:00:00. > :00:00.regions from forces linked to the so-called Islamic State
:00:00. > :00:15.Now it's time for World Business Report.
:00:16. > :00:25.Closer ties between the EU and China - that's the aim.
:00:26. > :00:28.The leaders are meeting at at summit in Brussels later hoping to counter
:00:29. > :00:30.President Trump's stance on trade and climate change.
:00:31. > :00:33.Brazil is expected to announce that its economy is growing
:00:34. > :00:37.for the first time since 2014 - but could that be overshadowed
:00:38. > :00:40.We'll look at whether that could threaten the return
:00:41. > :00:51.In a minute we'll find out why today is a big day
:00:52. > :00:58.But first, the EU and China will attempt to deepen ties
:00:59. > :01:04.There is concern among some about the direction taken by US
:01:05. > :01:07.President Donald Trump on trade and climate change.
:01:08. > :01:09.Chinese Premier Li Keqiang will meet European Council president
:01:10. > :01:23.Donald Tusk and European Commission head Jean-Claude Juncker.
:01:24. > :01:26.They are hoping to come up with an answer to Donald Trump's
:01:27. > :01:30.Trade in goods between the EU and China is worth well over 1.5
:01:31. > :01:35.The EU is China's biggest trading partner, while China is the EU's
:01:36. > :01:37.second largest trading partner - after the United States.
:01:38. > :01:40.But the EU is worried about industrial overcapacity
:01:41. > :01:43.in China - most notably, in the steel sector.
:01:44. > :01:46.For example, in April this year the European Commission increased
:01:47. > :01:48.anti-dumping duties on imports of hot-rolled flat steel products
:01:49. > :01:59.from China by up to 36% - much to Beijing's anger.
:02:00. > :02:08.China invested four times as much in European businesses as European
:02:09. > :02:10.businesses did in China. With me is Dr Yu Jie,
:02:11. > :02:17.Head of China Foresight, There is likely to be some common
:02:18. > :02:22.ground as far as climate change and statements of intent regarding the
:02:23. > :02:26.Paris agreement are concerned. But still some areas where there could
:02:27. > :02:32.be some friction? I would say it plenty of friction. That is
:02:33. > :02:37.partially because the Chinese take investment more seriously, whereas
:02:38. > :02:43.the EU take rules more seriously. Chinese played by the money, there
:02:44. > :02:50.are differences here because of that. Regarding the overcapacity
:02:51. > :02:54.issue, this is not just an issue in terms of foreign investment. It is
:02:55. > :03:06.also an issue for China in terms of domestic politics. We know that this
:03:07. > :03:12.party congresses in pipeline. Xi Jinping is trying to stabilise the
:03:13. > :03:18.economy, and to make sure less people are unemployed. So they don't
:03:19. > :03:26.want to lay off and steel in China. Therefore, I am expecting some tough
:03:27. > :03:32.talks. Do you think this talk of getting together and continuing a
:03:33. > :03:40.protectionist stance with Donald Trump, do you think that has been
:03:41. > :03:44.overblown? Partially, yes. Xi Jinping also wants to look like a
:03:45. > :03:51.very stable leader on the international stage, so by
:03:52. > :03:55.presenting himself into some kind of alliance regarding climate change
:03:56. > :04:00.would not give him a very good image. This is also testing the
:04:01. > :04:05.Chinese Communist Party's governing ability, and whether they can
:04:06. > :04:10.address the issues of pollution and poor air quality. That is something
:04:11. > :04:15.Xi Jinping is trying to present to the world as well as the domestic
:04:16. > :04:22.audience. How big of a sticking point do you think this issue of
:04:23. > :04:26.steel tariffs is going to be? It is an ongoing issue. It has become
:04:27. > :04:32.particularly pressing, because what is happening in the political arena
:04:33. > :04:38.and what is happening inside China, that is affecting it. I can only see
:04:39. > :04:40.the problem escalating. Thank you very much for your analysis.
:04:41. > :04:46.Today it re-joins the MSCI Emerging Markets Index -
:04:47. > :04:48.a massive reputational boost for the country,
:04:49. > :04:51.and a sign that things could be turning around for a nation that's
:04:52. > :05:06.been beset with political and terror related problems.
:05:07. > :05:09.The MSCI Emerging Markets Index is made up of 23 emerging markets
:05:10. > :05:13.Pakistan used to be a part of the index, but was removed
:05:14. > :05:17.because of the exchange's decision to shut down for four months in late
:05:18. > :05:22.2008 after prices dropped dramatically.
:05:23. > :05:26.That meant foreign investors couldn't get their money out.
:05:27. > :05:35.We are joined by our Asia business correspondence. In practical terms,
:05:36. > :05:40.what difference does this make. It makes a big difference. Pakistan was
:05:41. > :05:45.once called the basket case of South Asia in terms of its economic
:05:46. > :05:49.prospects. Now it is being called the new Asian tiger. A lot of that
:05:50. > :05:54.is down to the new reputational boost you are talking about. It is
:05:55. > :05:59.now part of the emerging markets index. That includes top-ranked
:06:00. > :06:07.stocks from all over the world. Some of the world's biggest businesses
:06:08. > :06:15.use this list. Just take a look at some of the evidence. Pakistani
:06:16. > :06:19.stocks versus the emerging markets index, you can see on your screen
:06:20. > :06:26.how shares have outperformed the emerging markets index, despite all
:06:27. > :06:32.the troubles that have come out of Pakistan in recent years. Why is
:06:33. > :06:39.this happening? A lot of it is down to good corporate governance, and it
:06:40. > :06:44.is also a domestic consumption story. Much like India and China,
:06:45. > :06:51.Pakistan is all about spending money and seeing incomes rise. Take a look
:06:52. > :06:56.at this chart. GDP growth in Pakistan has been pretty solid of
:06:57. > :07:00.late. That is coming after a low period in the mid- 2000. I think it
:07:01. > :07:06.is also important not to disregard the obvious issues with security and
:07:07. > :07:13.terror related concerns. At least for today, a sign that this country
:07:14. > :07:14.could be facing a turnaround. Thank you very much.
:07:15. > :07:17.Brazil may be about to announce the end of the country's worst
:07:18. > :07:21.It is expected to report that its economy grew for the first
:07:22. > :07:25.three months of the year - it'll be the first quarter of growth
:07:26. > :07:29.But just as the country seems to be turning a corner,
:07:30. > :07:32.another political crisis has kicked off that could halt the recovery
:07:33. > :07:41.Daniel Gallas reports from the capital, Brasilia.
:07:42. > :07:47.Violence flared outside Brazil's national congress as protesters made
:07:48. > :07:51.it clear they were not happy with how the country is being ruled.
:07:52. > :07:57.Inside the building, politicians were debating radical reforms to the
:07:58. > :08:03.economy, including making Brazilians work longer and retire later. We are
:08:04. > :08:08.tired of being a country with a president accused of corruption. We
:08:09. > :08:13.want a new president and we want to know are by tree Labour reforms.
:08:14. > :08:18.These people do not want reforms, they say it will hurt pensions.
:08:19. > :08:22.Despite the political crisis engulfing Brazil, they know that
:08:23. > :08:25.sooner or later, Congress is likely to vote on the reports, some say
:08:26. > :08:30.that is crucial for the Brazilian economy. The Brazilian population is
:08:31. > :08:35.ageing. It presents a serious challenge, the cost of caring for
:08:36. > :08:39.the elderly is rising sharply in the government does not have the money
:08:40. > :08:46.to pay for it. The country spends around 11% of its GDP on pensions,
:08:47. > :08:50.that is twice as high as in more developed economies and it is set to
:08:51. > :08:56.double in the next 40 years. Brazil's debt is also growing,
:08:57. > :09:01.doubling in the past three years. Without reforms, the IMF says that
:09:02. > :09:07.debt could balloon to 90% in five years. President Michel Temer has
:09:08. > :09:12.been pushing reforms to get the economy back on track, but he is now
:09:13. > :09:17.embroiled in a corruption scandal which could see him forced out of
:09:18. > :09:26.office. The question is, if he goes, will his reforms survive? Is -- if
:09:27. > :09:34.the current president has to step down, I am certain that politicians
:09:35. > :09:39.would find a new president who is committed to these reforms. Changes
:09:40. > :09:49.needed, but the proposals are unpopular. -- change is. There is
:09:50. > :09:52.little appetite for more pain, but without more reforms, the recovery
:09:53. > :09:59.could prove short lived, bringing the prospect of yet more unrest.
:10:00. > :10:19.A quick look at the markets now. This is how the Asian markets
:10:20. > :10:21.finished. We are out of time, I'll see you soon. Goodbye. Then we'll be