17/07/2017 World Business Report

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Now it's time for World Business Report.


Growth figures from the world's second biggest economy


We take a look at what goes into the making of the world's most


popular television series, Game of Thrones.


In a minute we'll also find out why Lloyd's of London believes a massive


cyber attack could cost the global economy more than some


But we begin with China's economy, which has grown more than expected


in the second quarter of this year - by 6.9%.


It matters because the country, regarded as the world's factory,


As you can see here it's a far cry from how things used to be -


this shows how for much of the last 25 years China has been


One of the big worries is this number.


258% is the size of China's debts compared to it's economy.


That means it owes more than two and a half time everything it makes


Much of the debt is linked to the red hot property market


which the government is trying to cool.


The cost of new housing in major cities rose 10.4% in May.


The government also looks likes it succeeding with another problem.


This year Chinese firms have spent $75.2bn on foreign merger


and acquisitions which is down almost half on the same time


Financial regulation has become a top priority


And over the weekend he's been at a meeting of regulators


in Beijing where he called for the country's central bank


to take a bigger role in managing financial risks.


With me is Linda Yueh, Professor of Economics


6.9%, how reliable is this a figure? Many will say it is never that


reliable. In a sense, we probably expect a slowdown in the second half


of the year so it will probably come in closer to target and the reason


is that China has been meeting their growth target by stimulating the


economy which is added to the debt. Expectation is that China should


slow its economy somewhat but the more reliable figures are factory


output and retail sales and both came in stronger than. Factory


output a key indicator grew by 7.6% in June. Retail sale, another key


indicator especially in terms of Chinese consumption which is more


sustainable, grew by 11% so those figures suggest the Chinese economy,


on the real economy side, are actually resilient and somewhat


readjusting more to domestic demand than export. It is this a just and


of the economy which is that target, really. Still an awful lot of


reforms to be an act did. -- enact did. Other concerns that too much


work still needs to be done? It beat market expectations but the concern


is how much of that is still being fuelled by the government stimulus


especially around credit. That is probably why markets would like to


see a greater slowdown than last year. 6.7% last year and the


expectation is that China should slow its economy down because most


people would rather see a more sustainable slower growth rate for


China, already a middle income country, then mimicking the past 25


years. As it becomes middle income it needs to adjust to a slower pace


of growth and to accept it. Then I think some of the reforms become


more palatable, including the financial, which is one of the main


reasons why it loan growth is such a problem because it is not properly


allocated by the market interest rates. Markets would like to see


that and slower growth rather than something that could ultimately end


rather badly. Thank you very much for talking to us.


The second round of Brexit negotiations will begin in Brussels


Ahead of the meetings between UK and EU officials,


the UK's finance minister has warned that businesses are delaying


investing in the UK because of the uncertainty surrounding Brexit.


Speaking to the BBC, Philip Hammond explained the need


for clarity, and a smooth transition process.


It is absolutely clear that businesses, where they have


discretion over investments and can hold off, are doing so and you can


understand why - they are waiting for more clarity about what the


future relationship with Europe will look like and the way to get the


economy moving and restore business confidence and then consumer


confidence is to give as much clarity as possible as early as


possible which is why I have been talking a busy all or five weeks of


the importance of a transitional arrangement.


In other news About 4 out of 10 British firms say Brexit has


In a report on cyber crime, Lloyds estimated that in the most


likely scenario, a malicious hack would take down a cloud service


provider, with estimated losses of $53 billion dollars.


That's roughly the same cost as Superstorm Sandy,


the hurricane that hit the east cost of the United States in 2012.


But that's just the average estimate.


Lloyd's believes that because of the uncertainty around


calculating cyber losses, the damage could be as high


as $121 billion, or as low as just $15 billion.


China's President Xi Jinping has called on the country's Central Bank


It's the most popular TV show of all time,


the most downloaded show of all time and is shown in 170 countries.


And last night, fans were rewarded after more than a year of waiting,


with the premiere of the show's penultimate season.


Over six seasons, TV fantasy Game of Thrones has captured the imagination


of millions of people. But far from the seven kingdoms, the costumes,


ran the sets and authentic armoury that feature in the show is serious


business for a few firms in India. Send them at least two options. It


is not just Game of Thrones. This business supplies props to many


films. We still have the art of hand embroidery alive. They cannot get it


in the West so whatever we do, it is a very handmade, it is very period


looking. I am in geek heaven. I do not know where to begin. I spotted


the sword from the Game of Thrones but nothing can beat John Snow and


here is my chance to try my hand at his cloak which is fairly heavy and


to top it all, I have his sword as well. What is John Snow without his


trusted weapon? This is where the swords are made. The largest


factories of its kind. They make every type of sword from heavy steel


to light titanium. It supplies two armies around the world but it's


swords are not sold commercially in India. Domestic business is only 10-


15%. Sometimes it can stretch in the 30%. But it is mostly seasonal. But


these are the details that make the story come alive on the big screen


and, as long as the battles go on, it means more business on the


workflow here. Lets check in with the financial


markets: The Nikkei is closed for a public holiday today -


will be interesting to see how investors will react to the news


that Sony is in the final stages of talks to acquire French music


distribution and label services Other indices have


mainly risen in Asia following another record


close on Wall Street, however Shanghai stocks fell


after that data came through showing China's economy grew more


than expected in the second quarter.