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tv   BBC Business Live  BBC News  September 2, 2019 8:30am-9:01am BST

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this is business live from bbc news with sally bundock and ben thompson. more protests and a general strike in hong kong — we look at the financial and economic impact on the territory. live from london, that's our top story on monday 2nd september. companies are under pressure — flag—carrier cathay pacific has told staff they'll be fired if they walk out, and the number of tourists to the territory has fallen. also in the programme — clothes, footwear and smart watches from china — all hit by fresh us
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tariffs, a move that will hit the the us consumer in the pocket. this is the first trading day in september 19, and as you can see in europe they are all heading higher, but only just. and as flights are cancelled over european airspace after a massive it failiure, we speak to the man with technology he says will make the skies safer and more efficient. and as kfc sells out of their new plant—based nuggets within hours, today we want to know, are you eating less meat? let us know, just use the hashtag bbcbizlive. hello and welcome to business live. welcome to the programme. beyond fried chicken, should kfc be renamed? >> let us know what you
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think about that story. we start in hong kong, where the territory is braced for more demonstrations and a general strike called for monday and tuesday. the protests are the longest—running political demonstration in the territory since the handover in 1997. over the weekend, thousands of protesters blocked roads to the territory's main airport. hong kong has a world—class financial centre and stock market, and the territory has a gdp bigger than many industrialised countries. but its main bourse, the hang seng, has performed badly over the past month, with investors from the chinese mainland buying some $5.1 billion of stocks. the protests are affecting the economy, particularly retailers. on friday, retail sales figures forjuly declined 11.4% from a year earlier to just over $34 billion. then there's tourism —
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hong kong is one of the world's most most visited cities, and the demos have been blamed forjuly monthly visitors numbers falling, for the first time this year, by 4.8% from a year earlier to 5.2 million. visitors from mainland china, its top market, accounted for more than 80% of that fall. today, a territory—wide general strike has been called. one major employer there is flagship carrier cathay pacific. it has 27,000 staff in the city — staff have been told they'll be fired if they walkout. the airline has been accused of bowing to political pressure from china. let's go live now to hong kong and the bbc‘s stephen mcdonell. so, tell us about today's general strike, janet, is there big participation? well, because of the
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weather, the driving rain and strong winds, it has been hard tojudge just how successful this call for a widespread strike has been. certainly, there are shops and small businesses closed, but the weather makes it hard to move around at the moment. near here, we saw a starbucks which had a sign up saying it is closed today due to the unpredictable situation. i don't know if that means staff didn't come to work or if it is because of the weather, or they are just worried that there might be just some sort of protest in this area in conjunction with the strike action. certainly, students, both from high schools and universities, have boycotted classes and there are rallies going on as we speak in different parts of the city. people participating in this strike, especially students, are gathering in various parts of the city. but by and large, it is kind of peaceful
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here today, when you compare it to the running street battles and airport chaos we saw on the weekend, which really did affect the city, especially in certain parts of it. now, we will see what develops later on today. certainly, some businesses at least are going ahead as they were. but you couldn't ignore the impact you were talking about before, of this three month long crisis. you speak to some small businesses, especially in areas where there are lots of tourists, they're feeling the impact. and yet others say they feel the impact but they don't mind supporting the pro—democracy camp because they think that the short—term economic pain is worth the long—term gain. think that the short—term economic pain is worth the long-term gain. we will leave it there but thank you for now, stephen mcdonell, who has been across this right from the very beginning. you can follow stephen on twitter for the very latest.
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with us now is eleanor olcott, china policy analyst at ts lombard. welcome to the programme. sally and stephen there explaining what we have known for quite a while, in that these protests are going nowhere very quickly, in terms of either side backing down, talk me through the significance of this and of the hong kong economy to the chinese economy? the protests have taken a massive toll on hong kong's retail and tourism sector, consumer confidence has taken a big hit but in terms of the financial system in hong kong, hong kong is still very important for the mainland economy. over 70% of foreign direct investment to the mainland comes via hong kong. so, what hong kong essentially enables the mainland to do is to have access to international finance without having the same level of letting go of the capital controls. and at this moment you might say it is a bit of a perfect storm because there is so
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much going on in the world economy, but talk to me about the significance of the protests, alongside what we already know about the trade war between china and the us? at the moment it is pretty much a perfect storm as you say in the hong kong economy. we have the protests which are affecting the real economy locally but also the trade war which hasjust real economy locally but also the trade war which has just escalated today, as well as the slowdown in domestic activity in china. and really, towards the year end, there is no reason for optimism on either of those three factors. so we are looking at a rising risk of the hong kong economy going into at least a technical recession. when you highlight those things, it seems that none of them are going to change anytime soon, the protests, the trade war, the rhetoric, the tariffs, but the slowdown, how do the authorities start to deal with all that slowdown, is it about stimulus? the hong kong government does not have control over its
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monetary policy, the hong kong dollar is pegged to the dollar. but they are sitting on a huge fiscal... they have a huge fiscal balance which they could utilise, and in the past month they have used 2.4 billion us dollars of that, really, thatis billion us dollars of that, really, that is not enough to turn the ship around. we could in the next few months, we keep see economic data coming back negative, so we could see a biggerfiscal coming back negative, so we could see a bigger fiscal stimulus from the hong kong government. let's take a look at some of the other stories making the news. more evidence of argentina's crisis — the central bank has imposed controls on how much foreign currency companies can buy. the peso has lost more than a quarter of its value since elections last month, which showed president macri's business—friendly government may be ousted. the economy is battling recession, rising unemployment and runaway inflation. european flights were disrupted on sunday due to a computer failure at french air traffic control.
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british airways said flights heading to, or passing over, france and spain had been affected, while easyjet said it had to cancel 180 flights. passengers are being advised to check the status of their flight before leaving for the airport. in the uk, if the the opposition labour party were in government, it would hand over about $365 billion of shares in 7,000 large companies to workers in one of the biggest state raids on the private sector in a western democracy. that's according to the financial times and law firm clifford chance. it also says landlords would face higher taxes. america's 15% tariffs hit some $112 billion of chinese goods on sunday, including clothes, footwear and smartwatches, a move that is likely to be felt by us consumers.
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china retaliated with fresh duties on us oil. despite that, president trump said a september meeting with beijing was "still on". our asia business correspondent karishma vaswani is in singapore with the details. asian investors have been nervously watching the trade war between the world's two superpowers escalate. markets in asia were wobbly today as the us‘s tariffs on some $100 billion or so worth of chinese goods went into effect on sunday. this covers things like clothes, nappies and food. in response, beijing slapped tariffs on what amounts to about $75 billion worth of american goods, between a range of 5% to 10% worth of tariffs. but frankly, most of these items have been on china's previous lists. have been on china's previous lists. the newest addition is us crude oil. analysts have been telling me that this shows china doesn't have as much firepower to target products from the us with tariffs, simply because it doesn't buy
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as much from the united states as it sells to it. and that goes to the very heart of the trade war. but beijing does have other options. it can make business licenses harder for american firms to get, or hold goods at ports, for instance, all of which would make it much harderfor us firms to do business in china. now for the details of what's ahead on wall street today. the first trading day in september, you can see japan the first trading day in september, you can seejapan and the first trading day in september, you can see japan and hong kong down almost half a percent, and that is the end of the week in the united states. there is no action in the us today as the share markets are closed for the labor day holiday. that means things might be a bit quieter today, despite the fact that many of us have returned to work and are back at our desks, those of us who have had some time out in
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august. august was a really volatile month for the share markets. in london it is the mining stocks that are doing really well today. we have seen a are doing really well today. we have seenajump in are doing really well today. we have seen a jump in mining company prices. that is why the ftse is standing out today amongst its peers across europe. for some more analysis on the week ahead, it is over two dojo choice. joining us is richard hunter, head of markets at interactive investor. let's talk about that trade war, because as we touched on, more ta riffs because as we touched on, more tariffs in the battle between the world's two biggest economies. there are some people who could stand to benefit from this? yeah. the first thing is that the us economy is two thirds consumer —based, and that is a very crucial part of their economy. so what analysts are now starting to look at is those companies which are more or less exposed in terms of what they are importing into the us — into china.
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a couple of companies have been identified, the likes of best buy in the states, who apparently get the likes of 60% of their goods from china. and then we have the likes of walmart, because of their geographic diversification, who have other revenues. this is what president trump would say is one of the aims of this, to make us firms think about sourcing domestically and supporting the us economy and jobs in manufacturing, and therefore there is a win? and of course, the offset to that is those us retailers who do rely on china, and when they have now got these extra tariffs, they have got two options, either to absorb the extra costs or to pass them onto the consumer. the smaller companies in the us, who have that to china, are being somewhat hung out to dry at the moment. for the financial markets it is a quiet
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start to the week in terms of economic news, earnings, that kind of stuff. but what about westminster, it is going to be quite a week, and how will that be interpreted by the pound sterling, by people in the city? it is difficult to see how much more uncertainty we can have, as we walk a... that is the statement of the week! yeah, as we limped towards sist week! yeah, as we limped towards 31st october. we have seen a hit on sterling, obviously. by the same token as we have been seeing from the ftse-100, it is a token as we have been seeing from the ftse—100, it is a global index, it is affected by mining stocks, oil stocks, the oil price, and underpinning that, weakness in sterling i ran ironically is actually good for the index. but the political machinations are probably likely to hit the currency market first. you were showing me earlier some stats on how the markets had done globally, and we had such a crazy august, you can get the impression that the markets have
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been really beaten up? and that is one of the reasons to take a slightly longer term view. even the ftse-100 on slightly longer term view. even the ftse—100 on the year two today is up about 7%. in terms of the three major us indexes, they are up between 13% and 20% in the year to date. that is a pretty good return. not bad. still to come, as flights are cancelled around europe in the airspace, due to a massive it failure... to a massive it failiure, we find out about what systems are out there keep the skies safe and efficient. you're with business live from bbc news. an information campaign urging the public to "get ready for brexit" has been launched by the government. the advertising campaign and accompanying website is aimed at businesses and the public. sean farrington is talking to businesses in the west midlands about how they're preparing.
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this aluminium casting manufacturer in the black country is one of those businesses that will have to be planning to get ready for the end of october, when the uk is all set to leave the european union. this new advertising campaign, you go on the front page of it, on the government website, amd one of the first things it says is that if you're an importer or an exporter, and they import a lot of this aluminium from scandinavia, you need to make sure you've got the right registration. so, there is a big knock—on effect for businesses. how is that affecting everybody across the country? we've got henrietta and tom with us this morning. henrietta, good morning to you. when you look at what businesses right across the midlands, from the birmingham chambers of commerce, are doing in terms of preparations at the minute, do you feel we are in a bit of a better place now than we were before? i think so, we have seen an uptake in the number of businesses preparing, particularly in the manufacturing sector, because i think it is a lot better publicised, how manufacturers could be impacted by brexit. and we are hearing from businesses that we haven't heard from before
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who are concerned about brexit wanting to know how to prepare. but across the board and particularly in the services sector, we're seeing less preparedness. if you look at businesses as a whole, in our last business brexit health check, we found that onlyjust over 50% of businesses were confident that the risks of brexit had been thoroughly discussed at board and senior management level — which, when you think that is step one preparing for brexit, that's still quite low. tom, when you look at the manufacturing industry particularly, seeing what's going on around us here, how is that generally doing at the minute whether it's brexit—related or not? i think, sean, there's a lot of uncertainty around at the moment. there's a study coming out this week from the bank of england which spoke to 6,000 companies and what it found was that they are really holding back on investment because they're nervous about how brexit will turn out in less than two months' time. and so, they have reduced investment by about 10%—11%, and that makes a huge difference to the long—term profitable potential of these companies. so, i think it's the uncertainty is the biggest concern for these manufacturing businesses.
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tom, henrietta, thank you very much. so there's a few things, it's notjust about the preparations for brexit, it's about dealing with what's going on in the economy as well at the moment. you're watching business live — our top story... one of asia's biggest financial centres, hong kong, is braced for more demostrations and a general strike. over the weekend, thousands of protesters blocked roads to the territory's main airport. the skies above our heads are getting busier and busier with the number of air passengers expected to more than double, from today's 4 billion
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to 7.8 billion over next 20 years. and so, there's renewed focus on ensuring the skies stay safe, but also improving the efficiency of air space, fitting more planes, into the same space. one firm doing just that is uk—based air navigation solutions. it's only five years old but the company aims to reach 98% efficiency by 2050, when it comes to traditional air traffic control systems. with us now is henry game, managing director, air navigation solutions. welcome to the programme, nice to see you. so, talk me through what you offer, because it is one of these things that i just assumed there was one system, air traffic control is just lots of skilled people making sure that planes stay safe both in the skies and on take off and on landing. why is your system different? as you said, we
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we re system different? as you said, we were established five years ago as a new business into the uk market and that brought initially competition, which is the first part. in doing that, we have established our business activities at gatwick and edinburgh in delivering air—traffic control as well as engineering services. from that, it is about looking at how air traffic is actually delivered from the airport's perspective and looking at where technology, processes and procedures are ultimately supporting that with our training that our people can deliver. how is what you offer different to what is currently in place of? today it is all about being tailored in our approach to oui’ being tailored in our approach to our partners and customers, really understanding what it is they are trying to achieve. and from there, whether that is providing people and training, whether that is in terms of engineers, but also from that, looking at where you can put new systems and technology which is out there in the market, the industry is evolving. quite clearly, something has to change because with those
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staggering passenger numbers, the growth in global passenger travel means that we are going to have to fit more planes into the same amount of sky. does your technology let you do that? that is an industrywide theme and i think the interconnected ability between the whole system which enables passengers to go from gatwick to malaga, let's say, is across multiple industry bodies. what we are doing at this moment in time is the uk is to look at how efficiently we can operate around the airport itself, moving aircraft safely, and them into the sky is in the most efficient way. recently there was a disruption in france because of air traffic control problems, this seems to be a problem which occurs quite often, that is the oppression we get as passengers, especially if you are stuck in an airport — how can you convince someone airport — how can you convince someone like gatwick airport that you're better than what they are already using? i think ultimately we
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have demonstrated that from the beginning of the evolution of air navigation solutions. the contract was let at gatwick as a changing partner. how do you convince them, you have only been around five yea rs, you have only been around five years, and from their perspective, they have got to get this right? yeah, the impact of it is part of the architecture of the system i talk about. aeroplanes travel through different parts of the network to get to places and if something within that doesn't work for whatever reason that might be, ultimately, the system's priority is about being safe, and that is the key pa rt. about being safe, and that is the key part. but we have demonstrated at gatwick and edinburgh that we have transitioned our operation successfully and have transitioned our operation successfully a nd sea mlessly have transitioned our operation successfully and seamlessly in order to now build for those customers on what we can deliver going forward. thank you for explaining all of that and it is really interesting because it is about skills and having the right people to do these jobs which are right people to do these jobs which a re really right people to do these jobs which are really high skilled jobs.
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in a moment we'll take a look through the business pages, but first here's a quick reminder of how to get in touch with us. our 0ur correspondence our correspondence have your business world covered, on—air, online and on your bbc news app. the bbc business live page has the latest business news, and we want your opinions, too. get in touch with us. richard is back in the studio, they're chuckling away because we have got this incredible combination of beyond fried chicken and wind. and we will explain. they are not
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related. they could be, it depends what is in the chicken. tell us about this, this was in atlanta, georgia, kfc trying to get a sense of what customers might make of their pla nt—based chicken. plant—based chicken, very much done asa plant—based chicken, very much done as a trial, but the amount that they sold in a single day in atlanta equated to what they might normally sell ina equated to what they might normally sell in a week on the chicken front, so sell in a week on the chicken front, so it was hugely successful. it is too early to say that this is a kentucky fried miracle, as it was described, and they are basically going to go away and have a think about how successful this pilot was before they roll it out to. in the uk, we know that the pasty and pastry chain gregg's did its vegan sausage rolls, but it was all about headlines, wasn't it? of course, and
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there is this new word which sally introduced me to earlier, which was flexitarian, people who may be just wa nt flexitarian, people who may be just want to eat a bit less meat. flexitarian, people who may be just want to eat a bit less meatlj flexitarian, people who may be just want to eat a bit less meat. i am one of those! you can see that gaining in popularity, certainly. and also you have got people like the un saying we have to do this to save the planet, and if we are going to feed this enormous population which is growing by the minute. we have heard from quite a few of you, are you becoming flexitarian, eating less meat? quite a few of you have beenin less meat? quite a few of you have been in touch. this one on twitter says... beyond meat is gross, i'm sorry, it is packed with sodium. this one says, i find plant—based burgers have a better taste. she is looking forward to trying kfc‘s offering. this one says, the cooking is still not the pros healthiest, we actually don't know, it is still deep—fried, i guess. actually don't know, it is still deep-fried, i guess. we will see you
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tomorrow! hello, good morning. it is going to be quite an unsettled week of weather ahead, wet and windy at times and by the end of the working week it is looking quite cool for early september. today there is a bit of rain in the forecast, mostly towards northern and western areas of the british isles. further south and east it is drier and brighter about turning cloudier in the afternoon. you can see on the pressure chart our weather front moving towards north—western areas of scotla nd moving towards north—western areas of scotland and northern ireland. the rain pushing eastwards and it will be quite heavy at times. further south it is a drier picture. always quite a lot of cloud, some outbreaks of drizzle. the best of the brightness and sunshine will be in the south—eastern areas of england. a little bit warmer than it
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was yesterday, that is because the north—westerly wind has become a bit more south—westerly. it is still rather brisk, though, particularly towards the north. we will keep the breeze overnight tonight. the showers will continue to push eastwards. for many of us i think it will be a dry night ahead, a lot more cloud than last night and temperatures will be higher. a milder start tomorrow morning then we saw early this morning. double figures across—the—board. some mist and fog, poor visibility again for western coasts heading through tomorrow morning. we have also got some showers and rain pushing into north—western areas of scotland. another north—west, south—east split. this is the cold front pushing down. heading through tuesday night, our cold front is continuing to move its way south—eastward so it will give some
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outbreaks of quite welcome rain for east anglia and the south—east of england as well. it is clearing away from the kent coast by the time we get to wednesday lunchtime and we have got so much cooler air in behind, so temperatures will be lower on wednesday and for much of the rest of the working week. there will be some showers and a bit of sunshine. look at these figures, a lot lower. there will be quite a chilly north—westerly wind blowing as we head through thursday, and on friday a few showers but some sunshine at times.
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you're watching bbc news at 9 with me, carrie gracie. the headlines... downing street warns conservative mps to back borisjohnson or face the sack, ahead of a critical week at westminster. potential tory rebels are told they will "destroy" boris johnson's negotiating position, if they support a move to block a no—deal brexit. what we want to see is all conservative mps rallying behind him this week, making sure he has the best opportunity to deliver on that commitment. it is obviously a particularly confrontational approach and i think designed, frankly, to realign the conservative party, to transform the conservative party very much in the direction of a brexit party.


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