cuttingabia will be contractor prices, delaying payments. we know that supply is at record highs. oil up by half a percentage point. let's get on to the stock move. deutsche bank's move. shire down 2%. having to resubmit what was meant to a set -- what was meant to be a sellout drug for them. they meet with the fda, pending a positive trial data. danone beating analysts estimates. deutsche bank may like the reshuffle. scale back on investment banking and become a more profitable institution. heads are going to roll. back to you. jonathan: we'll talk about that later. let's see how that china gdp figure is playing out in asian markets. david english is standing by. good morning, david. david: equity markets here are neither here or there. it is not too hot or cold. today, slowest paced since 2009. -- slowest case since 2009. since 2009.ace very mixed. most are down here it -- are down. china is closing up shop right now. we quickly raised early gains and now we are down .5%. that is the shanghai composite. we'veday, very quickly, got when the gdp numbers came out. 3386 is the level. a mixed day. a very subdued reaction. volumes are quite thin. we thought it was going to be big driver. not really. back to you. thankan: david ingles, you very much. not much in asia. here is what is happening. still on target, we break down the latest in china. crude reality. saudi arabia has reported they have not paid contractors for six months. deutsche bank reshuffles. we take you through the banks biggest shakeup. ♪ jonathan: call it a bittersweet gdp reading. it came in at 6.9%. that is slightly above analyst s'forecasts. let's get out to the water him's. -- let's get out to nick wadhams. ,ick: what you're seeing here the economy is doing better than expected. or perhaps not as badly as people suspect. ofare in the new normal slowing growth. this is something they have telegraphed for several months. they would anticipate slower growth. the other issue is is the number really this good? there is debate over the reality -- over the reliability of this number. numbers own gdp tracker puts growth at 6.55%. you're seeing market uncertainty. people are not sure what to make of these numbers. a positive sign, but can we trust the data. that is the message we are hearing. jonathan: that is what a lot of people are talking about here in london. a look at this data and they see a two speed economy. how do you reconcile those two things and a quarter? it gets to a couple of issues. one is the stock market rout. thee was a lot of suspicion rout would not affect regular people's pocketbooks. so few chinese people actually have money invested in the market. there was a distortion with that. the other, you're seeing evidence there is a demand for services. managing that is transition. shedding some of the old drivers. the economy, industrial output. those drivers are being replaced by services, demand for tourism and health care. indicate they are managing that. when you look at this data and you see some things are down. industrial reduction, fixed asset investment down. if you wonder how can gdp come in above estimates? it gets to that -- it gets to the issue of whether this data is sound or not. jonathan: nick wadhams in beijing. thank you for breaking that down . let's get this conversation going. we're joined by hao hong. where do i start? i look at this figure and it used to be something that people would talk about quietly in the corner. the gdp figure did not mean anything. the data is suspect. people doing that openly. maybe they choose 6.9%. not too hot, not too cold. it is -- is it an accurate reflection? hao: i think we need to look behind the numbers. already, we have seen coal, power generation coming down. that is confirmation that the manufacturing sector continues to slow. once you look beyond the slowdown in manufacturing data, factories see the pickup, also a reasonable pickup in the real estate sector itself. buying is picking up. construction has been up. slowdown inpast the manufacturing data and look into the fourth quarter, we could see a slightly continued -- slightly above consensus expectation. junk of slowdown on the manufacturing side isn't anything new. of the service sector p dow want discuss that. you have a stock market rout, the financial system that came under pressure. the service sector continues to perform what is the story? hao: at the moment, the service industry is taking over 50% of the chinese gdp. also, back then, each percentage 120dp growth takes up million people employed. to 180has gone up million. easily desk it would solve the unemployment pressure in the chinese economy. -- it would solve the unemployment pressure in chinese economy did -- economy. jonathan: i want to talk to you about -- before when it was manufacturing people would use freight, electricity consumption. is the service sector -- as if the service sector takes over, do we need to check -- do we need to change the proxies that we use? hao: i think lack -- i think we , newthe freight shipment lending growth. in growth is a powerful indicator of how the chinese growth is going to be. the other two indicators are less relevant because service sector has been taking over above 50% of the chinese gdp. going forward, we need to service sector is going. how the unappointed situation is going. demand.labor supply and them give you a strong indication of how the employment situation is going. all those keep in mind. stronger than expected that in the past month. i would not be surprised to see economic growth strengthen. jonathan: hao hong, great to have you with us this morning. joining us live from hong kong. next up, crude reality hits saudi arabia as the nation is said to be laying payment to contractors. -- said to be the laying payment to contractors. ♪ jonathan: here are bloomberg's top stories. china's economy expanded in the fourth quarter. gdp rose six when i percent, propped up right a strong services sector. it remains the slowest expansion since 2009. the u.k. is rolling out the red carpet for zhejiang ping as he for xiis first -- jinping. that theyficials say will announce something of big value. deutsche bank will replace several senior management's -- several senior managers. the biggest management sake up and more than a decade -- shakeup and more than a decade. the crude reality. it is settling in for saudi arabia. according to people, companies working on infrastructure projects have been waiting six months for payment from the government. let's speak to matthew martin in the by. great to have you with us. what measures are being taken to the saudi government in response to the oil slot. isn't that bad? matthew: what we are seeing is the government is starting to enact a series of measures as the reality of the oil price and the fact it is going to hover around this level settles in. the government is coming in -- is coming from a position of strength. ares aware that things going to be worn down as he carries on the pace of spending. we are starting to see the government move into catch reservation mode. we are seeing payments to contractors being delayed, six months or longer. we are seeing a freeze on new projects in the current budget year. we are seeing the government go back on some of the contracts and try to renegotiate prices. behold dream of measures that are currently being taken by the government to limit spending. jonathan: in terms of the outlook, what is the picture look like? matthew: this is the big question. are very much focused on the last few months of this year. the big question is what happens next year? it looks like the oil price is going to stay around the same level. revenuess government are around 50% lower than they were 18 months ago. we're going to have to start seeing some very targeted measures. we've already reported that the government is looking at next year's budget and capital expenditure. they are trying to put a cuff there of 8%. there is a program going on in saudi arabia as they are building metros, stadiums, infrastructure. hospitals and schools. there is a huge spending program that is there. the government is looking at measures to reduce spending. are areas to cut. cutting from social spending and government salary and bonuses and spending on the war in yemen is taking up a huge portion of the budget. --t area that seems to be next year we're thinking it could be a challenging one for spending. huge effects throughout the economy of saudi arabia. a lot of these private sector relies on government spending. jonathan: brilliant reporting. thank you for joining us. let's keep the come position going desk let's keep the conversation going. almost three billion pounds in assets. out ofde, a strategy saudi arabia. how much pain of a coming under? how much longer can they keep this strategy in play? >> when the oil price began to economistsmber of were forecasting that they were oil prices at $50. whether that is a precise speculation is up for debate. there is some leeway and how long they can keep it. the pain is being felt and they will extend the terms. as a big consumer of oil services, they can -- they can afford to do that. jonathan: norway tapping its wealth fund. the $50the waves that crude creates. julian: it will be with the oil service industry. they are the people who are in the front line. the companies are having tough discussions about cutting contracts. we have seen this in the stock prices. that is the first wave through. outral consumption coming to some of these oil states as well. how they are spending their money. jonathan: the city of london stands in this position. we know that it is great for the are 100, giving the players desk giving some of the investors are -- given some of the investors are big oil players. julian: it is a net positive for the consumer. it puts more in their pocket. the domestic economy in the u.k. is good news. if you're someone involved in the service sector, the cutback in the oil price is good. jonathan: shakeup at deutsche bank. ♪ jonathan: good morning and welcome back. the ftse 100, where are we? up .4%. .75%.x up that's a bank undertaking a major management shakeup. -- deutsche bank undertaking a major management shakeup. caroline: some bread -- some big exits. some at deutsche bank for 20 years or so. he has to do something dramatic. investment banking being hit by record low interest rates. the wonder after a 5.8 billion euro write-down, they are making dramatic changes. getting rid of some of the -- nikolayt helmed -- asset management being one side of things. krause is going to be exiting the business. rolling, jonathan. jonathan: here are the ends. -- here are the ins. women getting to the board. .orporate financing jeff irwin is going to be heading that particular element. he is already cohead with: fan. he takes over the corporate finance element. the other area of focus, institutional clients. the man who helped grow the equities business is focusing on that area, garth ritchie. print is going to be coming in from black rock. he's going to become the head of asset management. they are setting up a digital bank as well. really interesting move coming from john cryan. phenomenal problems for the -- on jewnd you chain nshu jain. there are 8000 jobs going across the bank. this is dramatic moves from john cryan as he tries to make it more in festival. a better return on equities. bloomberg.tay with our banking coverage continues with an interview with jpmorgan ceo, jamie dimon. do not miss that. we are back with julian chilling's worth. -- julian chillingworth. you have limited exposure to the sector. is it more pain to come for the banks? julian: the regulators are not going to ease up on things. the rationalization we have seen this morning in deutsche, i'm sure there is more to come there. say thatit is fair to life is owing to become very tough for these guys. jonathan: in the race market, we call it low for longer. why is that? julian: the returns on investments that we saw them get over the pre-credit crunch. iod is notcrunch per coming back. could range on for another 10 years. jonathan: julian is go to stay with us. we'll hear from a your president. his concern of a british exit from the eu. ♪ >> china isn't quite as important as those numbers would lead you to believe. the effect may be overstated. the point is the u.s. economy continues to do well, and the u.s. continues to pick up, then things in the global economy are probably not quite as bad. policy. is some if you look at the first half of this year, one major concern is a lot of traditional growth measures have not been effective. data, look at today's investment still remains weak. ,f you want to stabilize growth stabilize investment is still the key. >> we predicted going forward up to 2025, china will double the level of its built assets. up to 100 chilean u.s. dollars. -- up to 100 trillion u.s. dollars. jonathan: that is the big news. the headline. 6.9%dp reading coming at in china. the slowest expansion since 2009. this week. things are ok. .5%.tse 100 up by deutsche bank, the big move, let's get straight to it. caroline: big moves coming in. i'm going with the leader of the pack. we're talking purity cents over and laboratory. phenomenal growth. , up 7%.ading the charge the reason, we are going to hit our 2017 revenue goal a year early. we're going to get to two on a half minute -- were going to get to $2.5 billion. this is a company that is scaling rapidly. meanwhile, metro doing very well. second-best performance in the stoxx 600. its results result of being liked by analysts and investors. sounding upbeat and optimistic. estimatess have met after selling off a little bit before. on the downside, owen the. playing into the saudi arabia news. the glut having significant issues. saudi arabia when it comes to contact us. omv having to write off significant assets to the business. why? prices are continuing to fall. oil prices beginning to be at $55 a barrel. you'll see an improvement. 2018.e a dollars by yet to really assess and reassess what the value of their businesses. back to you. jonathan: caroline hyde, thank you very much. let's talk politics. we can bring you an exclusive interview. started bycqua asking about the risk of the u.k. exit from the european union. >> done business across 35 countries in europe, i would have to say it is important that britain stays in the eu. however, we are committed to doing business in the u.k.. this is a great market for us. one of our biggest markets. to be a place that we are going to be -- where a lot of the future of coffee gets made. if you walk anywhere around london, it is the most competitive coffee market in the world. we think that is a good thing. being the center of your competition is really important to being debated. if this country decides to leave, how would you view that? would you change headquarters? do you start thinking about it now? >> i don't think it impacts us at starbucks. i think it is a multinational company. we think it is important that britain stays in the eu. jonathan: someone else with a view of a potential eu exit -- u.k. exit. he told us what he expects in the pyramid leading up to the referendum. >> it feels like there's going of uncertainty. if i take two steps and look at earlier this year, the feeling amongst businesses is there's going to be a big period of uncertainty. to what theas outcome will be. you put that in perspective, it eriod ofke a p stability. we're hearing that from our investors and the broader u.k. if you put it in that perspective, it feels like the u.k. is in a pretty good position. there is to be some uncertainty. --my preference would be find >> what does that mean? >> that means getting opera concessions and being particular about what they are here it -- it means getting proper concessions and being particular about what they are. jonathan: julian, how do you prepare for an event like this? contingency planning. as an asset manager the start stress testing your portfolio? it is going to be quite a long lead time into this boat. cameron if he can will try to go early. we have been talking about this as to how what folios might need to change. also how we should communicate with our clients. it is going to be a very big issue. david cameron is going to come back with concessions from europe or jonathan: until then, we do not have a campaign. there are no issues to campaign on. as you look at cities in the market, not would get a lot of people saying that this is exclusively in fx story. do you buy into that? having chatted through with you earlier, i think it is -- sign jonathan: where is it? where is the equity plan? julian: they will print cash. all in all, i don't know if they are a net winner. there are going to be some percent -- with particular niche is. at the end of the day, it is a bond story. it is a currency story. jonathan: i remember the referendum. a political generation in markets. you had the election. there was not much of a response. afterwards we got the result. the referendum a little bit different. we woke up that day with that poll that said the exit had the lead. is that a trigger point? julian: i think we have to be careful about polls. whatever the polls say, the market will be very simple. yes, i think the markets will be -- you should have been with the scottish folks. perhaps, they had the weight of money. chillingworth,n rathbone. thank you for joining us this morning. pmk aboute talked to the new reality of lower oil prices in their u.s. business. that is next. ♪ jonathan: good morning and welcome back to bloomberg tv. that you up to speed to where stocks are trading. ftse 100 up. we are higher up by .7%. the dax in frankfurt, also higher up by 85 points. let's find deutsche bank stock which is being fueled. investors like it. there stocks up. switch up the boards. we check out -- we will check out the fx market. the euro flat on the day. dollar on thesie gdp over in china. the aussie up .3%. there are the market moves. these are the top stories. china's economy expanded more than forecast in the third quarter. gdp rose 6.9%. popped up by a strong services sector -- propped up by a strong services sector. it remains the slowest quarterly expansion since 2009. angela merkel says there has the progress on tackling refugee crisis. interview, hee says the eu needs to get turkey back to the membership -- back to membership with the eu. weeks,he coming days and i am an agreement how to try to solve the crisis. how to mediate the problems in turkey and europe. also building the eu turkey relationship. jonathan: saudi arabia is said to be delaying payment to government contractors. companies have been waiting six months or more for payment. oil prices have pushed the company into a deficit for the first time 2009. saudi arabia isn't the only one feeling the bite of $50 oil. tmk is one of the world's biggest pipe managers. the company slumped over the last year. have vladimir's lack of its two that -- here with me. great to have you with us. $50 oil in isolation, it doesn't hurt. a slowdown in shale. how is the situation developing their? vladimir: it is quite challenging. courts.raight on at the moment, it pays off to be a global company, because when shale started, u.s. was like a locomotive. now russia is the locomotive. russia is much more resilient. in russia.fferent the first thing that suffers is the budget. tax system is flexible. , their oil companies vrable costs go down. costs go down. we sell pipes. jonathan: selling pipes is an interesting business. exporting is a difficult thing to do. you build up a physical residence in the country where you -- a physical residence in -- wherery or you are do you stand? vladimir: under the circumstance, restructuring into crisis. that should be in a couple of years. jonathan: it appears to have bottomed out. it is that the -- is that the key gauge? vladimir: what is more important is inventory on the ground. we will see a slow recovery. jonathan: it is interesting what is happening in terms of growth. the u.s. is the place to be for growth over the last five years. where do you go for growth? [indiscernible] -- decrease in shipment rules is 70% up -- rubles is a 70% up. high-tech.ore we control about 70% of 70% -- gross is substantial even in u.s. dollars. russia is really seen as having pull this off. jonathan: at the end of the day for the bottom line, it is good news. revenue comes back into russia. you are thinking about doing something on the debt over the issue. do you still and to get things that 50-50? ruble denominated debt? vladimir: yes. because ofdecrease the financial situation in russia and certain risks. substitute some euro for rubles. jonathan: some of these international markets -- what about the rate dynamics? vitamin: rates are going up everywhere. guess the you have to depreciation. we're not playing gambles. we are trying to hedge. to make sure our cash flow matches our liabilities. the rates were up for the first half of the year. now they are down. cheaper. a little bit jonathan: in terms of structuring, you are exposed. when you look at the news reports, the likes of saudi's are delaying payments for some contractors, if the saudi's are feeling the pain, surely the u.s. shale reduces are feeling the pain as well. vladimir: we do not have this issue. -- we see muchet better financial terms from gas. in india, the same thing. it is important to go through .his crisis that is key. feel any specific pressure. it is important because of 20% of global hydro carbon are produced through our pipes. jonathan: a fantastic business to be in when things are good. you look at things happening in the united states, at the turn of the year is that when you start to reconsider what you do with the u.s. unit? latimer: [indiscernible] -- vladimir: [indiscernible] the contractors get used to the situation, they will survive. market strengthens a little bit. it is still a great place to be. jonathan: vladimir, vice president of strategy and business development at tmk. next, we give you a preview of what to watch this week. thought right here in the u k. ♪ jonathan: welcome back to bloomberg tv. here is a look ahead to what we will be watching. the ecb announces the latest decision on thursday. canada goes to the polls today for what could be the closest election in the country's history. >> the host delaying on hospitality. china's leader will dine with the queen of buckingham alice. address the houses of parliament and take a ride in the carriage. the five-star treatment is aimed china's leadin trade partner. that 100 billion euros by 2025. at the top of the list is a investment in a nuclear power plant. britain is also offering up contracts. a one point billion pound that she won't .2 billion pound london could become the first overseas financial center to open a market for china's sovereign debt. little wonder that both sides are hailing this is a golden era in ties. it.than: that is almost manus cranny coming up. with francine lacqua for the polls. mr. xite visits from jinping. headline today said nowhere near as bad as expected. we look at a whole variety of metrics. where the economy is in china and the question is are we going to see hard landing? as dramatic a slowdown as people thought? on the rebalancing away from fixed investment in for structure spending? not a bad set of numbers. it's a bank getting out there early, getting one off the block ahead of credit suites. john cryan is the sentiment of what this bank will be. jonathan: you had a busy week. you looking at the chinese gdp. if you're wanting white manus might be -- wondering white manus might be downbeat, take a look. [indiscernible] [laughter] >> he is going to take argentina into the semifinals. manus: he enjoyed that, right? [laughter] thishan: i went around to desk to manus cranny's house to watch this demolition in rugby. medical do we have to -- manus: do we have to replay that over and over again? the argentinians played a blinding game. jonathan: manus cranny with francine lacqua. it is francine's job to try and cheer up manus cranny. if you want to talk to me, i am on twitter. interviews from the capital later today. bloomberg will be speaking to john williams this evening at 7:00 p.m. u.k. time. that is it for me. equity markets .2% higher. the dax up here at best of luck for the rest of your day. ♪ saidine: saudi arabia is to be delaying payments to government contractors as the oil price bites into the budget. manus: china's third-quarter gdp beats estimates, but grows at the slowest rate since 2009. francine: change at the top. deutsche bank's new ceo as he implements the biggest management shakeup in more than a decade. welcome to "the pulse," live from london. manus: saudi