1
00:00:00,000 --> 00:00:02,680
Speaker 1: And as I say, Peter Lewis, our Asia business correspondent,

2
00:00:02,720 --> 00:00:05,440
Speaker 1: is with me right now, hy Peter, Good evening, Heather.

3
00:00:05,480 --> 00:00:08,959
Speaker 1: All right, So what's going on with the economy in China? Slowing?

4
00:00:09,680 --> 00:00:12,040
Speaker 1: Slowing quite a lot, in fact, because if you look

5
00:00:12,080 --> 00:00:15,400
Speaker 1: at the data that came out earlier this week, retail

6
00:00:15,520 --> 00:00:19,560
Speaker 1: sales and industrial production at the lowest levels now of

7
00:00:19,600 --> 00:00:22,319
Speaker 1: the year. And this has been going on for three

8
00:00:22,400 --> 00:00:24,640
Speaker 1: or four months, so it's not just a one off,

9
00:00:24,680 --> 00:00:29,159
Speaker 1: it's not just weather related factors. There clearly is a

10
00:00:29,240 --> 00:00:32,320
Speaker 1: gradual slow down. The thing that's helping the economy is

11
00:00:32,360 --> 00:00:35,200
Speaker 1: actually the first half of the year was pretty good.

12
00:00:35,560 --> 00:00:39,080
Speaker 1: The economy grew about five point three percent. So unless

13
00:00:39,120 --> 00:00:42,239
Speaker 1: we get a really sharp slow down now in the

14
00:00:42,280 --> 00:00:46,160
Speaker 1: remaining few months of the year, which threatens China's five

15
00:00:46,200 --> 00:00:49,040
Speaker 1: percent growth target, I don't think the authorities are going

16
00:00:49,080 --> 00:00:51,200
Speaker 1: to be too worried. They're not going to rush out

17
00:00:51,880 --> 00:00:55,640
Speaker 1: and do lots of stimulus. The reason why we're seeing

18
00:00:55,640 --> 00:00:57,800
Speaker 1: this slow down is it comes down to that old

19
00:00:58,480 --> 00:01:03,120
Speaker 1: theme again. Property property carries on falling. The price of

20
00:01:03,200 --> 00:01:06,160
Speaker 1: new homes and existing homes just seems to keep on

21
00:01:06,240 --> 00:01:09,559
Speaker 1: declining month after month. If you look at the data

22
00:01:10,000 --> 00:01:14,200
Speaker 1: in Beijing property prices. New home prices now down nineteen

23
00:01:14,280 --> 00:01:18,120
Speaker 1: percent from just one year ago, and that has a

24
00:01:18,120 --> 00:01:25,720
Speaker 1: big drag on overall consumer household economic sentiments because property

25
00:01:26,200 --> 00:01:30,200
Speaker 1: is the biggest part of a Chinese household's assets. Sometimes

26
00:01:30,200 --> 00:01:33,000
Speaker 1: they have two or three properties in fact, which are

27
00:01:33,000 --> 00:01:35,880
Speaker 1: owned by sort of several generations of the same sort

28
00:01:35,880 --> 00:01:40,560
Speaker 1: of family. But this is really holding back the economic

29
00:01:41,480 --> 00:01:45,720
Speaker 1: growth in the mainland. What is doing well, surprisingly maybe

30
00:01:46,160 --> 00:01:48,560
Speaker 1: given that there's a trade war going on with the US,

31
00:01:48,920 --> 00:01:52,600
Speaker 1: is exports are holding up very well. Now they've collapsed

32
00:01:52,640 --> 00:01:55,920
Speaker 1: to the US, they're down by about a third now

33
00:01:56,000 --> 00:01:59,320
Speaker 1: over the past few months, but they're really growing in

34
00:01:59,440 --> 00:02:02,440
Speaker 1: other parts of the world, particularly the emerging markets of

35
00:02:02,800 --> 00:02:07,160
Speaker 1: Southeast Asia, Middle East, Latin America. And this is deliberate

36
00:02:07,640 --> 00:02:11,799
Speaker 1: part of Jijiping's policy to go and really move away

37
00:02:11,800 --> 00:02:15,160
Speaker 1: from being dependent upon the US and finding new sources

38
00:02:15,200 --> 00:02:18,839
Speaker 1: of business, new sources of growth and where they can

39
00:02:18,919 --> 00:02:22,400
Speaker 1: sell Chinese goods to And that's working very well. So

40
00:02:22,480 --> 00:02:25,240
Speaker 1: that is holding up the economy. If it hadn't been

41
00:02:25,280 --> 00:02:28,920
Speaker 1: for exports, the economy will be far worse. Yeah, And

42
00:02:28,960 --> 00:02:30,840
Speaker 1: speaking of the relationship with the US, where are we

43
00:02:30,880 --> 00:02:35,880
Speaker 1: at with TikTok. Well, Scott Bessens, who was in Madrid

44
00:02:36,440 --> 00:02:39,480
Speaker 1: at the beginning of the week meeting his Chinese counterpart

45
00:02:39,600 --> 00:02:43,000
Speaker 1: Hurley Feng, who is the Chinese Vice Premier and responsible

46
00:02:43,040 --> 00:02:46,399
Speaker 1: for negotiating these trade deals, announced that a deal had

47
00:02:46,440 --> 00:02:49,640
Speaker 1: been reached with TikTok. Now, you remember the bill that

48
00:02:49,760 --> 00:02:53,240
Speaker 1: Joe Biden signed into law a year or so ago

49
00:02:53,840 --> 00:02:58,239
Speaker 1: called for either TikTok to be sold by byte Dance,

50
00:02:58,320 --> 00:03:02,680
Speaker 1: the Chinese company that owned it, to an American controlled company,

51
00:03:03,240 --> 00:03:06,120
Speaker 1: or it had to shut down in the US. So

52
00:03:06,240 --> 00:03:09,720
Speaker 1: discussions over this have been going on for a long time,

53
00:03:10,200 --> 00:03:14,120
Speaker 1: and it appears that now TikTok will be put into

54
00:03:14,680 --> 00:03:18,239
Speaker 1: a US company that's eighty percent owned by US investors

55
00:03:18,320 --> 00:03:21,960
Speaker 1: like Oracle, and twenty percent by Chinese investors. So first

56
00:03:21,960 --> 00:03:25,200
Speaker 1: site all well and good, looks like you know, they've

57
00:03:25,200 --> 00:03:28,440
Speaker 1: done what they said they would do, divest the company.

58
00:03:28,480 --> 00:03:31,040
Speaker 1: How to byte Dance put it into a US company.

59
00:03:31,440 --> 00:03:34,640
Speaker 1: But here's the thing. The whole thing about TikTok is

60
00:03:34,680 --> 00:03:39,000
Speaker 1: its algorithm. The algorithm is the secret source behind how

61
00:03:39,080 --> 00:03:44,520
Speaker 1: TikTok works, which directs people to certain videos, and the

62
00:03:44,640 --> 00:03:48,160
Speaker 1: US sees the algorithm as a national security risk because

63
00:03:48,600 --> 00:03:51,960
Speaker 1: it could be used for propaganda purposes, could be used

64
00:03:51,960 --> 00:03:55,480
Speaker 1: to mislead young people in the country, influence elections, and

65
00:03:55,520 --> 00:03:58,680
Speaker 1: so on. So the law had always insisted that the

66
00:03:58,880 --> 00:04:03,080
Speaker 1: algorithm is what needs to be put into the US company.

67
00:04:03,600 --> 00:04:05,840
Speaker 1: Now this is where it looks like it could well

68
00:04:05,880 --> 00:04:09,080
Speaker 1: be another taco trade. In other words, Trump always chickens out.

69
00:04:09,440 --> 00:04:11,960
Speaker 1: What it looks like according to the Chinese is that

70
00:04:12,400 --> 00:04:16,640
Speaker 1: they will remain keep control over the algorithm. It will

71
00:04:16,640 --> 00:04:19,159
Speaker 1: stay in Beijing, it will be owned by byte Dance,

72
00:04:19,440 --> 00:04:23,640
Speaker 1: and they will license it to this American company. Now

73
00:04:23,680 --> 00:04:27,320
Speaker 1: that is very different. A licensing agreement is very different

74
00:04:27,360 --> 00:04:31,480
Speaker 1: from it being divested and sold to the American company,

75
00:04:31,480 --> 00:04:35,040
Speaker 1: because it means the Chinese company Byte Dance, will still

76
00:04:35,360 --> 00:04:39,760
Speaker 1: retain control over the algorithm. So it looks like, once again,

77
00:04:40,120 --> 00:04:43,440
Speaker 1: this could be another win for China, and how it's

78
00:04:43,480 --> 00:04:47,520
Speaker 1: being portrayed by Scott Bessant is not quite what was

79
00:04:47,560 --> 00:04:51,920
Speaker 1: initially envisaged when the law was signed into effects by

80
00:04:52,000 --> 00:04:55,119
Speaker 1: Joe Biden. We'll learn more today because Eujinping and Donald

81
00:04:55,120 --> 00:04:57,359
Speaker 1: Trump are going to speak about it on the phone

82
00:04:57,600 --> 00:05:00,840
Speaker 1: and see if they can agree the terms of this fascinating.

83
00:05:00,839 --> 00:05:02,400
Speaker 1: We'll keep an eye out for that. Peter, as always,

84
00:05:02,400 --> 00:05:04,359
Speaker 1: thank you very much and have yourself a lovely weekend.

85
00:05:04,400 --> 00:05:07,520
Speaker 1: That's Peter Lewis, our Asia Business correspondent. For more from

86
00:05:07,560 --> 00:05:10,880
Speaker 1: Hither Duplessy Allen Drive, listen live to news talks it'd

87
00:05:10,880 --> 00:05:14,039
Speaker 1: be from four pm weekdays, or follow the podcast on

88
00:05:14,160 --> 00:05:14,960
Speaker 1: iHeartRadio