19/07/2017 World Business Report

Now it is time for World Business Report.

Chinese and US officials meet for high-level economic talks,

but with President Trump considering tariffs on steel

And a mammoth task for India's government, as it attempts to find

a buyer for debt-ridden flagship carrier Air India.

Welcome to World Business Report, I'm Rachel Horne.

Also on the programme: United Airlines manages a profit,

despite boycott threats over the treatment of its passengers.

We begin with talks between China and the United States.

President Trump's 100-day deadline for boosting trade with China has

come and gone, and officials from both countries

are about to meet in Washington to assess what has

Mr Trump hopes the talks will tackle what he says is an unfair deal.

It all boils down to this - the US buys more from China

Last year the deficit, or imbalance in goods,

was $347 billion, and it seems to be rising.

At their first meeting, in April, Presidents Trump and Xi set up trade

talks, which have already produced some results.

Both have agreed to expand trade, with China saying it would accept US

beef imports, and will increase access for financial services,

while in return the US will allow imports of cooked chicken.

But many issues are still unresolved.

China's factories churned out 73 million tons of steel last month,

US producers have accused China of flooding the market,

And it has prompted Trump to consider slapping tariffs

on steel imports, part of the administration's emphasis

to increase products made in the USA.

It is made in America week in the US, and President Trump

When we purchase products made in the USA, the profit stays here,

the revenue says here and the jobs, maybe most importantly of all,

That kind of protectionist language is a worry for America's trading

These days, though, Mr Trump's tone is more measured

when it comes to China, compared to what was said

in the throes of the presidential campaign.

We can't continue to allow China to rape our country.

They have taken our money, they have taken our jobs.

The turning point in their relationship?

When the two leaders broke bread and ate cake.

Now President Trump has referred to President Xi as a terrific guy

So, given the political state, what can we expect to come out

of the summit when representatives of the two countries meet?

I would not expect any big breakthroughs.

The most important thing is that the two sides are talking,

and so I would expect a fairly amicable discussion,

some minor outcomes, and some nice general language

that the two countries will work together

to strengthen economic relationships, and reduce the trade

Of course, overshadowing the economic and trade issues

is the thorny question of North Korea.

Mr Trump wants China to exert more pressure on the country.

A failure to do so could undermine the strategic dialogues.

With me is Dr Guo Yu, principle China analyst at Maplecroft.

What do you expect to come out of these talks today?

Well, we expect... The expectation is quite tempered, from our

perspective. We certainly do not see this kind of talks will

fundamentally alter the trade imbalance you just mentioned

straightaway, and there are three factors supporting this view.

Firstly, this kind of high-level dialogue is always tending to be

more about setting the process rather than making concrete

progress. So the two sides will take stock on the 100 day action plan and

work out what plan for the next 12 months, where the two teams will

work on their particulars. Secondly, we will see neither side will give

in on the sticky points. Washington is certainly not going to recognise

China as a market economy yet, nor are we loosing control on hi-tech

exports. On the other hand, Beijing is unlikely to buckle under pressure

over steel and aluminium productions, despite the US

administration's investigation. And finally, let's not forget it is a

very politically important year for the Chinese government, with the

19th party congress scheduled for this autumn. No leader in Beijing

would like to appear to be giving in too much concessions to the

Americans. So above all, stability is the name of the game for the

Chinese government in 2017. Now, you mentioned the steel production. That

is obviously a huge issue for the US, especially for President Trump,

and his plan to increase jobs. He is saying that he is considering

putting tariffs on steel imports from China. If that happened, what

impact could that have on these talks? Well, as I said, we don't

think Beijing would be too much concerned, if we are talking about

exports to the US markets. It only accounts for a very small

proportion. So if the Washington administration slaps an import

tariffs on Chinese steel, the impact on the Chinese steel industry would

be rather limited. The impact on American consumers, buyers, that

would be another question. What we certainly don't think is that the

Chinese will give in too much over this point. And certainly, on the

back of buoyant economic performance so far this year from China, I think

they will be feeling fairly confident on the negotiating table.

Thank you very much for your time. To the highly competitive

airline industry now. India's government is facing

the mammoth task of finding a buyer for its cash-strapped

national carrier, Air India. Air India hasn't made

a profit in over a decade, and is buried under billions

of dollars of debt, debt that no potential buyer would want to take

on, and this is something that is going to make privatisation

of the company difficult. Sameer Hashmi sat down with India's

aviation minister for this exclusive The maharaja, a royal prince, is the

mascot of India's national carrier. And while they were once king

of the skies, it has not made A $5 billion bailout

by the government in 2012 Today, the airline has

a debt of $8 billion. Now a committee will decide

whether to sell a minority stake, I spoke to the aviation minister,

who is on the committee, and began by asking him

if the government will write off You have to be practical

in these things. In Hindi there is a word

that means scapegoat. A hard-nosed businessman

and an airline, and there is always a scapegoat that

can be found. So you need a scapegoat

to take up the airline? With all of its debt,

we would need about 52,000. If I had that type of money,

I could set up an outline. If you find a buyer willing

to invest, given that it is a huge mess, they would one day a huge

hand in restructuring, There is thinking that taxpayer

money is invested in other places. We do if no matter what you do

you have political opposition. We could allow Aero India to become

a written off company unable In other news: A supposed

boycott of United Airlines because of the poor treatment

of passengers has had little impact United revealed its first

financial statement, that included the period after staff

forcibly removed a passenger from a plane, and the

numbers aren't bad. Profits of $818 million

for the second quarter is almost 40% higher than the same

period last year. Daimler has unveiled plans

to cut vehicle emissions. It is recalling three million

Mercedes-Benz diesel cars, and installing a software

fix on the vehicles. Daimler has been under pressure

from police and prosecutors, who are investigating

the possible manipulation The voluntary fix will cost

the company $250 million, and will begin over

the next few weeks. Don't forget you can get in touch

with me and some of the team