this is the business briefing, i'm sally bundock. us secretary of state mike pompeo is heading to china to try and defuse the strained relationship between the world's two largest economies. but will he be able to halt the escalating tariff war? the cars of tomorrow, or just wild dreams? we take a look at the most exciting concept cars at the paris auto show. and on the markets, it is a mixed day across asia. japan is closed today, but shanghai has reopened following a week—long holiday, and bore the brunt of the selling, as china's central bank takes steps to help lenders and boost the economy. the us secretary of state, mike pompeo, arrives in beijing on a mission to de—escalate tensions. his trip comes at a time of deep mistrust between the world's two largest economies.

$250 billion of chinese goods, about half the total, are already subject to us tariffs in an escalating trade war. but president trump is threatening to slap import duties on everything china sells to the us. beijing, which accuses washington of protectionism and bullying, has so far retaliated with tariffs on $110 billion of us goods. it is running out of ammunition due to its trade surplus with the us, and may look at other ways of hitting back, such as throwing up fresh barriers to american businesses. the us measures are designed to punish china for what the trump administration says are unfair trade practices, such as intellectual property theft. those claims appear to be supported by a bloomberg report last friday claiming beijing had inserted spying devices into us computers via chinese microchips. jinny yan, chief china economist at icbc standard bank,

joins me now. so we don't know what the official agenda is in terms of mike pompeo‘s visits, but trade is bound to be discussed, isn't it? i think visits, but trade is bound to be discussed, isn't it? ithink so, i think the escalating tension is clearly causing huge uncertainty for companies and who are making investment decisions that involve uncertainty over whether two largest economies in the world are heading. if we continued its downward spiral towards further tension between the two economies, clearly that is going to be very negative for investment sentiment. so what is the expectation about this trip? what can mike pompeo achieve?” expectation about this trip? what can mike pompeo achieve? i think from the chinese angle i think they will demand to hear exactly what the us wants in the immediate term. i think clearly they want to address the current account deficit issue, but that is not something that can

be changed overnight. so clearly the us needs to set on the table exactly what can be achieved over the next few months, and china will obviously need to, you know, give an answer. but i think the tactic has been to shift attention from trade towards other things, and i think china is not happy about that. what impact is this all happening on the chinese economy “— this all happening on the chinese economy —— having on the chinese economy? we have had data which rang some alarm bells, today we saw the people's bank of china change its policy to help chinese banks lend out more money and therefore boost the chinese economy. what is the picture looking like? clearly this has come at a very difficult time when china was already facing a much wea ker when china was already facing a much weaker and to the year in terms of its domestic economy, and so far, although the trade frictions are causing some impact if you are looking at sentiment, on actual trade figures, actual net exports, there has been a drag on the economy. you know, earlier in the

year, the actual impact is really, for example, further depreciation expectations for the currency. the immediate impact is not actually on the trade volumes, as such. that is in the months to come. you say that is to come in the months to come, it is to come in the months to come, it is the same for the us as well. at the moment the us consumer is not really feeling the impact of this, which i imagine is important to the us president in the run—up to the midterms in november. well, the us is very much a self—sufficient economy but wall street will be fearing how much of an impact this will have on chinese purchases of us goods. so i think this will see a lot of that unravel and this is exactly why these talks are very important, to really set the scene and set the picture in terms of what to expect. i don't think any of the economy is globally want to see this

escalation in tension between the us and china. always good to see you, thank you for coming in. we will keep you across any developments as far as china is concerned, and the us. as you have been hearing the far—right candidate jair bolsonaro has won the first round of brazil's presidential election. he will face the left—wing workers' party candidate, fernando haddad, in the second round on 28 october, after he failed to win the 50% of valid votes needed to win outright. so to what extent is the economy a factor in this presidential race? our south america business correspondent danial gallas joins me now from sao paulo. good to see you. i was talking to your colleague earlier about the politics. let's talk business now. to what extent is the economy a factor? well, the markets have been reacting very well to jair bolsonaro's growth in polls, and just last week there was a huge rally in brazilian markets. mainly

the markets embraced this far right candidate, who used to be sort of an unknown figure, a backbencher, and people didn't really know what jair bolsonaro would do. he really became this market figure because the other side is the workers' party, which has a policy of state intervention in the economy and things that markets don't like. so we are expecting to see a little bit of a rally last week because markets were like what they saw. jair bolsonaro did not win the election outright but is in a strong position to win the election three weeks from now although it will be a tough race for him as he has very high rejection rates within the brazilian electorate. and his economic policies or promises, give us a snapshot of those. he used to be also a state interventionist, a nationalist. he comes from the army, but since last year he has a market figure beside him, who is pretty

much from the financial sector and has been promising privatisation of many state owned companies. and also economic reforms such as austerity measures and things that markets believe will put brazil in the right direction. so this is why people in the markets are embracing a lot of his economic policies. he is really embracing this pro—business agenda. thank you so much. now let's brief you on some other business stories: paypal‘s uk subsidiary has agreed to pay an extra £3.1 million in tax following a review by british tax authorities. in its newly—filed accounts, paypal says: "hmrc has been reviewing the compa ny‘s direct tax position. as a consequence, the company has agreed and settled its outstanding liabilities, and as a result is not subject to any current inquiries." around 40% of young adults in the uk cannot afford to buy one of the cheapest homes in their area, even with a10% deposit, according to a new research. the institute of fiscal studies said

house prices in england have risen by 173% over two decades, but average pay for 25— to sa—year—olds has grown byjust i9% over the same period. china's central bank has cut the amount of cash banks must hold as reserves by one percentage point starting from 15 october. it is the fourth cut this year. policy makers are seeking to shore up the economy amid a worsening trade war. more now from the paris motor show, and we are talking concept cars today. to you and me, these are the cool cars money can't buy. take a look at this. these are the financial markets. we haven't got japan, their markets are closed for a public holiday. hong kong is down nearly i%, reflecting the losses we have seen in shanghai,

and australia also down, a pretty negative day with even the price of oil heading lower. it is columbus day in the united states, equity markets will be open but the treasury will be closed, which gives markets in asia a bit of a breather from some of the trends we have seen lately. that's it for the business briefing this hour. the scottish national party leader, nicola sturgeon, has said her party's 35 mps would vote in favour of another eu referendum if given the opportunity to do so at westminster. her comments are a boost to the campaign for a so—called people's vote, although the first minister said the real solution for scotland was independence. our scotland editor sarah smith reports.

calls for a second referendum on the terms of brexit were accompanied through central london by hundreds of dogs, their owners delighted to hear the snp now support their cause. while labour has not ruled out supporting a so—called people's vote, theresa may has said it will not happen. nicola sturgeon told the andrew marr show that, faced with a choice between a cobbled—together brexit deal or no deal at all, mps should look at an alternative. there's no doubt the calls for a second referendum would grow in those circumstances, and i've said before we would not stand in the way of a second referendum, a so—called people's vote. i think the snp mps would undoubtedly vote for that proposition. they would — that's a very important moment. the snp are the largest uk party to commit to a second referendum on brexit, with 35 mps now prepared to support it. but, for many nationalists, that is not the referendum they really care about. tens of thousands joined a march

in edinburgh in support of a second referendum on scottish independence. opinion polls published today suggest support is growing, but the question is when to call another vote. nicola sturgeon promised an update on the timing of an independence referendum this autumn. now, she says we must wait until we know the details of any brexit deal. the challenge is how to maintain her supporters' enthusiasm as she keeps them waiting. coming up at 6:00am on breakfast: dan walker and louise minchin will have all the day's news, business and sport. this is the briefing from bbc news. the latest headlines: climate scientists say we must do better. researchers redouble efforts and push for a new strategy to tackle global warming. brazil's right—wing congressman

jair bolsonaro takes a commanding lead in the presidential election, but he will face a run—off with leftist rival fernando haddad. now it's time to look at the stories that are making the headlines in the media across the world. we begin with the financial times which reports landlords are struggling to offload billions of pounds worth of shopping centres and retail parks as the crisis in bricks—and—mortar retail ripples through the uk's property sector. the guardian, in a related story, quotes the ceo of tesco — the uk's largest retailer — who has called for a 2% tax on online sales to prevent more high street chains from going to the wall. still with the guardian, and the news that the party is over for club 18 to 30 as thomas cook retires the brand. the group had put the name up for sale in the spring,

but offers were disappointing. the mirror has a dire warning for the human race as it reports the continuing fall of sperm count worldwide. researchers have put the blame on chemicals, stress, smoking and obesity. finally the evening standard gives its verdict on doctor who, and the historic debut ofjode whittaker as the first ever female doctor. a departure that had some fans up in arms when it first was announced. in fa ct arms when it first was announced. in fact the fan base was completely divided so what do they think now? in fact the fan base was completely divided so what do they think now? so let's begin. with me is andrew tuck, editor of monocle, a global news and business magazine. we begin with the crisis on high street. financial times looks at the fa ct street. financial times looks at the fact that landlords are saddled with

a glut of unsold shopping centres. quite a big problem. officially and unofficially a number of these centres up for sale is incredible but interestingly, the number of deals being done is at an historic low. they cannot get rid of them. this is the shift to online retail but there are many other interesting things. just look at car ownership. people do not want to get in a car and drive to do the weekly shop or even to purchase clothes on a saturday. those people want to go online. that is where convenient shopping is now. for these operators, they need to regenerate and we will talk about that later on, they need to regenerate and they have to rethink.