this is business live from bbc news with sally bundock and ben thompson. building bridges. us secretary of state mike pompeo is in china to improve relations between the world's two largest economies. but can he calm fears over the escalating trade war? live from london, that's our top story on monday 8 october. mike pompeo has said "we are determined to win" a trade war with china. so does he visit the country bearing an olive branch or a big stick? we assess the mistrust between the world's two largest economies. also in the programme the money

is pouring in to the uk government's coffers from some fo the worlds biggest tech giants. facebook‘s has risen m more than $20 million — or £15 million — that's triple the amount it paid in the previous year. and we'll be getting the inside track on the bottled water industry. is it money well spent? and as bricks and mortar stores struggle against the online retail giants, should trading laws be relaxed to allow them to compete? let us know — just use the hashtag #bbcbizlive. do get in touch about the stories we are covering, whether it be the high street, bottled water or the likes of facebook paying more tax. 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. china is running out of ammunition because it exports more to the us than the other way around — to the tune of $375 billion in 2017. china may be forced to hit back in other ways, 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. but since that story was released, apple and other tech giants have refuted that investigation. charles maynard is with me now. he's co—founder of bda partners. welcome to the programme. given everything that sally has laid out, what will this trip achieve?m everything that sally has laid out, what will this trip achieve? it is a working group session, so this is happening behind closed doors, and we shouldn't expect huge announcements necessarily. but behind those closed doors, it is clear that both sides are fed up with each other. for the chinese side, on the one hand they are thinking we are on the receiving end ofa thinking we are on the receiving end of a never—ending escalation of tariffs, and also accusations from

mike pence saying that we are more responsible for us meddling elections than the russians are, and only allow hand they are seeking help from the us to make a deal with north korea stick, so there is a lot to discuss and we will see where that goes. and $250 billion of chinese goods, half the total, already subject to tariffs, and more on the way. what will they make of that threat? judging on past performance, it is perfectly possible, but everything hinges on the mid—term elections on november the mid—term elections on november the 6th, so both sides will be holding fire somewhat to see what goes on there. potentially trump might be responding to the domestic base, but for the moment we have to wait and see until that is resolved.

and we have seen this tit—for—tat war, but china is running out of ammunition because it has that surplus, so there is a danger that it runs out of things to put tariffs on. above all, china has not been seeking to escalate this. they want a solution to this dispute, and therefore they have matched rather than escalated, and with that in mind, xi is thinking whether aggressive countermeasures will work well. it is all very well to do them, but what is the reaction to them, but what is the reaction to them, both domestically and internationally? they are not out of ammunition, they buy a lot of treasury bonds, there is a good surplus into the us, but there is a services deficit into the us, and thatis services deficit into the us, and that is something they can go after, and going back to north korea, china is seeking help from the us, china

is seeking help from the us, china is 95% of north korea's trade goes through china, all of its food and energy, or a huge proportion does, so energy, or a huge proportion does, so there is quite a lot of leverage there. china has portrayed itself quite successful as the wronged party in this dispute, and upholding global trade practices. going after us businesses doesn't match that, and also trump frankly wants us businesses out of china somewhat, so playing into trump's gender is not necessarily a great result. fascinating, isn't it? charles, thank you, we will keep an eye on that. thank you very much. let's squeeze in some other business stories. facebook‘s uk subsidary paid $20 million in tax this year — that's around £15 million —

triple the amount it paid in 2017. elsewhere, paypal‘s uk subsidiary has agreed to pay an extra $4.1 million — or £3 million — in tax following a review by british tax authorities. last week, chancellor philip hammond raised the prospect of a new tax for large technology companies which have frequently been criticised for paying modest amounts of tax in the uk. japan‘s prime minister shinzo abe has said the uk is very welcome to join the trans—pacific partnership trade deal. the tpp is a trade agreement between 11 countries, including japan, canada, australia and malaysia. mr abe told the financial times that japan would welcome britain "with open arms". he also urged the uk and eu to use "wisdom" to avoid a no—deal scenario on brexit. the far—right candidate in brazil's presidential elections,

jair bolsonaro, has beaten rival fernando haddad to win the first round of the vote. markets have reacted postively to the news, with bolsonaro's promise of privatising state—run enterprises and giving the central bank greater independence — which has appealed to investors. emerging market currencies rose against the us dollar after the first—round result was announced. we are going to take you back to china now. china is to cut the amount of cash banks must hold in reserve as part of efforts to support its economy, amid an escalating trade war with the us. tim mcdonald is in our asia business hub in singapore. give us more detail on the central bank of china. it is interesting, markets are down across the region because investors are worried that the people's bank of china would

only cut the rate requirement because it was worried about a slowing economy, so reducing the reserve rate freeze “— slowing economy, so reducing the reserve rate freeze —— freeing up banks to lend more. this is the fourth time this year that the rate has been cut. the growth is squarely on the agenda, and that is wasn't where china was about a year ago. china seems to meet its growth targets, at the moment it is around 6.7%, but that kind of consistency makes people a little bit suspicious about how reliable those numbers are, so today's decline on the regional indexes could be seen as an example of investors looking what china does rather than what the official figures say, china does rather than what the officialfigures say, on china does rather than what the official figures say, on the broad interpretation is that it seems to bea interpretation is that it seems to be a move to cushion the blow of us tariffs. the rhetoric as you mentioned earlier has been escalating, and because china exports so much more to the us than it imports in return, it has to look

at measures other than retaliatory tariffs. thank you very much. let's have a look at the markets now if we can. can we show you the numbers? look at that, isn't that attractive! we are having a technical failure! let me fill you in on a few technical points. china reopened today for the first time in over a week, markets we re first time in over a week, markets were falling quite a bit in shanghai, partly to do with the central bank news but also catching up central bank news but also catching up on central bank news but also catching up on some central bank news but also catching up on some of what was going on during the week. a big mover in london is french connection, it is up london is french connection, it is upfor london is french connection, it is up for sale, shares are up 45% in london today, quite interesting. as things are not happening here on the catwalk, i am going to hand you back to the capable hands of ben thompson. we are looking for a

connection that a plug—in some cables! joining us is trevor greetham, head of multi—asset from royal london asset management. a lot of volatility on the markets 110w. a lot of volatility on the markets now. this isn't too surprising, because october is the month when stock market volatility tends to peak. there are some famously bad octobers come you think about the 1929 crash, 1987 crash, 2008, so things can happen in octobers. what is it about october that makes that happen? the summer is coming to an end, there is not much economic activity in the summer, and this is where you get your first proper take on whether the world economy is strong or weak heading into the fourth quarter, and it is a pivotal time. if there are dips in the market, it is best to buy them, because although you have this bad

news in china, china clearly slowing down, america is still booming, trump's tax cuts and spending increases will be feeding through for another six months. give us your ta ke for another six months. give us your take on all this money pouring in from the likes of paypal on facebook with all these organisations saying they are paying more now in terms of uk taxes, great news for the uk government, the treasury? this is a small start, because facebook is talking about paying £15 million in tax. i know it isn't an awful lot... baby tax. i know it isn't an awful lot... ba by ste ps, tax. i know it isn't an awful lot... baby steps, but a reasonably successful car retail business in the west midlands would be paying that much tax, so there is a lot more economic activity going on in this country through facebook. are we getting overexcited ? this country through facebook. are we getting overexcited? it is the start, the start of a very long process. but it is psychologically important, that idea that they are prepared to come to the fore and confess prepared to come to the fore and co nfess u p. prepared to come to the fore and

confess up. trevor, thank you very much. trevor is returning very soon. still to come. we take a look at how the bottled water industry become a multi—billion dollar global industry. so, do you like your water filtered through volcanic rocks — or straight from the tap? you're with business live from bbc news. first, a harsh reality in the uk, and you may not be surprised to hear this. 40% of young people in the uk can't afford the cheapest homes in their area, even if they have a 10% deposit. the institute for fiscal studies that did the research says a steep rise in property prices is being made worse by planning restrictions. jonathan cribb is senior research economist at the institute for fiscal studies. what are the greatest barriers to home ownership for young adults? is it just about is itjust about money? that really

is the key. over the last 20 years in the uk the incomes after adjusting for inflation for young adults rose by about 20%, but property prices are up 173%, and fundamentally that just brings property prices are up 173%, and fundamentally thatjust brings up the amount that people have to borrow such that they are just not able to any more, even if they have raised a 10% deposit. so what can be done about this? we heard theresa may announcing last week in her conference speech the removal of the cap on lending in terms of local government, that kind of thing, when it comes to housing. is enough being done? fundamentally, the government, if it wants to address this issue, the key thing to do is to have a system of planning which allows for more construction in areas of the

country where people want to live and where the prices are highest. a first—class study of planning restrictions in the uk from a few yea rs restrictions in the uk from a few years ago found that if the south—east have the same planning restrictions as the north—east, then prices in the south—east would be 2596 prices in the south—east would be 25% lower, the south—east being both oui’ 25% lower, the south—east being both our most economically productive pa rt our most economically productive part of the country but also those with the strictest planning restraints, and of course that very big green belt around london and other cities. we are going to have to leave it there, but thank you for yourtime, to leave it there, but thank you for your time, jonathan cribbed from the institute for fiscal studies. fascinating story on the business live page. rbs is considering changing its name. royal bank of scotla nd changing its name. royal bank of scotland says it could ditch its corporate name, according to a report in the times. sir howard davies, the chairman, is quoted as saying that the name is under review. so what should rbs rename

itself? this is business live. our top story — the us secretary of state mike pompeo is in china to try and improve relations between the world's two largest economies. he has a toughjob on his hands, without ongoing tariff war. let's have a look at the markets. some volatility as we go through into october as the markets try to digestive what the fourth quarter will mean for them and the state of the global economy. the thirst for bottled water has created a huge industry — and it's only set to get bigger. last year the value of the market hit $200 billion according to one study — that's up 9% on the previous year. the asia pacific region was the biggest consumer of bottled water last year, and increasing disposable income is expected to continue to boost growth. by 2021, the worldwide market is expected to be

worth $350 billion. well, we'rejoined by one man whose business is poised to take advantage of that growth. he's jamie douglas—hamilton, chief executive and founder of actiph water — which is based in edinburgh. welcome to the programme. we have a couple of bottles here that you launch last year. it is already a very saturated market, to pardon the pun. what are you hoping to achieve? we are competing more against energy drinks and sports drinks. that looks like a bottle of water to me. it looks like a bottle of water and tastes like a bottle of water, but thatis tastes like a bottle of water, but that is 100,000 times more alkaline than a that is 100,000 times more alkaline thana can that is 100,000 times more alkaline than a can of coke. why that good? because increasingly what has happened is our diets have become more and more acidic, we have more red meat, more sweeteners, more sugars, red meat, more sweeteners, more sugars, more red meat, more sweeteners, more sugars, more artificial ingredients,

and whilst our bodies are very good at self regulating to keep our blood of the high ph, you are putting more pressure on your internal buffering systems with an acidic diet, which is why in the united states when they drink alkaline water, people feel different from drinking it, they call it energy water. explain to us how you came up with this idea, it was all about a crazy trip from australia to african in a rowing boat? yes, we were rowing two and a half months, two hours on, two hours off, 2a hours a day, in all weather conditions. this is you and some friends raising money for charity? yes, to save the elephants, six of us were rowing all the way across, and we were drinking 13 litres a day of water, and we were flushing all of the salt out of our system, and one person mixed sea water with water, we were told never

to do that, but it was the best thing we could have done, and this sparked an interest research water all the world, and we did the research in japan, and all the world, and we did the research injapan, and that is where it all started back in the 1960s, it started as a cure for treatment the people with bad gut health, and it is now the fastest growing category in america. how would you get the message out? if i saw that on the shelf, it looks a bit different, but as sally said, it is sort of a bottle of water, and that comes at a premium price, doesn't it? so what will persuade me to part with money to buy this versus any of the millions of other rivals on the shelf? were trying to go down the emotional road, emotional branding, much more about lifestyle branding, so our tag line is charge up, drink active, be active, so people can

actually understand it. we do a lot of marketing, sampling, pr events. what about the plastic? right from the start we make sure that this would be 100% recyclable, so the cap, the bottle and the label is 100% recyclable, which a lot of bottles aren't. they don't have all three. but that discourages reusable, doesn't it? because you are drinking this and having to buy more to drink, whereas people want to just fill more to drink, whereas people want tojust fill up more to drink, whereas people want to just fill up their bottles and put them in the fridge or whatever, and reuse bottles rather than producing more and more plastic bottles, does that make sense? some people do reuse them. we actually recycle 47% of the bottles. if you ta ke recycle 47% of the bottles. if you take the whole plastic industry in the uk, only 14% is bottles, so it is not... so when you of your mates we re is not... so when you of your mates were rowing, you saw a lot of plastic of the ocean? the indian

ocean was ok. in the pacific around the west coast, around china, it is very bad. europe is surprisingly very bad. europe is surprisingly very good for recycling. 57% of all bottles are very good for recycling. 57% of all bottles a re recycled very good for recycling. 57% of all bottles are recycled in europe. really brief word, what was harder, running a business doing all that rowing? both, but they are very similar! both were adventures, both you start off and you don't know how they are going to finish but you know they are going to be the ha rd est know they are going to be the hardest thing you ever do. and you arejust at hardest thing you ever do. and you are just at the beginning of this particular journey. are just at the beginning of this particularjourney. we have got over the first stage, we are now... the first stage being raising the funding? on building the plant in getting the word out, but we are now trading on international markets, exporting to eight different countries, talking to another 12 international distributors and we are in talks with three major grocery chains, one of which we can announce in two weeks. we will keep announce in two weeks. we will keep an eye out. thank you very much. we know car makers are investing

heavily in automomous vehicles and electric powered engines — but what will the future of driving look like? well, at the paris motor show, there are all sorts of predictions, and a fair few ideas for cars that money can't buy. but how many really make the move from fantasty into reality? take a look at this. i could see you in one of those! how many actually make it onto the road? trevor is back, as promised, and we are focusing on retail. the measures being taken for high—street retailers, one of the reasons they are struggling is these empty shopping moors around the uk, landlords having a realjob to sell them. i know it is an issue in the united states, but i'm sure elsewhere it is an issue. the us was a trailblazer on this one. as you

are seeing more people shopping online, there is less footfall in the shopping moors, so the retailers struggle and sometimes the owners find they have an let units within the walls, and if you're trying to sell the shopping mall, you are struggling there as well, and in this country what we have seen is a very rapid increase in the value of industrial land, and what we are talking about is retail distribution, you have seen a drop in the last five years or so of retail land, that is what this story is part of. this is the consequence of our behaviour changing, it is all about the fact that much more of us spend a lot more time online shopping then we do in the shops. that's right, but also, dave lewis, the chief executive of tesco, saying it is also part of the tax difference, if you are an online retailer, you're getting away with low double—digit annual tax bills, £15 million we talked about earlier on from facebook, whereas you have

billions of pounds of riverview, and philip hammond was talking about a digital services tax that the uk can impose an online retailers to try to even things up a bit. interest in this story, tesco calling for an amazon tax, but a few weeks ago they we re amazon tax, but a few weeks ago they were all saying, no, that is unfair again, we have to get on with the competition. you can see the chancellor's point of view because he wants to get money from somewhere, and there have been commitment not increase fuel duty or do this or that, but how do you stop posterity at the same time? you have to get money from somewhere. i don't think a 2% tax. the trends we are seeing anyway, you are seeing the reinvention of the high street into a more experienced —based service rather than buying goods, which is happening increasingly online. let's just mention a couple of comments from viewers, because we asked you if you felt the change in the

trading rules was of combating what people see as unfair competition, so we have a comment, high—street retailers should not cut prices but maybe bring up the quality of service, that kind of thing in their shops, free tea or coffee is one suggestion. sounds good to me. thank you for your company. hello. it was a relatively cool weekend from many of us, but things are going to walmart, especially by wednesday. temperatures expected to be way above the average for the time of year, but for today, rain expected in the north—western parts of the uk, bright spells of england and wales. the rain is going to come from this wiggling weather front, it isn't going to move very far, it is just going to stay there, and the sight of that staying largely fine and dry. a few bright spells developing, hazy sunshine from time to time, and across northern

ireland, it is north—western areas that will see the bulk of the rain, and especially so towards western scotla nd and especially so towards western scotland where it will be quite heavy and relentless through the course of today. maximum temperature is 14-16d, course of today. maximum temperature is 1a—16d, feeling quite pleasant in any sunny skies, and any sunshine across england and wales. through tonight, this rain will continue across northern and western areas, and further site it will be largely clear, mrfog and further site it will be largely clear, mr fog patches and further site it will be largely clear, mrfog patches developing, it could develop temperatures into dan into single figures further south, remaining in double figures further north. on tuesday, still the rain in northern scotland and northern ireland, fine in the south, temperatures started to creep up, could reach about 20 degrees in the south—east on tuesday afternoon. through wednesday, this weather front is still with you across scotla nd front is still with you across scotland and northern ireland. you notice it doesn't move very far at

all, so they could be some problems with western scotland, but for england and wales, you follow the isobars, and england and wales, you follow the isoba rs, and you england and wales, you follow the isobars, and you can see by the wind arrows, that wind is coming all the way from north africa, so it is getting much warmerfor way from north africa, so it is getting much warmer for many of us during wednesday. starting off with lots of sunshine, eventually that will clear away to the north, and and northern ireland willjoin the rest of the country to have some sunny skies, and for all of us it will turn warmer, temperatures in the north 18 degrees, and across central and southern areas, could be as high as 23 or even 2a celsius, so those temperatures for this time of year really are quite high. getting to thursday, perhaps just a little cooler, but not by too much, they could be a few showers around on thursday, friday turning more u nsettled thursday, friday turning more unsettled and suddenly into the weekend it is looking unsettled for many of us as well. more details later on. hello. it's monday. it's nine o'clock. i'm joanna gosling. welcome to the programme. drastic changes to the way we live

are needed to bring global temperatures under control. that's according to a new report by the intergovernmental panel on climate change. countries need to up their ambition and get moving now with climate change action if we're going to keep 1.5 degrees within reach. global emissions of carbon will need to halve in 12 years to limit temperatures rises to 1.5 celsius. so what if anything can you do about it? 40% of young adults cannot afford to buy a cheap house in their area, even with a deposit. could a proposal to give tax breaks to landlords who sell directly to their tenants make a difference?