17/07/2017 World Business Report


17/07/2017

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Now it's time for World Business Report.

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Growth figures from the world's second biggest economy

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

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popular television series, Game of Thrones.

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

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cyber attack could cost the global economy more than some

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

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

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

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

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

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One of the big worries is this number.

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

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

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

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which the government is trying to cool.

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

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The government also looks likes it succeeding with another problem.

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

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and acquisitions which is down almost half on the same time

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Financial regulation has become a top priority

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

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

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to take a bigger role in managing financial risks.

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With me is Linda Yueh, Professor of Economics

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

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

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

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

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

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slow its economy somewhat but the more reliable figures are factory

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

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

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indicator especially in terms of Chinese consumption which is more

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

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on the real economy side, are actually resilient and somewhat

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

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

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

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

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

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

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

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expectation is that China should slow its economy down because most

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people would rather see a more sustainable slower growth rate for

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

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

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

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

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

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

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that and slower growth rather than something that could ultimately end

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

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The second round of Brexit negotiations will begin in Brussels

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Ahead of the meetings between UK and EU officials,

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

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investing in the UK because of the uncertainty surrounding Brexit.

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Speaking to the BBC, Philip Hammond explained the need

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for clarity, and a smooth transition process.

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It is absolutely clear that businesses, where they have

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

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

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

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economy moving and restore business confidence and then consumer

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

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

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the importance of a transitional arrangement.

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

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

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

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provider, with estimated losses of $53 billion dollars.

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That's roughly the same cost as Superstorm Sandy,

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

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But that's just the average estimate.

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Lloyd's believes that because of the uncertainty around

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calculating cyber losses, the damage could be as high

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

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

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

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

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

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with the premiere of the show's penultimate season.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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workflow here. Lets check in with the financial

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

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

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

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distribution and label services Other indices have

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mainly risen in Asia following another record

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close on Wall Street, however Shanghai stocks fell

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

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than expected in the second quarter.

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