tv BBC Business Live BBC News August 14, 2017 8:30am-9:01am BST
this is business live from bbc news with ben thompson and ben bland. abenomics is working! japan reports its longest run of economic growth in a decade. live from london, that's our top story on monday the 14th of august. japan records its sixth straight quarter of economic growth, fuelled by a rise in consumer spending. but could soaring debt and stubborn deflation derail the recovery? also in the programme. facebook finds a way into china. despite being banned in the country for years, a photo—sharing app ‘colourful balloons' has
popped up on the mainland — but has no facebook branding.
and a new week but old worries over tensions between north korea and the us keeping markets on edge. and with holiday season in full swing we'll speak to the founder of one hotel online booking firm who's trying to cut out the middle man. and as airline passenger arrests soar by 50%, today we want to know what are your flying bugbears? let us know. just use the hashtag #bbcbizlive. hello and welcome to business live. know surprisingly my biggest bugbear when a flying is the lack of legroom —— no surprise, my biggest bugbear. we start with japan, which has just released its latest set of growth figures, and there's good news for the world's third largest economy. it recorded its longest economic expansion in a decade. japan beat expectations with growth of 1% between april and june — that's the sixth straight quarter of growth.
the numbers are an encouraging sign for the government but don't solve the country's ongoing financial headaches.
japan's productivity per person per hour stands at $23.45. that leaves it in 18th place in the world, well behind the us on $33.41 and a host of others including canada, the uk and france. the country's debt has also ballooned in recent years. at more than 250% of gdp it has the largest debt to output ratio in the world, by quite a comfortable margin. long—term the country also faces what's been described as a "demographic time bomb". if current trends persist, in less than 50 years nearly 40% of the population will be over the age of 65. sir david warren, an associate fellow of the asia programme at chatham house, joins us now. do we take this to mean that the combination of monetary easing and
fiscal stimulus and structural reforms is working? it is good news for abenomics because it seems to be working, this is the strongest growth for two years, the strongest consumer spending for a couple of yea rs consumer spending for a couple of years and the longest continuous growth for over a decade. you have to go back to the early 2000s and their aggressive structural form of their aggressive structural form of the japanese economy to find continuous growth like this, and this bears out the positive verdict that the imf were beginning to give on abenomics a couple of months ago. what about the long—term issues, taking the debt issue to begin with. 250% of gdp. are they doing enough
to sort that out? it is difficult for the japanese government. this is a massive debt overhang and they need to sort this out, and they have co ntroversially need to sort this out, and they have controversially tried to begin the pi’ocess controversially tried to begin the process of putting up vat and to concentrate on fiscal consolidation and that is controversial at a time when they also trying to get inflation into the economy and get up inflation into the economy and get up and prices up. it is difficult for him —— and get wages up. the majority of the domestic debt is domestic, they are borrowing from themselves rather than international markets, the japanese government won't want to lose their focus on the longer term, but it will be a continuing problem for them.“ the longer term, but it will be a continuing problem for them. if that seem to like a big problem to deal with, the ageing population is more complex, because the risk that they face if the number of people aged 65 and over get close to a0%, you have
people were lying on the state pension system and fewer people proportionally paying into the system. this is the biggest problem japan has to face in the long—term, they need to bring more women into they need to bring more women into the workforce and the government has committed to do this. this means probably bringing more immigrants into the country, japan has a very selective policy when it comes to immigration. but they are prepared to bite the bullet and bring workers in from abroad and it means people working much longer. we are seeing a growth in older workers working longer into what we think of as pensionable age, but these demographics are a long—term issue for the japanese to address. thanks for the japanese to address. thanks for joining for the japanese to address. thanks forjoining us. let's take a look at some of the other stories making the news. the chief executive of australia's largest bank is to retire following
a money laundering scandal. ian narev has been head of commonwealth bank since 2011 but civil charges accuse the lender of breaching financing rules. those claims have wiped billions of dollars off the bank's market value. narev is expected to step down injune next year. after weeks of public disagreement, the uk's finance minister phillip hammond and the country's trade secretary liam fox have written a joint article for the sunday telegraph, stating that britain will need a transition deal when it leaves the european union. the pair say that any deal would be "time limited" and should not be viewed as a "back door" to staying in the eu. bitcoin is hovering above the $4,000 mark after surging past the milestone at the weekend. bloomberg reports it has soared on growing optimism faster transaction times will hasten the spread of the cryptocurrency. facebook is reported to have launched a photo—sharing app specifically aimed at chinese users. according to the new york times,
the social media giant which is banned in mainland china has launched an app called colourful balloons. it's thought to have been released through a local company without any facebook branding. let's find out more, karishma vaswani, our asia business correspondent is in singapore. they have launched it, no branding so they have launched it, no branding so there is no real connection with facebook, why was facebook banned in the first place? as you know, the social media websites in general in china have been banned because of strict internet censorship rules and the tight control china places on their citizens and what they can access, but there's been no confirmation from about this story. but the new york times and other media reported that facebook said this launch was something they okayed. you know what this is,
basically it is a photo sharing website. in china facebook is banned, like many otherforms website. in china facebook is banned, like many other forms of social media, including twitter. this app which is called colourful balloons feels a bit like facebook it doesn't carry the facebook name oi’ it doesn't carry the facebook name or the logo. it was released in china by a company, but all the facebook spokesman has said is that they are interested in china and they are interested in china and they are interested in china and they are spending time in understanding and learning more about the company. you know that i use facebook because we have shared some funny in stories. it's monday, the start of a new trading week, but the same issue is what's weighing on markets. asian numbers down as those worries remain over the war of words between the united states and north korea. that was enough to take the shine
off the better—than—expected japanese economic growth figures. the dowjones and the s&p 500 finished higher on friday, but both had their second worst week in 2017 last week — because of those same worries. in europe, markets remain pretty quiet for the holidays — with thin trade. the same worries persist, and no one is willing to call the top of the marketjust yet. more on that in a moment, but first let's head stateside and michelle has a look at what's ahead on wall street today. geopolitical fears dominated sentiment on wall street last week. traders may find themselves busy poring over the latest economic releases. retail sales figures, jobs data, and the minutes from the most recent fed meeting are all due out over the coming days. 0n the corporate front, keep an eye out for a host of high street names from the gap, walmart, home depot and target, all reporting their latest
earnings figures. on wednesday, us, mexican and canadian officials meet in washington dc for the first round of talks to renegotiate the north american free trade agreement, or "nafta" for short. investors will be watching that for any signs of increased trade protectionism. this monday, canadian foreign minister chrystia freeland will testify to a parliamentary committee. she is expected to discuss the government's negotiating position ahead of the talks. justin urquhart—stewart is with us, of seven investment management. the nick a is down almost 1%, shrugging off the rather dramatic improvement for the japanese economy. yes, some very good figures for the japanese economy, abenomics is beginning to work, but we have theissue is beginning to work, but we have the issue of career and that will be
covering all markets at the moment —— the issue of korea. the united states just ignored it last week, though, and they just states just ignored it last week, though, and theyjust went up. we will be waiting for the next stage of this, but the markets are at low volatility, low volume, the middle of the summer, but this is when you could get some volatility coming in and people need to be prepared. is it time to take some risk of an take some money off the table? —— and. it time to take some risk of an take some money off the table? -- and. we spoke about this last week, people are maybe watching north korea not the market itself and this is where we could see a correction. you think about the amount which has come back already, pretty small, but it would ta ke already, pretty small, but it would take so little for a change. the
fa ct take so little for a change. the fact that the united states are heading for a debt ceiling again, they have not had a budget proved andi they have not had a budget proved and i can't get any —— they can't get any tax deals through, and then you have north korea, so the investors are being more defensive and if people want to take some cash off the table, nothing wrong with that, it is moments like this, you can take some profit and then you can take some profit and then you can use the volatility to your advantage. you mentioned north korea and the stand—off between the united states and pyongyang. the markets in the united states were not that bothered about it last week. that is right. it completely ignored it, and what they were looking at there was the domestic figures which were not bad, and we had figures regarding inflation and that was looking fairly docile, as well, and there was one big issue which was the issue regarding interest rates. if
they aren't going to go up as much as before, that was better news for the market and that overrode north korea. justin, thanks forjoining us. korea. justin, thanks forjoining us. we will see you later to go through the newspapers. still to come. some is not over yet. even if you have not been on your holiday, there is time to go on one. after the break we will speak to the planner of one hotel booking website who is hoping consumers will cut out the middleman when it comes to booking their holiday. you're with business live from bbc news. british businesses have cut back on investment plans as their confidence in the uk economy falters. that's according to the institute of chartered accountants. their study shows business confidence for the third quarter
fell back into negative territory, reversing the gains made in the second quarter. richard holt is their economic advisor. has this reversal in confidence come about since the general election? clearly this has happened against the background of the general election which introduced a great deal of uncertainty. probably not the only reason. the other thing which happened was the brexit negotiations began and continued to be rather unpersuasive and that worried companies, as well, there was also growing anxiety about the possibility of interest rate rises andi possibility of interest rate rises and i think probably a combination of those three together is what is behind this decline. backin back in june london's back injune london's businesses we re back injune london's businesses were starting to feel more optimistic, what has changed since then? it's those factors. it's the uncertainty over the domestic political situation, hopefully now
resolved. its concerns about what the brexit deal will be when it will ta ke the brexit deal will be when it will take place, and people are starting to worry about interest rates. that last thing is perhaps fading away but clearly the eu issue isn't going to disappearfor the but clearly the eu issue isn't going to disappear for the next two or three years. thank you. 0n the website, scottish salmon exports have reached record value of £346 exports have reached record value of £316 million in the first half of this year. that is 70% higher compared to the same period last year. the industry saw 29,000 tonnes of fresh salmon sold in the second period of this year alone. the biggest market for them is the united states, while china is the
most significant buyer in asia. much more on the website. you're watching business live — our top story. japan records its sixth straight quarter of economic growth, fuelled by a rise in consumer spending. but the world's third largest economy still faces financial hurdles, like a ballooning debt pile and prolonged deflation. a quick look at how markets are faring. now, many of you may be about to head off on holiday, if so, there's a good chance that you may have used a third—party booking website. in fact, a study by cornell
university suggests that three—quarters of all hotel bookings were made through online travel agents such as expedia or booking.com. while this can be an efficient way to compare hotel prices within a city, holiday—makers may lose out on special offers granted to people booking directly with the hotel, this could include perks like free—wifi or free online check—in. and for hotel chains, third party booking websites remove the ability to offer a customised experience which would otherwise provide a boost to profits. with us is hotelchamp's chief executive officer and co—founder, kristian valk. i see the benefit of the king with a hotel directly because you can get some of those added perks. but if
it's cheaper to do it through a third party i'm probably going to do it through a third—party. third party i'm probably going to do it through a third-party. you're right about that. what we saw in the old days is that hoteliers sometimes charge higher prices on their own website rather than on a booking platform like booking.com. luckily we see a trend that hoteliers are more aware that they should create a level playing field where prices are the same. but still able to offer extra services or added value. there's a trade—off. by putting yourself on a third—party site you open yourself up to many more people who might not necessarily have heard about you. if i put myself on expedia or booking.com to get a bigger audience, but you say they don't really need to do that any more, we are better at shopping around? you are definitely better off shopping around. hoteliers are very good at giving hospitality within the hotel. but they've been
struggling to bring the same hospitality to their website, for example. this is where we come in. we help hotels to give the same hospitality level to the website as they do in the hotel. what we are trying to do is to bridge the gap when it comes to information from the hotelier to their website visitors. quite often the hotelier can give you a better service if he knows what you're up to, and he can give you that by having this information. it's an interesting time to be going into the hotel industry, because when i go away, i tend to look for hotels, but a lot of my friends say they book through airbnb. is there still a robust business model for hotels in the traditional sense? the hospitality industry is growing tremendously. i
think airbnb is fulfilling a need that people like to have another experience. hospitality is all about experience. hospitality is all about experience. what we see is that in the current model, where online has such a dominant position, guests don't get the right experience nor the right service level, letter in the right service level, letter in the value for money they would have got if the middleman hadn't had such a dominant position that they currently have. i can see the benefit of a hotel chain using your site, they can speak to their customers directly, they know who they are, what type of room they want, all those sorts of things. but from a traveller ‘s point of view, what difference does it really make? the convenience of a third—party site means you've suddenly got a whole array of hotels to book from. yes. there are maybe two things to
say to that. first of all, extensive research shows that most people do look around on the booking platforms, but still the majority goes directly to the hotel website for more information. the interesting fact is 99% of those people will leave that website without making a booking because they don't trust it or they don't get the right information, or they believe they will get a better deal elsewhere. hotelchamp is offering that to their guests and maybe even offering them a better deal. the convenience of the booking platforms looks great from a consumer perspective. let's assume you go on a trip for perspective. let's assume you go on a tripfora perspective. let's assume you go on a trip for a weekend to barcelona, maybe you paid £200 for a two night stay in a hotel. the current commission model, you easily pay close to £50 on that booking. this is what the hotelier pays the third.
imagine whatan is what the hotelier pays the third. imagine what an experience or better deal be hotelier could give you if this middleman didn't have such a dominant position. you make your money from winds and the software? exactly. thank you for talking us through it. —— you make your money from licensing the software. 70 years ago, britain ended its rule over india and the country was divided into two separate states. partition brought about the largest mass movement of people in history, but what has become of the economies of pakistan and india? the bbc‘s sameer hashmi has more. since partition, india and pakistan have taken different economic paths. india's economy was bigger than pakistan from the start, because of the size of its population and because of the fact it inherited financial and government institutions. today, india's economy
is almost eight times bigger than its neighbours. but what's interesting is that during the first 50 yea rs, interesting is that during the first 50 years, both nations saw similar economic growth. the average income per person in pakistan was higher than in india during this period. but, since the start of the 21st—century, india's economy started to grow faster, widening the 93p- started to grow faster, widening the gap. this is largely down to economic reforms in india in the 19905 economic reforms in india in the 1990s when it opened its markets for foreign and private investments. today, india and pakistan are the largest economies in south asia. trade between the two countries is thriving and estimated to be close to $5 billion. experts say that if this trade was formalised, the total bilateral trade between the two countries could touch $10 billion every year. we picked up this story in the
papers, snapchat who is in permanent decline because other companies are stealing its business. when it came to the market it was really rather expensive. almost from day one it was cursed. we've seen the share price go down and we can hear the mutterings from facebook and others, they can take away their meal any time they like. this is because the scale of facebook is absolute. it's something they like, a little start—up, it's just the concept. it's not necessarily the intellectual property but the idea of sticking a filter on a video. the trouble is, anyone else coming in and doing that, facebook can easily copy that as well. this is going to be the strength of these large operations, the same with google. it will be difficult to come up against them and protect yourself. this is
them and protect yourself. this is the point when the regulators are talking about getting involved, they have so much power they are effectively monopoly players. you almost go back to the american trust system in the 19th century. you had these huge steel conglomerates that had to be broken up, and oil companies as well. that's where you saw these other american oil companies coming up. they become almost ubiquitous, they are effectively running monopolies. it's interesting to see that no one is breaking them up at the moment but at some stage, yes, the law is going to catch up with them and say you're operating as a monopoly. do you snapchat? no. i'm going to wait for it to go bust! thank you. that's it from business live today. good morning. a fairly decent
weekend with plenty of dry weather, sunshine. today, it's going to stay dry and sunny but in the west we've got some rain. all courtesy of this area of low pressure. quite heavy rain this morning across scotland, northern ireland, western parts of england and wales. that rain is going to continue into the afternoon. it could become a bit more patchy and showery. towards east anglia and the south—east of england it will stay largely dry and sunny. at apm, showers for much of scotland, feeling quite cool beneath the rain. temperatures 15—17dc with the rain. temperatures 15—17dc with the rain. temperatures 15—17dc with the rain continuing in northern ireland and across the north of england. eventually rain moving into east yorkshire, lincolnshire, the midlands and central southern parts of england. the odd shower and peace
offering towards wales and the south—west. staying largely dry and bright, especially in the far east of kent, norfolk and suffolk. through the evening and tonight, rain will eventually move further east. a wet night to come for many of us. that will keep temperatures up of us. that will keep temperatures up in double figures. about 14—16 celsius with a bit of clearance towards glasgow and belfast. it could turn a tad chilly into tuesday morning. during tuesday after any morning. during tuesday after any morning rain in the south—east and north—eastern england and scotland which will clear, plenty of dry weather around on tuesday with some sunny spells. the scattered shower, one or two on the heavy side across central and northern areas of england. 23—24 in the south—east feeling present in the sunshine. 0n wednesday, a ridge of high pressure is with us for a while but then this area of low pressure here will move
infor area of low pressure here will move in for the end of wednesday. eventually we'll see a bit of rain moving in the belfast but for most of us on wednesday, dry with bright spells. drier, brighter weather again on thursday after some early morning rain. during the week, sunny spells, heavier showers at times. it will turn a bit cooler as we go into later in the week. more details available on the website. more details available on the website. hello, it's monday. it's nine o'clock, i'm joanna gosling. welcome to the programme. urgent action is needed to deal with thousands of prisoners still serving time on indeterminate sentences where they are still inside years after the jail term they were given. families are calling for action. i don't like getting up in the
morning, because i don't know what is going to happen. there might be a phone call. a phone call to say what? that he took his own life, i think that is what is going to happen if we can't get him out. we'll hear from the families of two men who have been in prison for years longer than their original sentence. rallies and vigils in cities across america to condemn the violence and hatred seen in charlottesville virgina