hello. this is business live from bbc news, with sally bundock and ben thompson. new year, new hope? there could be signs of a breakthrough in the trade standoff between china and the us. live from london, that's our top story on wednesday january 2nd. president trump has spoken of "major progress" in easing tensions with beijing. we'll assess if a breakthrough could be around the corner. also in the programme: goodbye and good riddance. major stock markets have just entered their worst year in a decade. will 2019 be any better? well, so far, not so good — this is the scene in europe on the first day of trading of the new year. we'll be getting an expert view.

also — sun, sea and sustainability — how one leisure company in bali is hoping to become totally carbon neutral. we will explain how. with the new year getting under way, we want to know, what are your hopes and fears for 2019? are you an optimist, or a pessimist, about what the coming year has to offer? let us know. we will discuss that later. just use the hashtag bbcbizlive. a very warm welcome to the programme. you get in touch with your comments and we will share them later. the new year is beginning with new signs of optimism in the us—china trade war. the leaders of the world's two biggest economies have both made positive noises in recent days. president trump went as far as to say "big progress" was being made over the stand—off that is at the top of investors‘ minds.

last year, the united states slapped tariffs on $253 billion of imports from china, amid president trump's concerns over trade barriers, subsidies and alleged technology theft. china retaliated with taxes on $110—billion of us goods — including soybeans, liquefied natural gas, chemicals and some food items. but with the two countries in the middle of talks, the us suspended an increase in tariffs that would have seen the levy on $200 billion of goods go up from 10% to 25%. ben. with us now is duncan wrigley, chief strategist at everbright sun hung kai. nice to see you. sally running through it and today, at the start of the new year, we are looking at what that trade deal could look like between the world's largest economies and the war that continues. what is the significance of how we have got this position?

the two largest economies in the world with tariffs slapped on each other, that doesn't work for either side? it doesn't work in the short term and it hits american farmers and chinese exporters. but the reason for this at least amongst much of the us businesses for example, they are long—standing complaints about the terms of doing business in china. fair market access in areas like banking on manufacturing. accusations fire the us trade representative of false technology transfer. so the rationale, the driving force for the us to take this action is to try and renegotiate the terms of doing business with china. we have heard some signs of progress, that things might be heading in the right direction. by that, we mean perhaps some of those tariffs will be reduced or eliminated altogether, but there is no real evidence of that, a suggestion of that but no real signs of what might change.

well, we don't know what is being discussed behind closed doors, that is for sure. what we do know our actions. so china has already taken several actions which could be seen as gestures of good faith. immediately after the g20 summit and dinner between trump and xi, china started to move in supporting important three different areas. one is soya beans, already talking about millions of tonnes of soya beans. —— too. and cut auto tariffs. we know those areas have been moved. and in some of those structural issues still being negotiated in the next couple of months until the start of march, these are more difficult areas like intellectual property rights, technology transfer. we do know china has made policy moves that speak to those. so for example, revising foreign investment law to

prohibit false technology transfer. china has set up a new intellectual property appellate court, specialised court for dealing with intellectual property cases. it is the culmination of a long set of intellectual property reforms. so what you do see china doing our own number of actions which could be interpreted as moving in the right direction for these negotiations. what is interesting, since this trade war began, the economic picture has changed. suggestions of a slowdown in the united states, a change of demand in china, but also the political situation. not least in the us. that has changed fundamentally as well. absolutely, you have hit upon the other key factor, china has made some moves and the us republicans have lost the house. in the us political system, the president has discretion over some areas much more than us and one

of those is international affairs, and this is an area where he has an opportunity to secure what could be called a political winner for him. from trump's personal point of view, he very much wants to get a political win in this area of trade with china. so interesting, whether it comes out the politics or economics or in this case, a bit of both. duncan, really nice to see you, thanks for that. thank you. let's take a look at some of the other stories making the news. deutsche telekom has filed a lawsuit against the german government over a 56 auction. the german newspaper die welt has reported that the company is challenging a set of preconditions for participating in the auction. those conditions required bidders to invest in expanding the country's mobile network and could force them to allow new entrants to use their infrastructure. google has won approval from us regulators to deploy a radar—based motion—sensing device known as project soli. the federal communications commission says the soli sensor will enable touchless controls that

could benefit users with mobility or speech impairments. the regulator said the decision "will serve the public interest". netflix has reportedly removed an episode of a satirical comedy show that criticises saudi arabia. the streaming giant has taken down the episode of "patriot act with hasan minhaj," after officials in the kingdom complained. netflix confirmed the move to the uk's financial times newspaper, but the move has been condemned on social media. and us president donald trump has invited a group of congressional leaders to the white house, in an attempt to end a partial government shutdown that has now entered its second week. the two sides can't agree on funding — particularly for mr trump's proposed mexico border wall. the meeting is expected to include a briefing on border security from the department of homeland security. cathay pacific did not start the

year of welcome of a mistake from asia's airline. asia's biggest international airline sold a number of business—class tickets, costing $16,000, at economy prices! if you snatch up one of those, well done! the company have yet to say whether they will honor the tickets. mariko 0i is in singapore with more. from our very economy class seat! hgppy from our very economy class seat! happy new year and let's talk about this ticket issue. it is not the first time this has happened but the big question whether this company will honour the sale prices? well, guess what! the company tweeted half an hourago to guess what! the company tweeted half an hour ago to say they will honour those bookings. so very looking passengers who picked up those tickets at those low costs. i guess they had to because this is not the first time that happened but other carriers including singapore airlines which made a similar mistake in 2014, they honoured those

bookings. but 2018 really wasn't a great year for cathay pacific. if you remember it in november, the carrier said its computer system had been hacked and information of over 9 million passengers had been exposed, the world's biggest aviation data breach. also back in september, it had that very embarrassing spelling mistake on its own claim. cathay pacific with an f. but this will make some passengers very happy. it can only get better from here! the year can only improve for cathay pacific. nice to see you, see you soon. these are the markets. but too much losses across the board, i'm afraid to say, very little cheer as investors returned to work in asia. and the price of oil is down. in

europe, are we seeing any improvement? no, iam europe, are we seeing any improvement? no, i am afraid europe, are we seeing any improvement? no, iam afraid not! it is looking pretty grim. we will discuss in more detail about europe ina discuss in more detail about europe in a moment. and michelle fleury has the details of what's ahead on wall street today. a new year and a new trading day but, for investors, many of the same headaches plagued the markets at the end of 2018. the trade war between the us and china isn't over. global growth is slowing. and the strength of the us dollar is making life tougher for us exporters. plus, you can forget the jolt of caffeine from tax reform, which helped lift corporate profits and stock prices at the start of last year. so, what does 2019 hold? well, the earnings calendar is off to a slow start. the pace of companies turning in their report card doesn't pick up until later in the month. well, we should get a glimpse into the health of us manufacturing. economists expect the purchasing managers' index for december to drop to 53.9, as heightened economic worries take their toll. that would be the second monthly drop.

now, this is still only an amber—light warning, rather than a flashing red signal. readings above 50 indicate an expansion in manufacturing. michelle in new york looking at what the markets have in store. joining us now isjeremy stretch, head of currency strategy, at cibc world markets. hgppy happy new year. the markets are not very happy? it isa the markets are not very happy? it is a contrast to 2018 where markets are opening up strongly with a positive bounce at the beginning of the year and tax cuts from the us propelling equity to a strong start the year, but that dissipated at the end of last year, which was pretty awful and that has continued. because of trade tensions which you have talked about, and we still see a number of tensions in other markets, the euro, the uk and the brexit scenario. there is a lot of news for markets to digester and it

is difficult to see too much optimism at this point, although it may be the case that markets are getting a little overly packed to —— pessimistic. too optimistic this time last year and perhaps to ask mystic to start the following year. what is your outlook? i would still say i am cautiously optimistic. we are seeing slower growth than we have seen over the last couple of yea rs, have seen over the last couple of years, but we should not necessarily flash up recession warnings just yet. where would they be flashing up when you say recession warnings? we are seeing slower growth in the us, asa are seeing slower growth in the us, as a reflection of the reduction of the fiscal sugar rush from the tax cuts of last year and the impact of those interest rate hikes. so growth is slowing but we are not seen the recession risk yet. but in the same context, growth is slowing down in asia via china and here in europe as we see the structural issues and the budgetary pressures ongoing. so we are seeing a slower growth scenario but we're still seeing growth and

thatis but we're still seeing growth and that is the to remember. the markets are seeing the worries rather than seeing still the continuation of a long—term growth strategy which is still in place since the great recession at the end of the last decade. for now, thank you. we will end on that slightly optimistic know if there was one! for now, thank you. we will look through some of the newspaper stories. new light and keep your thoughts coming about the year ahead. still to come... how one holiday company in bali is hoping to cash in on green tourism — by turning itself carbon neutral. it has a rather unusual name. it is called potato head. you're with business live, from bbc news. new year means the cost of your ticket is going up from this morning. following a price

hike of more than 3%. passenger groups have criticised the government for not freezing fares after a year of disruption through timetable changes, strikes and upgrades. latest figures show cancellations and long delays are at their highest rate in 17 years. 0ur transport correspondent tom burridge has this report. passengers in the north of england suffered the most in 2018. but across britain, delays and cancellations have risen to their highest level in 17 years. with fares now going up again, passenger groups say we're not getting value for money. it's much easier to swallow a price increase if you think you're getting value and, at the moment, too many trains are still too late. too many people are late getting to work and getting home again, cancellations, and i think it's really hard to talk about a fare increase when you're not getting what you're paying for. from today, tickets increased by roughly 3% in england and wales. in soctland, the increase is slightly smaller.

it means an annual season ticket from bradford to leeds will cost £32 more. someone commuting from reading into london will pay an extra £140. the rail industry says 98p of every pound spent on a ticket is invested back into the railways. today, it's launched a new rail card for those aged 26—30 and it wants the government to act so there can be a simpler ticketing system for everyone. the rmt union described the railways as a grossly mismanaged rip—off. the government has said fares could rise in line with the lower index of inflation, if unions agree that rail workers' wages should also increase at a lower rate. tom burridge, bbc news. it isa it is a happy new year for someone out there. you might be able to afford those train fares if you were the winner of the euromillions last night, a uk ticket holder winning the £150

million ticket price. have you checked? ifi have you checked? if i had checked and it was me, i wouldn't be here! it is the biggest winner in uk history. those are the numbers. let's know. you could get a newjob announcing the lottery numbers! you're watching business live. our top story... there are signs of optimism in the trade war between china and the us. president trump says there's been major progress in easing tensions between the two sides. the world's the worlds to largest economy is locked in a trade war. you would think that would boost financial markets, not so. on the day of trade in 2019, not a good beginning. all firmly down. france is the weakest.

0ne analyst talking about the fact that in france, they'll seeing wea kness that in france, they'll seeing weakness because of concern about the yellow vest protests which have not been resolved, by any means. many of us will have celebrated christmas and new year's at clubs, bars and restaurants, but they're not exactly but they are not considered sustainable. one of the best known beach clubs in bali is hoping to change that. ronald akili is the founder of a chain of clubs called ‘potato head', and is determined to make his business environmentally conscious. he's pledged to become the first carbon—neutral hospitality firm in indonesia. sharanjit leyl caught up with him in singapore and asked why safeguarding the environment was so important to his business. it was never intended to be a business, hence... like, otherwise,

we wouldn't call it potato head. so when we started, we were very fortunate to be successful in our first year and we've decided we could actually turn this into actual business. so we started growing the business. we grew from a restaurant to a bigger format of operation to a beach club, and then to overseas locations like singapore and hong kong. then, next, we went to the hotel industry. now, you've pledged to become the first carbon—neutral hospitality firm in indonesia. why? with all the success, it comes with a lot of pressure. i was constantly on the road, i was constantly getting sick. and i have four young children, a lovely wife, but i never see them. i was always travelling. so, we started to lose our drive to grow the business. and we went back to the drawing board — how can we use our business to make a positive impact in the world? we realised that we can connect and curate the solutions in ways that are more inspiring to our guests.

that are more relevant to our guests. so from sustainability, from food, from drinks. look, we're doing all this, it makes us feel better, we're protecting the environment, we're protecting all of our other stakeholders, but the business continues to improve better. so, this is our ninth year. when we start shifting in this direction, we see tremendous results from a financial point of view where, at its best, we continue to gain and retain our market share. i mean, like, we really want to show it to our peers that if you do this, we believe the next generation actually will buy more into your brands by being much more conscious. so, you only took on this sustainable drive about five years ago. so, comparing how you run your business now versus five years ago, isn't it a bit more expensive to become sustainable? surprisingly, it's not that much more expensive. itjust requires much more effort. for example, like, when we want to run the zero philosophy,

like, we had to create the zero—waste philosophy, like, we had to create our own compost centre. but we use our own creativity in trying to recycle almost everything. from organic waste or not organic waste. there are incremental costs in using organic products, but most of our customers are willing to pay higher for that premium. but some people might say, you know, going sustainable is a bit of a publicity ploy. is it? for us, like, we're really doing it, genuinely, this is what we believe in, and we want to run the business this wayjust because we feel there is a need for us to be this way. hence, it's not fake, like, it's genuine. itjust so happened that now we realise the generations that we're serving for, they believe in this. they believe in a higher purpose mission brand. they believe in something, a brand that provides them with much more deeper connection, with much more responsibility, rather than just other transactions. earlier, we asked you for your

expectations for the years ahead. steve eburne says it's going to be a great year, full of twists and turns and opportunity for entrepreneurs prepared to take it! mahi raj is in india, she's looking forward to peaceful resolutions across the globe for trade and industry. maybe you will get your wish, we have been talking about the trade war between china and the us. eric says, same rubbish, different year, nothing will change. rich get richer, the poor get poorer. not a positive outlook. thanks for your thoughts, we havejeremy back. let's stay on the theme of brexit, the year ahead. stay on the theme of brexit, the yearahead. a stay on the theme of brexit, the year ahead. a vote in parliament. we are told it is the week beginning january 14 but we know things can

change at any time. it is going to be quite a year? it is going be quite a year, we had the brexit negotiations ongoing in the uk and the political instability in the uk department is difficult as resolving that. in the eurozone, there are structural concerns and risks. the touch upon the weakness in the french equity market because the yellow vest protest. we still have budgetary issues which are still impacting italy, although those issues are diminishing. and we have european parliamentary elections in may and that potentially adds to the uncertainty in the european political zone. there is going to be ongoing political risk which is going to create market instability in that context. looking at the headline in the telegraph, the eurozone could break up if it doesn't reform say experts, what you make of this? this is a story that has been around a number of years, that when you think about the project that is the european union with monetary union, you could argue that are structural issues which do

need to be resolved. 0ne that are structural issues which do need to be resolved. one is the need to have greater political integration and fiscal union. so you could almost put the story out every year and eventually, you will be correct. will it be this year? i'm not sure it will be. as long as the european political leaders, and that is the important point, we have to remember it is politicians at the heart of it, as long as they still regard the costs of maintaining the integrity of the system are appropriate or sustainable, the system will perpetuate. we have seen that going back to the early parts of this decade when we saw various crises in greece and spain and italy now. as long as politicians regard the risks of break—up to be so extreme, the system will perpetuate. soiam extreme, the system will perpetuate. so i am not sure this year will be the year it will break up, but we will continue to see warnings on an ongoing basis. towards the end of this week, we will get a lot of news from retailers in the uk about how they did over christmas and in the guardian, it says the city is braced

for bad news. as we went to the end of the year, consumers were increasingly nervous about what would come forward and 2019. equity markets were slowing aggressively so people's paper wealth was being diminished, housing markets and house values were under a bit of pressure. so consumers house values were under a bit of pressure. 50 consumers were withdrawing from spending. greater levels of proportionally saving, so earnings going up and inflation going up and that would normally be encouraging for retailers, but people have said, let's save more money for a rainy day and that is a reflection in terms of the retail spending numbers and that is why it has been a difficult year or end of yearfor has been a difficult year or end of year for retailers. yes, we tend to talk about it being difficult and the high street, but if you look at the high street, but if you look at the latest figures from online retailer asos, it is notjust the high street. no, we have seen an increasing proliferation of spending on the internet, around 20%, but that spending is now even compromised and hit in the same way.

you may not have the same issues in terms of the bricks and mortar retailers in terms of rent and rates, but you have a problem that the consumer is not spending, you have to maintain volumes by discounting which hits your margin. it is the same problem that if consumers are deciding they would rather save rather than spend at this point because of the uncertainty, it will impact all of the retailers across the piece. uncertainty, it will impact all of the retailers across the piecem is good to see you on this version of 2019. i can't believe it is 2019! yes, fasten your seat belts, it is fairto yes, fasten your seat belts, it is fair to say. a bumpy ride, we will have it all on the programme. thank you. have a nice day. good morning. a change in the year

brings a change in the weather conditions. it has been a much colder start than we have had in recent days, but it is going to be quite sunny across many western areas, feeling colder throughout the day. temperatures this morning down to —3, minus four degrees in parts of the midlands. towards scotland, where temperatures got as low as minus seven celsius this morning. a big area of high pressure is dominating the weather at the moment. slap bang right across the uk, and when you get a situation like this, not a great deal of change. just chasing cloud around over the next few days. for today, the best of the sunshine across scotland, north west england, wales and the south—west. more cloud across eastern england, perhaps showers here, or cloud across northern ireland. where you have the card, temperatures seven to 8 degrees, but typical values around three to six celsius. this evening

and night, we still have cloud across the eastern parts. there could be the odd shower across east anglia and the south east. further west, more sunshine and clear skies. and with those clear skies, temperatures once again plummeting. a widespread frost once again, down 2-1, a widespread frost once again, down 2—1, minus four celsius. more cloud across the four southeast and northern ireland, keeping temperatures above freezing. into thursday, once again, plenty of sunshine, but we will see a bit of cloud, it italy towards the south east of england. more cloud for northern ireland into the south—west scotland. those are the maximum temperatures on thursday, fairly similarto temperatures on thursday, fairly similar to today, 3—7d. thursday night and friday, frost expected. that area of high pressure not really going very far. still going to give settled conditions throughout friday. perhaps more cloud across northern ireland and in scotland. north—western parts of

england throughout the day. not as cold here today, the air coming in from the south. but elsewhere, even with that sunshine across much of england and wales, temperatures only getting up to three or four celsius. into the weekend, that area of high pressure is still with us so still drive for most. varying amounts of sunshine in many parts of the weekend. but again, still fairly chilly with maximum temperatures of 5-7d. chilly with maximum temperatures of 5—7d. goodbye. you're watching bbc news at 9:00am with me, annita mcveigh. the headlines... an above—inflation hike in rail fares of at least 3%, despite a raft of issues on the network in 2018. detained under the mental health act — a man suspected of stabbing three people at a manchester tram stop. a warning that children are exceeding the maximum recommended sugar intake for an adult by the time they are 10. the foreign secretary sets out britain's global role

following brexit in a speech in singapore. could it be you? a uk ticket—holder scoops a £115 million jackpot in the new year's day euromillions draw. and spurs look like title contenders again. their pursuit of liverpool at the top of the premier league is back on, as they return to form.