 2000. Most of the reason is technology, not because they have


been outsourced across the world. It is great to be here. It is difficult


to untangle the effects of technology and liberalisation. There


are probably elements of both. -- globalisation. Most economists


probably think that comparative advantage is driving it more than


anything else. As you indicated, there is a sense of a shift in the


atmospherics and the policies coming out of the world's largest economy.


Are people in your game bracing ourselves for a possible trade war?


That is on everyone's radar screen, but people are not expecting him to


go in that direction. Trade war, protectionism, the 1930s and that


situation, it would not be consistent with aiming for 4%


growth, because he is the man with the art of the deal, the negotiator


in Chief. The message seems to be we want free trade, but on fair terms


to America. In the past, America has been open with its market. The


message is now that has not always served all segments of the American


population well. So he will get tougher when it comes to striking


trade deals and re- looking at them, and NAFTA is at the top of the list,


of course. They will start with that straightaway, apparently. Shortly,


the big tax cuts he has planned, will they be enough if they go


through to bring a lot of this American corporate money, the


millions and billions offshore, bring it back to the US? I think it


could be an important development, Aaron, because it has been out a


long time. We have had divided government in the US and it has been


difficult to get anything done. There has been a strong consensus


that this corporate cash going offshore needs to come back. Donald


Trump may be the man to do it with the economists on his side. Put a


jacket on! It is -20 down there! We appreciate you joining us. At least


the global economy is not freezing. There you go! See? A nice line to


end on. Joining us from Davos in Switzerland.


We are also in China, where official growth figures have


They have confirmed that last year, China's economy grew at its slowest


pace in more than a quarter of a century.


China's growth rate hit 6.8% in the last three months of 2016.


That's slightly better than expected, and slightly better


But it still leaves the annual growth rate at 6.7% for 2016,


bang in the middle of the government's target


The bad news is that it's the weakest rate in 26 years.


1990 was just after the crackdown in Tiananmen Square,


when China was isolated internationally.


But the good news is, China has avoided the economic slump


many around the world were fearing, largely thanks to huge amounts


Let's talk to the BBC's Steve McDonell in Beijing.


It is good to see you. Let us start with how interesting 6.7% is. Right


in the middle of what Beijing said they would do. Can I ask you this,


the last thing President Xi Jinping needs is Donald Trump to start a


trade spat because that could hit the Chinese economy quite hard,


couldn't it? Absolutely. There is a lot of fear here that China, which


has benefited greatly from globalisation, could take a hit from


these tariffs if they take place. A could argue that United States


consumers have also benefited greatly from free trade. They will


suffer if there is a tariff on iPads, for example, and prices go


up. Every time we see these numbers the questions lies about. I have to


throw it out. Can you trust these numbers and what comes out of


Beijing? This is a good question. I am in just before I come to whether


the figures are real, let us assume they are solid. -- I mean,. The


Chinese government, 6.7%. Many governments would give their hand


for that. For China, it means they are worried about a slowing economy.


Policymakers say it is all part of the plan here though. China needs


slower growth that relies more on domestic consumption and less on


exports. That is why we are seeing these figures. But as to whether


they are real or not, it is interesting, people have long


suspected some provinces artificially inflate their GDP


figures to make the government look good. Sometimes they underestimate


them to draw more attention and help from the central government. For the


first time, we have just had the governor admitting that over several


years in his province, the figures were fake. The figures were


doctored. And so he says that they have misled the national government


on GDP figures. This is just fuelling more and more concerned


that you cannot trust these statistics in China. Indeed. Thank


you very much for the explanation, Steve. Have fun on the weekend.


Other news now. President-Elect Donald Trump's


choice for Treasury Secretary, Steven Mnuchin, has


faced strong criticism during a Senate


confirmation hearing. Mr Mnuchin is a former


a Goldman Sachs banker turned hedge He faced accusations


that his former bank, OneWest, ruined lives during the US


property crash by foreclosing But he told the Senate Finance


Committee "I have been maligned." I don't really want to do the


markets. You are forcing me to do it. There you go. Everyone is


watching the inauguration today. I will be back with James Menendez to


look at the papers.


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