Deep Dive
Shownotes Transcript
Hello and welcome to World Business Report on the BBC World Service. Will Bain with you today. Thanks for joining us as we kick off another week here on the programme. Coming up today, top trade officials from China and the United States are in London for talks once again on trying to end their trade war. We'll have the very latest in just a moment. Also today, another pledge to clean up global shipping at the UN's Oceans Conference in Nice. But what will make this talk more of a reality this time?
The technology is being developed. It needs to be scaled up. There is a cost implication, but of course it's also that this is a transition and we have to look into any negative impact our measures may have on the economy as a whole. Yeah, we'll have more from the head of the UN's International Maritime Organisation a little bit later on in the programme and more too on record-breaking revenues for the UK's top women's football league and what it tells us about the health potentially off the field for the global women's game. So plenty for us to get through here online.
on World Business Report. We're going to start, though, slightly surprisingly, given the two sides involved here in London, where top trade officials from the US and China have arrived to talk trade truces, perhaps, or certainly to discuss how to take some of the heat out of their current trade spat. Our global business reporter, Jonathan Josephs, has been an interested spectator as the two sides have arrived today and is in the studio. Jonathan, great to have you on the programme. Why London, first of all?
Well, that is a great question. These, as you say, the US and China, the world's two biggest economies, they are trying to solve some of the trade differences that really are a big threat to global economic growth. In terms of who's here and what's happening, we know that about two and a half hours ago, these talks began at Lancaster House, which is a UK government building about a stone's throw from Buckingham Palace, right in the heart of central London.
And we know that this happened after a phone call between President Trump and President Xi last week, which they decided that they needed to get their top people together to try and solve some of these differences that weren't quite put to bed at the previous round of talks last month in Geneva. For the Chinese side, we've got the vice premier, Li Hufang, who is President Xi's point man on the trade relationship with America.
For America, you've got three of them. You've got Howard Lutton, the Commerce Secretary. You've got Scott Besant, the Treasury Secretary, and Jameson Greer, the US Trade Representative. Now, why they are in London, sources have told me that there was an offer put to both sides here to have these talks in London. It's not quite clear exactly why, but it wouldn't be a wild suggestion to say that, to point out that
The UK is trying to get its own trade deal finalised with the United States at the moment. They agreed something a few weeks ago, but it hasn't been implemented and there are a few hurdles there. So at the same time, Keir Starmer, the British prime minister, is trying to keep China as something of an ally. He doesn't want to alienate them. So perhaps if he can bring the two sides together to negotiate these deals,
difficulties that are causing a lot of strain to the global economy perhaps it can be something for a win with him and help him with both sides yeah well they brought their top people top location they brought the weather with them as well because the rain stayed away thus far um that's probably about the end of the good news isn't it because some pretty sticky areas to get through where do you think are going to be the key areas of tension yeah absolutely well what we know is that in Geneva last month they both sides agreed to significantly reduce the tariffs the export
taxes that they charge on the goods that are traded between the two countries. So that has been put on pause for 90 days, effectively, whilst they try to work through some of the other issues. And these are longstanding gripes. In Washington, you'll find both Democrats and Republicans, both sides of the political divide, are unhappy with American companies and the limited market access they have in China.
Export controls are a big problem for both sides here as well. So we know over the weekend, China eased some of the export controls it has in place on rare earth metals. And these are 17 crucial metals for the global economy. You find them in everything from electric vehicles to smartphones to computer chips and computer monitors.
All of these things need rare earths. And America, the National Economic Council director, Kevin Hassett, said to American television yesterday that they wanted more access, that they don't feel that the restrictions have been lifted in the way that was agreed in Geneva. On the other hand, we have with China. We know that they want more access to high-end U.S. computer chips and other technology. And so that is something they will be pushing for.
And in terms of why we can think that that is something that might well be discussed here in London, we know that Howard Lutnick, the US Commerce Secretary, his department is the one responsible for US export controls. So the fact that he is here, he wasn't in Geneva, but he is here in London, that suggests that that might be an area of some movement. Really interesting. More on those minerals in a minute as well. But Jane Sydenham also with us. Jane, Investment Director at Rathbones Investment Management. Jane, great to have you back on the programme.
Good to be here. And the markets reacted to this meeting already, hasn't it, a little bit? Yes, a little bit. I mean, you know, the US markets are up a little bit this afternoon, but the reaction's fairly muted. I mean, China was – certainly there was a rally in Hong Kong and China this morning as well. So I think there's a little bit of positivity. I think everyone recognises there's a lot for both sides to lose here.
And to gain, but equally, you know, the path of these things hasn't been straightforward and markets are a bit wary of the ups and downs that we've had over the Trump tariff negotiations in the last few months. So I think we're not going to overcome it too quickly. Well, let's turn to one of those bumpy areas that both you and Jonathan have pointed out, Jane, and that is around inflation.
Metals, minerals, those things key going into just about everything that drives the global economy at the moment, isn't it? Rohitish Dhawan is with us, Rohitish, the President and Chief Executive of the International Council on Mining and Metals, industry body made up of 24 of some of the world's biggest mining companies. Rohitish, great to have you on World Business Report. Thanks for being with us. Thanks for having me. How important then for the wider industry this meeting, the fact that there's even talks, even if we need to be a little cautious about them, as Jane is mentioning?
It's crucial because the relationship between US and China will determine where the mining industry goes and therefore where the renewable energy industry goes or electric vehicles. As we heard, these metals go into absolutely everything. And what the market and the industry is seeking is certainty.
will the future relationship look like so that people can make investments? Mining is a very long-term industry. It takes somewhere in the region of 15 years to open a new mine. So it's very hard to plan in the context of a geopolitical relationship between the two most important powers. That could mean very different outcomes for the industry depending on where we land. When you talk about being difficult to
plan. I mean, are people making plans already? Are people looking for alternative sources, alternative supply chains of this stuff already? Are we seeing a reordering?
We're certainly seeing a lot more investment into the mining industry, and that's because the last 12 months have brought into sharp relief how vulnerable the West is to the control of China on these critical commodities. China produces 70% of railroads and processes over 90% of railroads. And the same is true in other commodities like copper, without which the West can't develop, industrialize, decarbonize, or rearm, which are all priorities for countries on both sides of the Atlantic.
And so what we're seeing is a huge focus now from governments, from investors, from the users of these metals like car companies wanting to look into their supply chains and say, where are we going to get these metals from? And how can we support the industry to invest more to bring these commodities out and to supply them? And of course, to do it responsibly to make sure that we don't end up harming people or the planet as we do so. It's worth drawing out again.
I don't think it can ever be stressed enough, can it, Rotes? What are we talking about in particular here? What elements are they going to be arguing over at the table in Lancaster House that Jonathan was telling us about? It's certainly the 17 elements that Jonathan mentioned, which are the rare earth categories. And these are used in all the applications from electric vehicles to mobile phones to wind turbines. But they are a smaller set of a bigger list of what are called critical minerals. Now, what each country defines as critical varies.
In some cases, that might be copper, which is abundant in the sense of the supplies in the region of 20 or 21 million tons a year, much more than the rare earth elements. But it's still critical because once again, processing capacity for copper is concentrated also in China.
And the challenge, of course, is not just whether we have enough of this available, it's who controls the supply of them. And just in the last week, we've seen the potential consequences with car plants shutting down, with defense firms being worried about whether they can have access to these metals and minerals. That's causing this concern that today it's rare earths, tomorrow it could be copper, and the day after that it could be nickel. And so we have significant vulnerabilities across
across our supply chains because of this dependence on one source of supply. And then that seems to raise the obvious question, doesn't it? That beyond this, presumably, do all countries listening, and if our listeners are listening in countries, not the US or China right now, is it now time for countries all around the world to look again, I suppose, and not just their supply of these things, but who is doing the refining of them as well and where?
Absolutely. The best time to have done this was 20 years ago because we find ourselves in the situation today because of essentially two decades of not having the foresight to understand where these commodities come from. But the next best time is now. And that's certainly a risk for people around the world, but it's also an opportunity because rare earths
The name is a bit of a misnomer. You see, these are not rare. In fact, they are abundant in the Earth's crust. It's simply that they're not typically found in concentrations that make them economically viable to exploit. But with a level of state support and with the entire ecosystem coming together, there's no reason why we couldn't be producing these rare earths and processing them all around the world. And the same is true for other commodities, too, like copper and nickel.
And so now is the moment for people to come together and say, if we're going to industrialize our economies and decarbonize at the same time of the next two to three decades, then having more of this being produced at home and closer to where we need them and outside the control of a single major producer is,
has arguably got to be one of the top strategic priorities for any country. Yeah, such a fascinating area. If you want to listen back to a bit more detail about all of that, we ran a great series on our Business Daily podcast that Jonathan was involved with, as was today's producer, Lexi, as well. Just search for the Business Daily podcast where you get yours from a couple of weeks ago. Five episodes on exactly all of that. Rohitish, great to have you back on the programme, Glenn. Thanks, as always, for your insight. Rohitish Dhawan there, President and Chief Executive of
of the International Council on Mining and Metal. So we've heard about some of the key characters involved, certainly from the American side, as Jonathan was running us through. But what about He Li Feng, a Chinese political veteran, but not, crucially, a veteran of the first trade spat with the Trump administration? For a bit more on him, we spoke to Lingling Wei, chief China correspondent for The Wall Street Journal, who told us a little bit more about the lead negotiator.
He hasn't had much of an international experience. He's relatively lesser known than a lot of his predecessors. And he doesn't speak English. He is someone Xi Jinping deeply trusts.
Both of them worked together as officials in the 1980s in the southeastern city of Xiamen. So that experience really shaped their aligned views on state control, on economic policy.
Up until most recent years, He Lifeng mostly had worked as a planner or project manager for various cities, signing off on big infrastructure projects, you know, getting government funding to build those projects. So he's really, you know, in a way has symbolized how China's state planning, how China's state-led economic model worked.
You know, it's quite a contrast to the previous Chinese negotiator facing off first Trump administration, Liu He. Back then, Liu He was very well known in U.S. economic and business circles. He spoke perfect English. He was trained in Harvard. He really understood U.S. concerns. And fast forward to today, He Lifeng is someone who has established
sort of like an opposite style from that era. How much is that about personalities alone? How much is that about a policy shift, full stop, that it isn't about...
Chinese companies trying to, for example, list on the New York Stock Exchange or whatever, that that sort of expansion of companies like that isn't the aim now. It's different. It's sort of building new bridges, building new markets, finding a way for China to continue to grow rapidly and change the economy, but not being as reliant on U.S. cash, I suppose, through stock markets for that.
Absolutely. It's different now. This time around, the goal for the Chinese leadership is really to try to win this new Cold War. China no longer sees the U.S. as a reliable trading economic partner and the same with the United States.
And the Chinese are continuing preparing for decoupling the kind of tech restrictions, what they see as containment effort from the United States. And, you know, the U.S. is the same. They're beefing up efforts to try to prevent technology and other products to flow into China that could help China.
Beijing's ambitions to build up their industrial and other capabilities. So this time around, both sides have realized it's basically a different kind of ballgame. For the Chinese, they want someone who is tougher, who can get something out of the United States and not just
trying to cater to a list of demands from the US because they really realise there's no turning back to the stable and even good relationships in the past. There's a tightrope still to be walked here, isn't there? Because of the economic situation at home this time is also different to round one.
Absolutely. Playing hardball doesn't mean that there are no constraints on Xi Jinping, on He Lifeng. That is why Xi Jinping is coming back to the negotiating table with the United States in London. China's economy is under pressure and China still needs to preserve some kind of stability, some kind of access to make sure that their economy doesn't fall into a beast.
That was the Wall Street Journal's Ling Ling Wei speaking to us then. You're listening to Wild Business Report on the BBC World Service. Jane Sydenham still with us, Investment Director at Rathbones Investment Management and elsewhere on the market today, Jane. Interesting, well, Warner Brothers and Discovery came together a few years ago. Now sounds like they're going to spin out some of their streaming networks.
Yes. I mean, you know, this kind of reflects this change in the way that we're all consuming media and particularly this pull towards streaming and the sort of rise of all these incredibly powerful companies, including Netflix and so on. And Warner has discovered it's got to split out its traditional sort of television business from the streaming business in order that it can attract customers.
capital and investment to each entity but particularly the streaming business so the shares are up quite strongly this afternoon. Really interesting and interesting the sort of the coming together and then the splitting back out again of all of this and it seems to be going on continually we'll probably talk about that a little later too when it comes to sports as well. Before that though we're going to talk shipping because every day tens of thousands of massive ships carrying containers crisscross the world's oceans and industry that moves at more than
80% of global trade generates more than $900 billion a year too. But that movement, of course, comes at a cost to the environment. The international shipping industry is responsible for 3% of all global greenhouse gas emissions. This is something being discussed at the UN Ocean Conference this week in the southern French city of Nice, from where President Emmanuel Macron, the president of France, told delegates there that the oceans are not for sale.
It's madness to begin predatory economic activities which destroy seabeds, which destroy biodiversity, which free carbon locked under the oceans. We know so little about seabeds. It is idiocy to start to exploit them before we have explored them. Yeah, overfishing and pollution also up for discussion at the meeting, but plans to restrict trawling in some protective waters were criticised by some environmental groups.
as not going far enough. Claire Nuvat is the founder of the marine conservation group Bloom. She's not happy with the progress so far. They released maps to the public intended for journalists. I think they were counting on us not working through the night, but we did.
We looked at those maps and guess what? The 4% zones they said they will designate by the end of 2026 as truly protected marine areas where bottom trawling will be banned are zones where bottom trawling is already banned.
So we're looking at a level of environmental scam that really exceeds anything we've seen until now. Well, Arsenio Dominguez is the Secretary General of the International Maritime Organization, part of the United Nations. He's in Nice for the conference. And we asked him why the work to decarbonize shipping in particular seemed to be taking so long.
It's not taking that long. We have to recognise that... 2050, that's far beyond where, you know, oil and gas companies have got targets that come in before that.
The reality is that we're actually relying on the oil and gas industry to provide at the scale of required for us for the shipping sector, the volumes, the net zero fuels that we require. So we are actually relying on them. We're taking into account the time that it will take for them to provide, supply those fuels at the level that are required. And is it still a cost issue at the moment as well? Or is it just purely that the technology doesn't exist? Or is it a bit of both?
The technology is being developed. It needs to be scaled up. The labour force and the safety of the seafarers, we have to address that as well, and we need to train them. There is a cost implication, and that's where our market mechanism, with energy pricing mechanism, will come into place. But of course, it's also that this is a transition, and we have to look into any negative impact that our measures may have, not only on the populations, but on the economy as a whole. It's the issue here as well. You use an interesting term,
phrase I know about maritime blindness. Is that a difficulty here actually as well in terms of pushing the pace? If it was with oil and gas companies on the ground, there are communities being very vocal trying to push that pace, urging and urging their governments to get them to do more and more quickly. Bluntly, the environments we're talking about don't have a voice in this debate and you're only hearing one side of it all the time, the industry saying about how difficult that transition is. Is that a problem here?
No, we all have recognized it. We looked into shipping with the decisions that we have been making back since 2011. We have recognized that we need to play our part in decarbonizing the sector in order to protect the environment.
And the value is speaking for itself. We can see that in the way that national disasters increase and are more frequent right now, as well as the coastal communities, in particularly small and developing states. But this is why shipping is taking this very seriously. We have a
pathway to decarbonize by around 2050, taking into account all the technological development, including the new alternative fuels that need to be produced and supplied for the sector, and the scaling up of the labour workforce for the shipping. The fragmentation of kind of global...
global economic partnerships, I suppose, if you like. Does that make your task more difficult, getting agreement around the world? Is that harder than ever? Geopolitics in general makes the regulatory process more challenging than in other times. But we have faced these things before. And we have just demonstrated back in April, just recently, that multilateralism is alive, is the way forward, and that with differing of opinions, which is absolutely understood, member states
can still come together and take decisive decisions in order to protect the environment. And IMO has just demonstrated that. But in terms of policing that, if not everybody's on board with policing, whatever you come up with this again this week, then it's all kind of null and void almost.
We have a regulatory framework in place that is then implemented by the member states. For decades, it's been an area where IMO enhances the support that gives to the countries in order to carry out those inspections that will guarantee that the ships meet expectations.
the requirements and this is no exception we will continue to work in enhancing that implementation taking into account that some countries have shortcomings at national level in order to implement properly do you worry time's running out
No, I'm optimistic that we actually all recognize the seriousness of the situation. And you mentioned about cost. And yes, there is a cost in decarbonizing, but we all should recognize that we have also invested in actually polluting the environment. So we all have a role to play here.
Arsenio Dominguez there, Secretary General of the International Maritime Organization, speaking to us from Nice, France there. Let's round out today, as I mentioned before, talking global sport, because there's been a kind of build it and they will come approach in recent years to women's sport. And boy, has that proved true. No more true, no more so even than in women's football in particular, and revenues for the women's Super League, the equivalent of the
Premier League here in the UK soared more than 30% to an excess of £65 million, so $80 million plus for the most recent campaign that the sports business group at the Global Accountants Deloitte looked at. And Jennifer Haskell is the knowledge and insight lead for Deloitte and joins us now. Jennifer, thanks for being with us on World Business Report.
Thanks for having me. Big jump then in revenues. And most interesting, I suppose, was that that wasn't just driven by more people going through the gates, I guess, as well. What did that tell you? And what might that be able to tell us, I suppose, more broadly about women's sport full stop? Yeah, of course.
Of course. I think one of the things that we saw from our analysis of the Women's Super League Club's revenue is that commercial revenue was a major driver. And so in the past year, Women's Super League Club saw a major uplift in commercial revenue, which mirrors the global trends that we're seeing. And so new brands are getting involved in all different markets and all different women's sports that are really starting to take advantage of the distinct identity that women's sports offer. And so what is that? Is that
traditional sponsorships or is that TV revenues as we were talking about a little bit before with Jane about streaming where are you seeing the kind of biggest growth struggling with Jennifer's line a tiny bit there but Jane from Rathbones oh there we go sorry Jennifer your line just cut out again just pick up that answer where you where you where you began again if you wouldn't mind
No, we're having a bit of a battle with that line, aren't we? As well, Jane Sydenham, as I say, still with us from Rathbones. Jane, you were talking about that big sort of spin out between Warner and Discovery. One of the things that Discovery has hoovered up in recent years has been sports rights. And that's been an interesting area in the latest news.
streaming wars, haven't we? We've seen Netflix and the others look to do it too. Areas where they can sort of sweat to try and find more viewers beyond the kind of dramas and films that they had already. Yes, I guess it's a sort of natural progression as the market matures, as it becomes more competitive. You know, they're going to be looking for other areas that they can generate revenues from to diversify.
But, yeah, I mean, it's, you know, every area of streaming and broadcasting is now just becoming more and more competitive. Yeah, a battleground. And any new eyeballs from anywhere, which, of course, these, as we know from Deloitte's numbers and Jennifer Haskell's numbers, is an enormous growth area. Is that what you're seeing, Jennifer? Sorry, we lost you as you were trying to answer that. Is it TV money that's coming into the game that's driving that revenue growth in particular, or is it elsewhere? Yeah.
I think we're really starting to see brand sponsorships drive a lot of the revenue. So we're seeing not only larger, more lucrative full club sponsorships, if there is an affiliation with the men's team, but more and more often we're starting to see women's only sponsorship deals as well, which are activating in a way that is more unique towards a woman's specific sport audience. And where is the next step then? Where is the next growth area, do you think, from the data you're looking at?
I think as we start to see women's sports globally professionalized, we're starting to see new fan engagement strategies. So we know that women's sports audiences tend to follow athletes more so than traditional men's sports audience. And we also know that they are very engaged digitally. So I think as we learn more about fans and their behaviors, we'll be able to unlock those
new revenue streams, but also more engagement from a global scale. Yeah, really interesting area. More on the BBC website, bbc.com. Forward Splash Sport, actually, for that one. Jennifer Haskell there from Deloitte, thanks so much for your time. Big thanks too to Jane Sidnam from Rathbones Investment Management and for you for listening to World Business Report.