guy: everyone seems to be interested in china for the july numbers where worse, nevertheless we have not seen a significant improvement. the data was worse today. raised a number of questions, most certainly, will be chinese authorities react and how? some people had been drawing a line between the week july data and between august. might they be tempted to do some thing similar? decide.t let the market talking about foreign exchange, -- a lot of reserve money being spent on stocks. saw, it does you -- thefe haven trade euro is higher on the back of this chinese data. it will be interesting to see what happens when the book is handed over to london. oil has weekend on the back of this, you are getting a risk off theme. that is being represented clearly in your dollars -- euro-dollar's. anna: let's see how stocks are moving in hong kong. how is that we trade picture playing out -- weak trade picture playing out? y: it briefly rose, it has lost momentum, it is waiting for a fifth consecutive day. the shanghai composite is down 1.5%. trade data out this morning shows that exports in august fell 5.5%, adding to concerns that the economy there is slowing. chinamall caps on the index are following. -- falling. have plunged on speculation that authorities would not help with prices. in hong kong though shares are slightly upward. eight shares are rising. 1.6%, iti is down briefly rose in the morning, but lost steam. we had the report showing that the economy contracted in the second quarter, less than previously thought. it tracks 1.2% in the second quarter. pioneer, there has been a surging, more than 8% after the electronic maker says they began working with a german maker to develop automated driving maps. the japanese yen is gaining momentum, reversing declines from earlier. the nikkei is feeling that downward pressure. the oil sector is rising. largest news that the oil and gas producer is actually going to put a takeover bid for oil surge, and $8 billion takeover bid. it is up 2.7%. asian shares all in all on the outside. anna: thank you. let's go to beijing for more on that trade data out of china. we are joined live by our chief asia economist. the july numbers were poor, the august numbers were great, what does this tell us overall? think that the concern is that china's domestic and external growth engines are misfiring. weekugust export data was -- poor with the second month contraction of sales. if you look at home, the area of new real estate continues to shrink. that is the main domestic driver of demand. -- poor exports, and real estate cannot be good news for the gdp data in china. the put that 7% target --et -- set at s a risk. anna: there have been speculations that poor results could lead to government interventions with that impact? would that be away the government chooses to intervene? tom: i think that is the key question. yuan is one of the reasons that china's exports are contracting. it has contracted the u.s. dollar. it is of double digits -- up double-digits in real effective terms of the last year. that is one of the reasons china is so competitive and international markets. showing thatsaw fx the central bank sold 94 billion to defend a currency at a level which is crimping export growth. in the long-term it looks like a difficult position to sustain. >> -- thank you very much that way -- guided thank you. anna: do you think the chinese government will take action? that is the twitter question. -- be trade data prove guy: will this be the trigger? let's tune -- turn to another country looking for a boost -- japan. the latest eta shows that the economy shrank less than expected in the second quarter. 1.2%.ized gdp fell willie is there with more. talk about the numbers. willie: people get excited about japan and the economy being a little less bad in the second quarter than expected, it shows you where we are. it tells us that japan is slowing along with the global economy, even with the yen down. done a greatj has deal to boost the economy. it is not filtering to the consumer or business sector. it is not doing enough to encourage executives to rage weight -- raise wages. consumer spending is weakening. retail sales are not doing well. this is just for global stock market -- this is before the global stock market crash. this is before the chinese crash of the nikkei falling. in many ways you have to expect it worse. this leave thes government attempts to generate inflation in the japanese economy? we have a chart of the ddp deflator. upwards,en trending but it has just fallen away in conjunction with other measures of deflation, which also seem to be weaker. willie: i think the government is realizing that deflation is a distraction, that is not the problem it is a symptom. the problem is a lack of confidence. when i speak to executives, households, average workers, no one believes that five years now -- from now lives will be better. they do not believe their living standards will increase in five years. the government needs to figure out a way to increase confidence. the best way to do it is for the government to step up with reforms, alone trade barriers, increasing innovation, cutting red tape. there is a lot the government to do with taxes. it is not. so far the focus is on the boj. -- corroroded almonds denomics. we need the prime minister to do his job. anna: he will become the longest-serving prime minister in more than four decades. thank you very much. guestoming up, our next says the trade data out of china -- he is thee director, richard tamayo. we will figure out where he is from an a moment. all things china and moment. ♪ london that:13 in means it is 7:30 in frank for -- frank for. imports of dropped leaving a trade surplus. it heightens concern about a slowdown. guy: japan's economy contracted less than initially expected. a smaller than estimated decline and consumer spending boosted the overall figure. japan is facing growing risk from a slowdown in china. we have been talking about that. cameron has severed his first house defeat since winning the general election in may. it came as parliament voted by apply fora 12-285 to the rules to the eu referendum. the regulation restrict the announcement government officials can make during an election. guy: another international deal we think is brewing, japan's insurance company is in talks to my -- buy lloyd's of london. >> we are talking about in excess of $4 billion. amlin could be snapped up as soon as today. they will be funding this with a bit of back loans. it is a nice premium, 11% where the premium market capitalization currently stands. it could happen today. let's look of a flurry of deals that you are seeing across the sector. billionth being spent, $81 billion, more than double the amount we saw in terms of insurance enemy last year. into new growth, it is slowing down in their hometown, you'll see asian insurers in particular flashing cash abroad. two months weo have seen key players both .napping up u.s. insurers tw there is an influx of reinsurance capital. it is pushing down the prices. we are seeing pensions, hedge funds, piling into insurance as they need a vacation -- diversification. diverset uncorrelated vacation -- diversification. consolidation is the way forward. just a couple of weeks ago we were hearing from amlin, no, we are not for sale. the chief executive had been speaking two weeks ago, dumping the speculation, he said overall, we are not for sale. look what seems to be be circulation -- the best speculation. deal, we see the drivers, profit falling. they announced profits were down in excess of 3%. there is continued pressure on the reinsurance prices. this is what makes the deal overall worthwhile. the fact that you are seeing profits under pressure, consolidations to be where to set. -- where it is that. -- at. guy: will look for the deal a little later on. a >> update, shanghai is continuing to weaken. 2% as wewn by nearly speak. we continue to soften towards the back end of the session. of having an impact on what is happening elsewhere. euro-dollar continuing to spike higher as people seek sake -- safe havens elsewhere. anna: a similar move into the yen -- it continues to weaken. by richard. great to see you. thank you for coming in. , how doart with china you react with the drop next port -- in exports? richard: it is not pretty data. it will live -- do little to discourage talk of hard landing in china. the exports up slightly from last month. probably the eyecatcher is the import figure. going back to exports, you are seeing the devaluation taking effect. 14.3 is very weak. guy: what do they do? richard: in terms of market reaction, never straightforward, but i could see equity markets begin to ease. you could see commodity currencies we can -- weaken. as we are seeing with euro-dollar, perhaps some euro strength and rivers carry it. anna: how do we see the authorities responding? what is the most likely reaction. richard: i think they have to be careful with stimulus. from g-20thing is they committed to be transparent about currency intervention. to be cautious, the u.s. has a close eye on this because the import figures. world exports of china only account for 1% of their gdp. guy: will have more of an impact on europe? they are more exposed from an economic point of view than the u.s.. the u.s. is not likely to feel it. richard: true. setting aside a direct response in the dollar because there is a historic relationship between the dollar and china. impact it will have an purely because of where we are in terms of talking about the fed and interest rate hikes as soon as next week. anna: what about emerging markets? we saw a great piece by simon thatdy about the role china plays in the global economy. he points out that only 2.5% of global gdp is exported to china. but some emerging market currencies have way bigger exposure. countries that extorted china, for example. richard: you can be academic about it and talk about the fact that the exports they go to china supply a commodity impact. you just look at the currency reaction. this week we have seen new six-year lows in the new zealand dollar, the aussie dollar, right across emerging market currencies. is it a 17ia rupiah year low. we are seeing more of a currency reaction across the asian space in china -- them 5 -- than china. guy: we have seen a series of how far through that process are we? people continue to understand how china will affect them. richard: from a currency perspective, a brave person would call the end of it. we are seeing signs of it stabilizing. if you look at the moves themselves, they are not as dramatic as the headline suggests. the key talking part of the market will be as attention shifts towards the fed and the impact. talking about the chinese authorities and what they might do, we saw the date of the told us just how much money -- how much of their foreign exchange reserve they spent in trying to fight against the market. risku think there is a that people draw a line between what the authorities did in august and what they might do in the future? do you expect them to continue to spend that kind of money in propping up their currency? richard: it is about sustainability. the figures yesterday are eye-catching. a $93 billion drop in fx reserves, the biggest on record is a substantial figure. at the same time, better than people expected. there was talk of 200 billion potentially. the whole mechanism of them stepping in to intervene involves them selling dollars to support the yuan, that can only go on for so long. guy: how long can i go? -- how long can they keep that process running? reserves,substantial we used to talk about massive reserves, now we are questioning that. richard: this is a bit of a shock. 3.273.erves are there at what they desperately need is a slight pickup in chinese data. anna: what does this do to defend debate? the fed debate. richard: people talk about a perfect storm in china. this is really unfortunate timing for the u.s.. consensus view is forming around the fact that the u.s. economy is probably ready to absorb policy normalization. here we are an equity loans will probably derail it. the market in the u.s. seems council with the fed raising rates. richard: september as soon. the last thing they want is a u-turn. if anything, no major cost in delaying into october december. in the context that they are out there for the global economy. anna: do you think the fed would feel more comfortable raising rates if they saw the chinese taking action? richard: i think the outlook is one part. they do not have direct exposure to the same extent europe does. they want to feel like the global outlet is stable. they last thing they wanted to see was the equity route we have seen. point, i think no direct exposure, but they are watching it through to the likes of brazil. the whole timing of this i'm curious about. china's economy is slowing down, do we understand that? to have our arms around an understanding of how far they will go in the policy response? i am listening to fed officials, they are playing it down. they pushed a little bit harder -- they seemed more concerned of the g-20, but they are definitely playing it down. richard: they are. they do not want to pre-commit to anything. friday they were talking about the u.s. economy being ready. the rest of the world is not want to be u.s. to raise interest rates. they have to stay on track and focus on the u.s.. anna: thank you. guy: you can weigh in on the story. will the chinese trade data trigger for the -- further stimulus. we heard the possibility of more changes coming through for currency. up, merkel, and cameron has said how many refugees they will take and what they will spend ahead of a europewide announcement due tomorrow. we will break down those numbers. guy: a tiny island off of the northwest coast of england has become a world leader in bitcoin. ♪ guy: 6:30 in london. anna: china's exports fell. imports dropped as well. this is the second monthly contraction and exports and it heightens concern about the slowdown in the world's second-largest economy print guy: -- economy. gdb shrink -- the shrank. slowdownfacing risk of with china. anna: reports from south korea say that samsung is preparing to cut 10% of their workforce at their headquarters. according to the economic daily, the job losses will include staff in human resources, finance relations,. the economy -- the company is undergoing pressure after a lukewarm reception of a new phones -- of the new phones. guy: at the markets we are around half an hour away from the start of european news flow. let's find out what is going on in asia. havens in demand some of that is the theme for today after we see the chinese data that is underwhelming. a slight improvement in terms of exports compared to july. still significant contraction. more than 40%. the havens are definitely in demand. this is a showing how the dollar is dropping versus the yen. theyen is spiking higher, dollar is dropping versus the swiss franc, you are seeing those havens and event. -- demand. this is the dollar downward trajectory. many people trying to reassess what we will get next week. the fmo see meets next week. will we see the first rate hike since 2006? could we see the rate rise in september. the dollar is sinking as many people feel as that will be delayed until later in the year. chinese data showing that exports are getting quite the list --lift. after of course one day the last set of trade with numbers came in. could it be a day after again that we see another talk at the foreign exchange market? back to you. the refugeego to crisis in europe. the european commission president will announce quotas and compensation for the relocation of refugees. three of europe's leaders have already laid out plans. >> those who need protection get reconnection -- protection. those without an outlet to stay have to leave. that is why we spoke about handling the incentives. christ france is ready to do its share, the european commission proposes, or is going to propose that 120,000 refugees are shared over the two years. -- the next two years. that represents 24,000, we will do it. >> we are already be second-largest donator of aid including food rations, giving 1.6 million access to clean water, and providing education to a quarter of a million children. last week we managed to contribute one million pounds. nichols.s go to hans we are beginning to get the national response, we are waiting for the eu response. how much tension is there tween the council and commission? -- between of the council and commission? hans: some of that will be played out in the council versus commission. thatommission is clear will unveil plans tomorrow for 160,000, that is the total because in july they haven't -- had an agreement for less. we just heard their willingness to help. here's how the fund would work, the proposals are to set up a billion euro fund. within that fund for every country that recitals a refugee -- they get 6000 euros. another 500 euros if you actually receive the migrant upon entry. in the first port of call, countries like italy and greece. here is the penalty, you could have fine links to gdp for refusing to meet quotas. for countries that are opposing this, hungary, slovakia am a they have the smallest gdp. the fines were not staying as staying asld not much as germany. here is where they would go. 160,000 overall, germany would take the bulk at 31,000. france would have 24,000. the u.k. would take 20,000. spain would take 15,000. slovakia would take 1500. mr. cameron when he was speaking yesterday talked about his unique approach, he wanted to accept refugees from the syrian conflict with the in turkey, and lebanon that have not paid for smugglers to make their way up to europe. have a listen. david cameron: we will continue our approach of taking refugees from the camps and elsewhere in turkey, jordan, and lebanon. this provides refugees with a more direct and safe route to the united kingdom, rather than risking the hazardous journey which is tragically cost so many lives. we will continue to use the established process for identifying and resettling refugees. when they arrived we will give you them a five-year humanitarian protection visa. we will significantly expand the criteria we use for existing people. sense of how you a much dissent and concern there is in european capitals, the country of denmark has taken out and add in arabic and english in lebanese newspapers warning refugees not to come to denmark weighing have cut benefits by $50 -- 50%. anna: thank you bring much. -- thank you very much. guy: let's return to the markets now. let's given -- get an assessment of the chinese story. good morning. more data out of china. how should i interpret it? >> we have to be careful when we look at a year on year number. we came from a negative base effect. the fundamental story on china is the economy has flown down -- slow down. the sectors that have slowed down in a big way are the sectors linked to the rest of the world. the secondary sector, construction, but also manufacturing. if you go and look at the other sectors of the chinese economy things like service, they are actually holding up quite well. the financial sector has been absolutely booming. i would expect that not to last. the point is different things are going on, but what we in the rest of the world feel tied into, what many asian economies field tied into is that secondary industry. that has slowed to low thing of single-digits. anna: that slowing, where is the impact going to be felt worse? other asian emerging-market countries? >> we have to remember what is the final story? the fundamental story is the excess capacity buildout that you saw in china, plus the excessive investments they came through. that have -- has to be unwound. we have seen commodity producers, other asian economies feeding into that. that is a you have the greatest exposure. i also think it is important to remember there are stabilizers at work. slightly -- we do not normally think of it but the decline in the oil price is helpful to another economies -- a number of economies. guy: how will this affect policy response? >> there has been an interesting debate going on, on one hand you saw advisers saying the u.s. should not tighten. one of the best statements was from fisher at jackson hole they said the best thing he said could do is ensure that the u.s. economy is stable. what is the danger in the fed for night hunting -- not tightening? tightens up, we see wages pick up, we are talking about moving from altra accommodative to less. if wages were to pick up, we always have this discussion, the phillips curve, if our to happen and the fed is so far behind the curve, you could get more volatility coming in. that would be more dangerous for the rest of the world. i think it depends on the u.s., what is going on there. the labor and housing market, overall. that is that an argument central bank governors and --ance ministers listen to rather than focusing on short-term turmoil? and -- >> if we think about the turmoil, a lot of it is links to china's excessive leverage them. -- boom. if you look at the levels, they went up in the post crisis. part of the leverage that we saw in the emerging economies was very much the spillover from qe policies from the rest of the world. debate if theodd u.s. is not supposed to tighten because it could negatively impact somewhere else. anna: thank you very much. guy: let's move on but no other government on the planet has welcomed digital currencies as warmly as the isle of man. this tiny island off the northwest coast of england has become a world leader in bitcoin business. we paid a visit to see how many businesses it would it act -- except. >> the aisle of man is a bit -- essentially a rock, it is known for a motorcycle race. it is a land out of time, and land of horse strong trams -- drawn trams. edge ofly leading technology, in particular, bitcoin. we are here at the airport waiting for our flight. we are going to see how they are trying to attract as many bitcoin related businesses as possible. we are going to try to use that --ng to pay for things bitcoin to pay for things. thank you for picking me up. for this journey i would like to pay for bitcoin. >> no problem. scan it. >> it is not easy to use. >> a know it is not. -- no, it is not. >> i was not expecting that. i have never used the app, obviously it is not as in tune as i hoped. i can get your coffee. can i pay using bitcoin? i can. i don't have internet. ok wi-fi, will do that. let me try. there we go. great. we have been on the isle of man for two days. it is time to check out of the hotel. we will see we can pay it with bitcoin. >> do you hope for that? >> no, so few places actually take it. i doubt they will. high, checking out. room one a nine -- 109. curious, can i pay with bitcoin? >> i'm afraid we do not expect -- except it. do have another payment method? >> do you take american express? anna: he would find something to pay with. a lot warmer and easier to pay for things. up, how russia's oil producers are beating their western counterparts. we bring you some of the top stories from bloomberg business. ♪ anna: welcome back. here are the stories you need to know this morning. in august exports dropped the imports also dropped . this is the second monthly contraction in next work that highlights concerns about a slowdown in the world's second-largest economy. anna: japan's economy contracted less than expected. gdp shrink by 1.2%. that is compared to estimates of 1.8%. a smaller than estimated decline in consumer spending boosted the overall figure. japan is facing growing risk of a slowdown from china, its biggest trading partner. a haslimony -- l in traders meeting. including. sold your staff to google you would be forgiven. instead, ways the cofounder is busy building a mentor. guy: we have more from tel aviv. elliott: i have him with me right now. as you can see from your t-shirt, your main thing right now is feex. this is your baby right now. >> that is right. i believe there are still many revolutions that are my destiny. elliott: how does this work? maybe people in the united -- outside of the united states are not familiar. >> it is the biggest financial secret. is they have $600 billion in financial fees in the u.s. every year. people do not know they are paying them. it is the biggest secret because people do not know. this is mainly around retirement iras, the(k)s, american retirement plans. these fees acutely, big-time. onecompound affect might be third of your retirement will be lost in fees. you do not even know it. elliott: they are using crowd sourced data, you're also using -- trying to save people time and money. it is consumer focused. >> exactly. timee trying to save them and money. on average we save a user approximately $50,000 on their retirement. elliott: you make money on referrals. that would be excluded, perhaps users would not have a full choice? >> not exactly. the way you reduce fees, or save money is by taking action. sometimes the action might be switching what you have on your current portfolio, expensive funds into inexpensive. or possibly rollover one program to another. or you could negotiate fees as an employer you could negotiate. depending on what it is, in some cases we do get referral fees. for example, if you change your then wento an ira plan, will get referrals. would be enough, but you are dealing with store s, move it,r flight which one of those which you waze?ght as the next is whichal question one will be faster than unicorn. i believe they all are, they are all falling a lot of real problem for consumers. in general, if you create a lot of value, you will be creating a unit -- a unicorn company. elliott: what would you tell someone looking to set up a startup right now? they find themselves in your position. >> focus on the problem. follow love the problem, not the solution. as long as the problem is still out there, keep working. as long as you can make an impact, keep working. if you reach a point in time where you are maybe not sure if you can solve the problem, or maybe there is someone else who will solve it, that would be a time. thank you so much for joining us. here in tel aviv for the festival. fall in love with a problem, perhaps he will solve a billion-dollar problem. guy: thank you. anna: let's take a look at some of the top stories on bloomberg. global head of economics still in the studio. where should we start? should we look at performance of russian oil companies? >> yes, maybe it is the surprise of the day to see that the russian oil companies are doing that in the western peers. they are outperforming bp and shell. it is not entirely intuitive. charts, this is normalized from the beginning of the year. light, bp, blue royal dutch shell bringing up the rear. theirare other factors in -- are there any other reasons behind us? put this in context. >> there are a couple of things, one thing is the russian -- russia has low capital costs. it is not incredibly difficult to do. part of it is the currency effect, the depreciation of the russian ruble. lastly, it is the variable tax rate. who bears the brunt of the low oil price is much more the government. guy: bp has stock in russia. are any things that contribute to this likely to change? >> in the short-term, no. i think in many ways if we had a new oil supply shock today that would be a negative thing for the global economy. oil price offers a buffer. declinethe oil price came from the supply side, which is positive for the global economy. i think going back to some of the things you highlighted, is our good news items in terms of stock performance. question is how does russia's move forward as an economy here? have you take that economy ahead? i am quite concerned about the ability to invest and develop. i was wondering what you thought about the industry? right now it seems it's good to drill holes, but what about the future? >> it will become more difficult, particularly with sanctions. they cannot import technology. thing that has been a big boom to the u.s. is fracking. anna: stay with us. guy: we will take a break, see you in a moment. ♪ anna: tough trade. chinese imports and exports continue to weaken the market. -- investor's seek safe haven on the back of bad chinese data. anna: on the block. a japanese insureds says they are in talks to buy the london-based company in a deal that could be worth more than $4 billion. ♪ guy: looking to count down. i am guy johnson. anna: i am and edwards. welcome to the program. we've had a flurry of data from asia, particularly the chinese trade numbers. set of data port coming out of china. july's numbers were good. or a little bit better, but not that much of an improvement. asking whethere this weakness that we are seeing , is that going to encourage more stimulus activity? did the tengion explosion have any impact desk to dt tianjian have the tea engine an impact deck of -- impact? .2% rise. a fair value to regulation that we have here on the terminal. the euro did spike a little earlier on on the back of the fact that we did see data coming through. shanghai has firmed a little bit. anna: let's get an update on the picture in asia. shery, things looking weak in the japanese market. shery: good morning anna. we are seeing the nikkei plunging to 20% today, as you mentioned -- 2.3% today. now at the lowest level that we have seen in quite some time. tradinged the day higher. he gave up all of its gains. now plunging their and erasing all of this year's gains. we have one hour to go before the close here in china. so far, it is lacking clear direction. the shanghai composite rising .2%. it was down most of the morning. now it is rising. trade data out of china shown the export in august fell 5.5%, adding to concerns of a slowdown. we had news that authorities are considering a circuit breaker for stocks in order to halt volatility. for 30 will stop minutes. now in japan, with the nikkei plunging, we had a report that second-quarter gdp was on track, 1.2%. a contraction less than expected. 1.5%.s 200 rising the energy sector -- oil producer made a multibillion-dollar takeover bid. ask you anna. anna: shery ahn joining us there. guy: we're talking about this amylin deal -- this ambulance deal. caroline hyde has the decent premium. caroline: they would offer that is compared to 4.92. are expect the directors considering it fair and reasonable. shareholders say they are sharebrought up 670 p and . what a fascinating 10 around, considering two weeks ago the chief executive, charles phillips, said no, we are not up for sale. we're not running a cells process. two weeks later, and the deal seems to be being -- seems to be being done. the reason, we know is rife amid the insurance sector. some $81 billion worth of deals being done so far this year. that is double the amount we saw this time last year. we are seeing the price points being crushed. the cost of insurance prices are going down. hedge fund managers are starting to put cash to work within insurance, because of diversification away from bonds, stock markets. they are getting into insurance instead. this is why we are seeing this flurry of activity. two japanese companies buying u.s. companies. now we see lloyd's of london, being snappedn up. quite a tasty premium. anna: thank you very much. we got some or m&a news. details from paddy power. they were in talks, but now it seems they've agreed on a merger. it is going to be caught paddy power betfair. deal,n terms of the betfair whole shareholders are it's going to- have its premium listed over in london. betfair to power and retain current dividend policy. this is going to be one of the world's largest public online betting and gaming companies with large-scale capabilities. -- guy: let's get back to the chinese data. saw week data in july. what does this signal in terms of growth? >> well, good morning. -- it adds to the sentiment in china. it is hard to see the catalyst that will turnaround chinese exports at the moment. manufacturers continue to struggle. look at one of china's biggest trading partners, japan. look at the gdp numbers. showing their economy. these are big customers for chinese goods. it is hard to see the export side of things taking over. anna: does this mean further government intervention? we might see further intervention? or raising questions about whether we will see that in terms of seeing the week number come through? it is going to have to come down to infrastructure spending to get the economy going. not to the other levers that the governor that's that the government has been trying to pull. people say it is disconnected from the real economy. we don't see that turnaround and exports coming. rather than rallying to rescue stock markets, looks like bricks and mortar and spending money -- and spending money might be the tonic. guy: thank you very much indeed. anna: sticking with the chinese story, you can join in on the conversation on twitter. this is where you will find this. trigger chinese trade further stimulus jacada -- stimulus? willette, will this further stimulate from the chinese? i don't think we should expect the large-scale desk the large-scale stimulus we saw back in 2008. -- the large-scale stimulus we saw back in 2008. in a world of very slow trade, you can go out into a big economy, depreciate your currency and hope that is the magic will it that fixes everything. it doesn't work. we saw the disappointment in japan. we saw in europe as well, it is not worth -- is not working. it has to be about domestic demand. that raises another question for the market. we still believe that qe policy , if weral can fix things get into a bleaker scenario? i am not forecasting a recession or the second half of the next year. but if we were in to be -- if we were to be in such an economy, what can policymakers do to address that? i think qe is no longer the effective tool. that means it is a fiscal tool that has to come back to the debate, which is exactly what we see in china. is very well to cut rates to stabilize stock markets , but something else has to happen for the real economy. anna: do you think we will see some physical stimulus from china echo michala: i think it will be fairly moderate. you haveisk scenario, to think about what is that policy response? seat -- if i am a european ceo watching the program, do i fully understand how this is going to affect my business or investment? because we make it stimulus coming further down the road. michala: i think it is quite modest and much more of a mastic focus stimulus. -- more of a domestic focus stimulus. you can see social initiative. i won't be looking for a new -- to boot. china's that levels have expanded significantly -- china's debt levels have expanded significantly. have we seen the devaluation of the currency. would it be more flagged this time around? also it wouldn't cost them so much. look at i think if we china's motivation for the current stimulus, there are three ideas. one is sdr membership. .econd is to the peg it china wants to have a competitive game here. if you think about what china's currency needs to do to get a 10% depreciation which is the type of magnitude we think of. you need to get to see and why somewhered to get cny around the dollar. that will come back and hit china and hit china in a negative way. i don't think this idea that they can push the currency down. will they lose control of the situation? will ec capital outflows that they are not -- will you see capital outflows that they are not able to manage? somewhat of a stricter application coming through, because they are concerned you could get more substantial outflows. anna: thank you. guy: we've got coming up next. we are going to talk to the global head. we will get his view of the china slowdown. all of that coming up, right here on countdown. ♪ guy: it is seven: 16. -- it is 7:16 in london. here are the stories need to know. anna: china's exports fell. this is the second monthly contraction and exports. heightened concerns about a slowdown in the world's second-largest economy. shrank 1.2% -- gdp in the three months through june. a smaller than expected decline in consumer splinting -- consumer spending. insurer has made an offer to amlin. their director says they consider the offer fair and reasonable. guy: what is happening in china and the global economy. -- mccullochack marcus and is joining us as well. -- mikayla markson is joining us as well. story?miss reading the james: i think all of the data we see is in the same direction. the economy is slowing. there's no question about that. from our perspective, some of the concerns are overdone. for something that was well telegraphed. authorities intend to move to a lower projector he -- lower trajectory. there is some evidence they are having success. services are going faster than the industrial sector. there is some transmission going on. it is going to be a bumpy road. it is never going to be a linear process to move to slower growth, but the high-frequency data is going to look arming from time to time. anna: what do you think of the chinese authorities efforts to limit the amount of stability they see in their markets. we see -- we have seen some headline grabbing -- the criticism is misplaced? james: there is a preference for stability in china from the local leaders. that extends to financial stability. while they welcome market principles, and i think that is clear for the last 30 years of reform. their moving toward markets now in terms of what you see in the fx market. when it comes to those market forces presenting a period of instability, then they're going to intervene. i don't think we should be surprised. that is something that is a feature of chinese economic policy management. i don't think it indicates they've lost control of the economy or anything like that. i think that is a mystery. they will intervene from time to time if they think it is necessary. anna: to questions spring to mind. one of the criticisms has been that a lot of the reform has been concentrated in the financial sector. not enough in the real economy. i would be curious to hear your take. i completely agree with your view that the slowdown was concentrated more in the secondary sector. in the sector that matters hugely to the rest of the world. how do you see the danger of what is looking more like a hard landing in the secondary sector? had you see that spilling over to the rest of asia? james: the rest of asia is good to suffer from slower growth in china. even if the growth rate stayed the chain, the rest of asia will not -- one of the reasons is the integrated manufacturing model where you're using input from the rest of asia -- and being exported to countries like u.s.. that model is changing. china is sourcing more of its products to mystically. -- products domestically. even products stayed in china, the rest of the region would benefit less. in terms of reform, you can be critical that it is not moving fast enough. it is always going to be slow. what has changed is they are making decisions faster. previously reform initiatives were tried out and pilot projects, particularly on fiscal policy. now things are happening quickly. there is some concern in terms of growth and moving reform more quickly ahead. it may be making a policy mistake as well. marcussen: there is hope that we will get massive stimulus. james: not like post crisis. we are not good to see that kind of stimulus. we think there is stimulus in the pipeline already. at lower levels of government. these initiatives to ease the debt burden. it will allow them to borrow more money in the second half of the year. already started to do that. we'll see some fiscal stimulus this year. we are not come to see a huge stimulus in china. sense that we have been concerned about chinese debt. how has only seen change that? james: unfortunately, it doesn't. the country is still leveraging up. that gdp ratio is still going up in china. guy: give us a sense of the magnitude. disco more than 200% -- james: more than 200% of the gdp. the chineset why authorities when i do a big stimulus? james: there is a big impetus and an increase in debt after 2008. the authorities are aware of that and the risk associated with that. they are intending to address this that issue. that is going to take time -- address this debt issue. that is going to take time. guy: how does it work structurally? you have a slowing economy and we're still gearing up. that tension has to break. james: we have not seen it yet. we have not really seen any significant episodes of problems in certain corporate's. systemic wide debt problems in china we have not seen. how they have dealt with this in the past is how they have with many problems is grow your way out of it. maybe that is no longer going to be working. it needs more wholesome solutions to the debt problem. it means slower growth, not faster. anna: you say they have a strong preference for stability. doesn't that applied to the gdp number -- does that apply to the gdp number? you're talking about a drop-off in growth. that doesn't sound like that should get global markets as agitated as it did last month. disco i think they have to recognize that slower growth -- james: i think they have to recognize that slower growth is on its way through. banktate council and world that china would be growing by 5% or less. this is a recognition that growth is on a downward trajectory in china. it is managing to move toward slower debt ratio. that is what they are trying to achieve. you viewala, how do all of this together? i don't want to spend my summer greece wondering about -- worry? ms. marcussen: at the global level, the fact that we have so much debt is one of the things that is holding back the speed of the recovery at the moment. if you think about all of our recoveries, we've always had leverage somewhere going in the economy. what worries me today is that one of those leverage vectors was in the emerging economy. that leverage vectors has lost its steam. we are hoping that we find a new one. i don't think there is one out there. i think that means globally we are in a slower growth environment. that doesn't have to be hugely negative. that is adjusting to a lower growth world. -- anna: the hikes fed still hikes rates with that? ms. marcussen: i am in and economists -- i am an economist, you can still be growing in that potential. you can still have constricts in the desk constraints in the labor market. -- constraints in the labor market. i think labor markets become's if the -- markets become spooked if the fed is not acting. it will show us that the u.s. has the confidence to do that. anna: thank you very much for your time over the last hour. james, thank you as well. james mccormack. guy: will take a break. when we come back, more china. we will see you in a moment. ♪ great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. anna: welcome back. here are the stories need to know. guy: china's experts fell in august. of 57.8 billion dollars. a heightened concern about slowdown in the world's second-largest economy. japan insurer --a amlin's director considers the offer fair and reasonable. guy: the world's biggest online betfair'spany -- shareholders will get 0.4 percent. .addy power get over to hong kong for the latest news in the stock market over there. shery ahn joins us. allave been digesting morning the trade numbers out of china. how is that playing into the asian market? things have improved over the last hour or so. china.all focus was on trade data. investors looking at how the trading is doing. exports and imports fell. chinese exports fell for a second consecutive month. looking at the new zealand dollar, australia spent more than 30% of its exports -- austria sent more than 30% of its exports to china. the aussie has declined for the past two months. this is a strong rise. the new zealand dollar is holding on to gains. rising almost .5% after declining for four consecutive months. i want to take you through the that's because that is because of that trade data to be hit on japanese stocks. they were surging in the early morning, but they plunged. they finished down 2.4%. they erased all of this year's gains. they are at the lowest level since february. chinese trade data is outweighing our report. i want to take you through the shanghai composite. we are seeing an interesting move where authorities areulations -- authorities intervening to prop up the market here it we are seeing -- market. we are seeing a surge in trading this afternoon. it was mostly negative territory all morning. in the afternoon trading, it surged up. this is happened since the stock rout begun in june. since yesterday, it did not happen. today, surging in late afternoon trading. back to you. guy: shery ahn, thank you very much indeed. that trade data came through this morning. bloomberg spoke to the european union. facing european is is is in china. >> the problem we have in too many different conflicting messages. where is this country heading. anna: with european businesses struggle with china. let's bring in simon kennedy. simon, good morning. setn olney has joined us on to have a conversation. the european strategist. what is a wall street saying about the china contagion? what is the warning? simon: it has been a few weeks since the stocks start to climb. all of the economists started putting up big reports, what does china mean for the rest of the world? they are saying thinks it should be ok. china will not have a hit on the developed economies. sinces some had feared the selloff first got underway. europe feels more nervous about this then the u.s. does. draghi is very worried about it. yellen less so. mark carney even less so. they see europe being harder hit. ak, without the euro rising. certainly, europe and the u.s. -- europe is the bigger loser. u.s., fewer financial links. china alone could take a big bite out of its growth. the main fear is that china infects the emerging markets. karen, he is talking about this from a macro perspective. are you investing around? people focus on the exports to china. three present of the eurozone total. , it islook at e.m. critical what happens in e.m.. a lot of the winners of the last six or seven years were getting the benefit of profit from china. autos, it's commodities. if you get this domestic revival. most gdp growth comes from a do must exports. if we can keep the confidence going, i love the thanks of domestic, they could still get going. profits were so impressed. guy: the notes that have been written, other famous names in terms of the economists that are writing these notes. the a line between them and what is happening in the fed. couldbelieved that fed pull the trigger now. the markets feel pretty comfortable. wall street has payments discounted the china story. -- wall street has pretty much discounted the china story. think things will down a bit. trading is still suggesting no rate increase in september. even toward the end of the year, goldman sachs still thinks is going to be december. morgan stanley too. some people that the fed will do anything to avoid. a catch 22.f the hike, everyone complains. they don't fight, everyone wonders -- if they don't hike, everyone wonders what does the fed see in the world economy? karen let's they would you. performancee of the in europe will cushion europe from what is going on outside? profits aree's traveling in the slowest lane in 50 years. slower than the 1970's, 1980's, 1990's and today. 50 years. even if we get a profit that looks like the 1970's or 1980's, we are still slower than what we were in 2003 to the -- to 2007. let's roll back the clock and forget that break in china exists. we still have some profit recovery to get a path that looks like that. anna: those are the only things we bring back. [laughter] much is built into european equities? we don't get it, what happens? karen: eight out of nine years we haven't got it. eight out of nine years is embarrassing. that's why people have given up on profits. they were downgraded 50%. that's because of commodities and oils. people are feeling very nervous. they should take up commodities and utilities. we're still holding on to double-digit profit growth this year here it guy: the areas in which profits are going to come are getting smaller and smaller. we seem to be running out of areas which sectors are going to drive europe higher. karen: a little bit of growth can go a long way. over 100% of profit growth is from the banks. you get banks on one end and commodities on oil on the other end desk commodities and oil on the other end. -- commodities and oil on the other end. it's climbing upwards slowly, slowly surely. think you're getting domestic, support services. there is growth in the construction. just improvements across the board. it could be a randstad. just getting domestic growth back. then 2010 andent 2011. most of the growth is coming domestically now. the big worry for europe is this brings down confidence. confidence is going to be very fragile. unique confidence to make this decision. if you have headlines that china crashes out, confidence may be a bit fragile. karen, thank you. she stays with us a little bit longer. guy: a look at how we have set up for the european open. if you take a look at the calculations, we look like we're -- .3%o get a moderately . higher for the european equity story for this morning. that was a before little disappointing. that is what we're looking at in terms of the numbers you need to be looking at. what's interesting, there was expectation that we would see a risk off kind of session. you may be saw a flight of safety toward the euro or yen. it is in an interesting position. japanese equities off. muddled story coming through in the way that we are trading this morning -- kind of a muddled story coming through in the way that we are trading this morning. anna: he presents his draft for 26 teen budget. his country tries to deal with the process of processing hundreds of thousands of refugees. we are live to berlin to break down the numbers. ♪ anna: welcome back. 7:45 in london. these are the stories you need to know. guy: export in august down by downoint just 6.1% to -- by 6.1%. this is the second monthly contraction in exports. highlights concerns about a slowdown in the world's second-largest economy. shrank 1.2% in three months from june. a smaller than expected decline in consumer spending. guy: samsung electronics are painted cut 10% of its workforce. according to the the economic , samsung has declined to comment. under pressure after a lukewarm reception of its galaxy phones. anna: looking at a few of the stocks that could be on the move today. we are going to be keeping a close eye on the insurance sector. premium offer from the japanese rival. 36% premium. the shares are going to rise 36% today. amlin is going to be spiking higher on the back of the fact -- where good to be seeing gains for lancashire holdings. of the others are independent. and potential targets could be either up. they could be snapped up amid this round of consolidation. already $81 billion of deals done in the insurance sector. -- more than double this time this year -- this time last year. is caught lower on the back of its numbers here it not as good as had been expected. 4.3% gain looks pretty good. the analyst wanted to see 5.2% gain. coffee also missing estimates. opening not going to be as many going forward. eye on -- more m&a in the air. paddy power and betfair. we knew on august 26 that they would be combining. creating the world's eggs gaming company -- the world's biggest gaming company. paddy power will be owning 52% of the company. it will be called paddy power betfair. the shareholders of --fair will be getting 40% getting 48%. he will be taking over the helm of the combined company having also work at paddy power recently. -- he will present his draft federal budget as germany tries to deal with the cost of processing 8000 best 800,000 refugees. -- 800,000 refugees. let's start off with the data. it tells us that the german export machine benefited from that weak euro. you saw exports up 2.4%. germany imports a lot of energy. both imports and exports numbers, it exceeded analysts' expectations. 25 billion euros. that is the figure overall or the year. we do see a resilient german economy even in the face of uncertainty. july was a that month for the eurozone. -- july was a bad month for the eurozone. before a lot of the negativity happened in china. a lot of the data coming in from china that caused a stall in the stock market. to the u.s.,ting perhaps where the figures look strong. another quick note, labor costs are rising. , so you're seeing upward pressure on labor. a quick note on the budget, mr. charlotte will do that in the next hour. i will be interested in saying inin saying what he says regard to supplement the figures for refugees. they still haven't said what they are going to do for 2015. we know there are about 5 billion that they think they have left if they are to reach their budget. that is what i will be looking for when mr. schaeuble speaks. we are going to be trying to figure out who germany is going to be exported to. they had a banner month in july. guy: that is an area that is starting to show signs of life. how important is it that the budget is balanced deck of how sensitive is the issue of migration? is that something in the way that nothing else has? hans: the balance budget is the holy grail in both parties. they've talked about this. in some ways, the line from merkel's government is achieving deficit,udgets -- zero gives them credibility to deal with all of the other crises. whatever else is happening in the eurozone. this is what merkel internally feels like she has to achieve in order to have that external credibility. frankly, some arithmetic. a have a bit of a cushion. of a cushion, bit so when there is a refugee crisis, they can thrive. guy: hans nichols there. our correspondent in berlin. karen, you said that many investors have given up on profits. do you go looking for the waste to value stocks? you look at other metrics which perhaps make those equities look cheaper? karen: you have to believe there will be relief. where we are today is in a very unusual place. are back at the january starting date. if you look at the value rally and the cyclical rally, pretty much everything has gone back to january starting point. if you think we hold up, we don't roll over, and that depends on the u.s. holding up, it looks good for the market. guy: how much will the fed tightening up settle all of this? there's been so much discussion surrounding it, i cannot imagine it would surprise anyone. we have been talking about it forever. i can give you relief. i think they know we want to normalize a little bit. anna: karen, thank you for joining us. guy: shanghai is up strongly after 3%. ubs futures are pointing -- about .7%. on the dax, .1%. jon ferro, what are you looking for? jonathan: i am looking for reality. trade data out of china, i'm not sure there's anything surprising in the headline numbers. if you look at the volume of the commodity imports, oil, a nine-month low. we will break down the headline numbers out of china. the other thing i want to look at is corporate japan look -- corporate japan opening up its wallet. that -- i will ask that at 6:15 -- at 8:15. a bit of a fiscal stimulus would go down quite well. from a monetary policy standpoint as well, a bigger deficit. i'm sure mario draghi would welcome that. back to you. anna: john, thank you very much. a willingness to go abroad to buy assets. we will see how amlin moves. guy: it is performance away. ♪ jon: good morning and welcome to "on the move." i am jonathan edwards. -- jonathan ferro. but gets trickier morning brief. 14.3%, imports plunged experts by 6.1% in august. another sign that growth in the economy is slowing. today,drops over 2% erasing all the gains for 2015 and corporate japan opens its wallet. the japanese insurer is to require amlin for $.30 per share. expect socks -- stocks to pop in the open. dax futures up 70 points. let's get the market open. caroline: what a turnaround. the first words to exit my lips as morning were, search for safety. now you see the shanghai composite rally toward the end and you see the slightly calmer feeling. equities are popping higher today in europe. cac up 0.7%. day on a higher note, despite the day that you were just reading out. the import slump, with the exports down by 6% as well. that is sending a shiver around the world of where global growth is coming from. reducing a little bit -- we do see a little bit more of a calling. -- calm in. --