anna: the shanghai sinks. stocks decline the most in three weeks. germany reintroduces controlled border with austria as they meet for an emergency summit on migration. jeremy corbyn appoints fellow hard left leader as shadow chancellor. welcome to countdown. this is countdown from london here on bloomberg television. it is just 6:00 a.m. here in

london. i have a chart here of the shanghai composite index from the last three days. it shows the weakness coming from the asian session. around this china story. industrial output is below estimates. all of that initially got the market thinking that maybe the chinese government will give more stimulus. but that be a good thing? we are now seeing some weakness coming through. it is moving a little bit lower, the shanghai composite. let's put that into context. what does that mean for the rest of the asian trading day. let's get to asia. a precipitous drop here. you showed the charge. here it is again. here is the shanghai composite. check this out. a 3% drop and it has played out over the morning. over two hours this point. we started the day higher on the

shanghai composite and in hong kong which was at one point leading gains across the asia-pacific. as investors noted the latest industrial output figure, what we realized is that this picture in china is not as strong as some may think. -- thatweakening weakening trend is continuing. it is having an impact on most of the asian that most of the major market in the region. that most of the major markets in the region. thailand, vietnam, as well as singapore. we are now extending declines in shanghai. ..6% the biggest drop in three weeks. the concern here is the conundrum facing policymakers in china. they have done a lot to stimulate the economy. currently, the stock market --will it be enough in the end? that is what investors are asking. let's look at the hang seng. these are your movers. you're seeing in shores --

insurers doing well. entertainment is not doing well. on the nikkei 225, telecom stocks are very active in japan today. the big six line and mobile providers are all falling. check out softbank. defined as much as nearly 9% as prime minister shinzo oblique says he would like to reform the system there. the customers in japan pay too much relative to their asia-pacific neighbors. that of course would have a certain impact through the prophets of these companies. the big focus is china and let us not forget federal reserve coming down the pike. bank of japan tomorrow. a busy week. data out of china reveals that the economy could still be growing slower than the government target of 7%.

industrial output missed forecast on sunday. that is raising the prospect for even more stimulus from the chinese authorities as they try to cushion the slowdown in the world tech it biggest economy. -- in the world's second-biggest economy. what does all of this data reveal then about the question of whether we will get more stimulus from the chinese government? >> there are a couple of things going on here. the data that came in over the weekend, all missed analysts estimates which suggests that analysts are still overestimating the strength of the chinese economy right now. when you drill down into some of those numbers, the evidence is even more discouraging. industrial output, 6.1%. it was skewed by very low numbers last year. that bob is less than it appeared. inflation data from last week's you might hide pork and food prices. that there is

gathering evidence that the economy is worse off than it seems to bloomberg gdp tracker puts growth at 6.6% for august. well below the government's forecast of 7%. that would seem to add to the case for broader stimulus measures in the weeks to come. anna: in terms of the actions that the government has already taken, we had more details over the weekend regarding reforms. significanty are and others think less so. how significant are these reforms? >> there is no question that the government is determined to overhaul as oe. to -- soe. and sell stakes or reduce the oe's. of as the challenge there is that the government is again trying to balance between wanting to maintain control over the soe

and giving the communist party of a lot of control or allowing the market to play a greater role. that is the parties challenge writ large. it is unclear whether it will be able to manage that transition. let's get back to europe now. germany has restored control along the border with austria. in an attempt to manage the flow of refugees. the move effectively suspends allowss agreements which free travel through the 26 european countries. hasthis moment, germany's introduced temporary border checks again at the internal frontiers. the focus in the first instance will be at the border with austria. the aim of this measure is to

limit the current influx to germany and to come back to an ordered procedure of that entry again. this is necessary also for safety reasons. anna: let's go to our international correspondent hans nichols who is in berlin. his germany regretting its decision to take 800,000 refugees? that question was being asked over the weekend. hans: many in angela merkel's party over the weekend started to be more critical of her initial decision to extend the dublin of court and allow that temporary measure him because they think it sent the wrong signal. what we had this morning is trains were started -- were expected to resume. the border will be controlled at the austrian-germany order. sending a signal to the rest of your. letting them know that the .urrent situation cannot go on

about the breaking point here in germany. yesterday, i visited some of the temporary spots here in berlin where they do have some setups going up and it is remarkable what a breaking point germany as that. they are converting sports halls. they are using empty soccer fields. here's the situation. the hungarian premier has praised germany's move in an interview saying it is an important first step and he is waiting to see more. the austrian chancellor said we will continue to coordinate closely with germany to achieve an orderly situation as planned. the refugees should not be the ones of suffering from the measures and they should not lead to chaos. the numbers are staggering. orsaturday, 12,000 refugees migrants arriving here in germany. into toand more coming

austria. some of the expectations were for 20,000 to arrive this weekend alone. very difficult for the infrastructure to handle all of this. at the same time, we had another sad reminder of how difficult this journey is off of the coast of greece in the aegean. ae greek coast guard found capsized ship. 34 bodies were recovered, 50 were children. anna: -- 15 were children. anna: we saw some protests in london. over the weekend. europeanhe broader question, the eu interior ministers are meeting later today to finalize resettlement plans. hans: we do not know if they are going to agree to an additional 120 thousand. 40,000 is where they think they are at. these are mostly the refugees that are currently in hungary, italy, and greece. number would put you up over 160 thousand.

there is not a single politician that will tell you it is adequate. there need to be higher numbers. recognition in germany that more resources need to be put on securing the border. actually having decent border control and then you can figure out how you are going to resettle the ones that are already there. this is a process that is going to get worse in large part. this is a criticism internally of merkel because she sent that message to the camps that germany is open for business and that will accelerate the flow of immigrants. that brings us to our twitter question today. will the agreement provide for the refugee crisis? germany has put that border control into place with austria. us on twitter.th back to the data and

what we can expect today in today's trading environment. this is what is coming up later. before we get to any of the data, let's tell you once again that we have that eu emergency summit on migration. that starts at 2:00 p.m. u.k. time. that is on the radar here in europe. we will get euro area industrial production numbers at 10:00 a.m.. pmi for manufacturing has been over 50's for the past six months here in europe. in terms of the greek collections, let's focus on that for a moment. they are campaigning and entering their last week. tsipras and opposition candidates are facing off in a tv debate tonight. you may want to tune in for that. also coming up, i head of the frankfurt motor show, we take -- with the volkswagen leader. it is said week also.

one said watcher is calling the chances of a rate rise on thursday to close to call. >> a domestic case for raging rates -- raising rates is solid. they should have moved when both the domestic and international elements were aligned. they did not. and now, they have a tug-of-war. the domestic case remain strong but the international case is flashing yellow. telling them to be careful. that is why it is such a hard call. ♪

along, to asksaid all ourselves honestly are we the best owners of the financial times for the long term. anna: that was pearson's ceo.

we will bring you more from that interview later in the show. it is quarter past 6:00 here in london. here are the stories you need to know. data out of china this weekend economic slowdown is deepening. --ustrial output missed increased at the slowest pace since 2000. the government also announced some details it plans. controlsas reinstated on its border with austria for the first time in 20 years. it tries to cope with the influx. a system that allows people to travel through the european countries without quarter checks or visas. european ministers meet in brussels later today to discuss the eu proposal for resettling refugees. jeremy corbyn has finalize the details of his team.

fellow hard left-winger john mcdonald has been appointed shadow chancellor. angela eagle is that shadow business secretary while defeated leadership candidates is shadow home secretary. are days away from the federal reserve's most critical policy decision in years. wall street's opinion makers are divided on what the fallout of any move might be. or if any rate rise will even happen. here is what some of our guess of insane. >> the domestic case for raising rates has been solid. it has been for a while. >> we are not in a recession yet. the vector is in the wrong direction. that is unusual. >> we need to hike rates. effectively in the end zone and these clouds are sitting there debating whether or not we should let -- >> i have a lot of trouble with this idea -- let's do it now and then we will hold our breath and

leave everyone. >> let's try something different. >> in a world where there is no inflation, it seems to me that the idea that you would hike interest rates just because they are low and that worries us does not seem compelling. remainedmestic case strong but the international cases flashing yellow telling them to be careful. that is why it is such a hard call. >> if you don't know that you have room to raise it for a while, why are you starting now. i am lost at the strategy. more let's get some opinions peter peter is with us. good morning. great to see you. is that collection of voices told us anything is that there is little consensus about what the fed should do and the implications -- and what the implications should be. despite what the fed talks , you would think there

would be some consensus over what is happening on thursday. as you say, there is no consensus. economists are very divided as to whether or not we will get a rate hike. anna: what do you think? feeling is that obviously central banks want to raise interest rates. the fed wants to raise interest rates. they have been at zero for so long. the question is whether the conditions are right for interest rates to be increased. i do not think they are. there is plenty of economic data out there which is still extremely weak. i tried to look at things in a simple way and if you look at indicator for the global output gap. this is a measure of the extent to which the economy is

operating at full capacity or not. it is still actually operating well below capacity. this is at a level where you would not normally get any typing of monetary policy. anna: that is a global view. what the global economy is telling us is right for interest rate. >> that is true. and maybe the u.s. is at a slightly more advanced stage of its business cycle than other parts of the world. there is still plenty of indicators in the u.s. that are still quite weak. unemployment has fallen a long way. it is not nearly as low as it can get. inflationary pressures are still quite weak. and there is another point to make which is that we of already had an effective -- a

significant and effective tightening because of the end of qe. this is something that i saw that none of the economists picked up on. at the end of qe has been an tightening. and economists in new zealand has done a lot of work on this and his -- and he has been able to quantify the change in interest rates. effective interest rates as a result of ending qe. we have already had an increase in five percentage points in the interest rates in the u.s. from minus five 20. there has been some tightening in the rate market. >> there has already been some tightening so i think we need to sit back and assess the impacts of that tightening. before central banks get carried

away with actual interest rates. anna: a number of central banks are deciding. not just the fed. how strong is the underlying u.s. economy? you mentioned some of the weak spots. in your notes, you talk about murphy's law and how things that can go wrong will go wrong. your application of that to the u.s. economy. >> i suppose that we have a strengthening, a big strengthening in the u.s. dollar. that is in addition to the end of qe, that is also a serious tightening of monetary policy. law, i amf murphy's not quite sure how that applies to the u.s. there is one question i ask in my recent investment letter which is can this fall in equity markets cause a weakness in the broader economy.

on the basis that i do not think that this fall in markets is the start of a pair -- bear market. that is a key point to make right now. i do not see this recent market volatility as being the start of something more serious. anna: a time to get more invested in equity markets? >> yes. anna: where does that reinvestment take you? away from emerging market? more towards europe? >> we are underweight in the u.s. at the moment. because we are particularly negative on the u.s. but more because we see some interesting opportunities elsewhere. that mainly being europe. potentialn enormous in europe for the recovery to continue. at a much earlier

stage of the economic recovery than other parts of the world. unemployment in europe is still extremely high. that tells you one thing, there is still much further to go. and also that monetary policy in europe is going to remain extremely loose for much longer. anna: does that tightening matter in europe for that investment case? >> which would be good for the european equities if not the currency. i don't know what the short-term implications -- i don't think anyone knows what the short-term implications are going to be if the rate rises in the u.s. another point to mention which is technical at the fed fund rates are the rates at which commercial banks borrow excess reserves from each other. reserves held with the central bank. right now, because of qe, actual reserves are much higher than

required reserves. commercial banks do not need to borrow from each other. they do not need to borrow and then the fed funds rate is completely meaningless. i do not think anyone has picked up on that. every economists that i've asked does not seem to have an answer for me as to what the point therefore is of an increased. anyone out there that can help me with that -- anna: contact me on twitter. thank you very much. let's return to the migration crisis here in europe. interiorunion and ministers debate proposals today to take in 160 thousand refugees from syria, eritrea, and afghanistan. one of them is the european commission proposal outlined by the president jean-claude juncker. >> the european commission has outlined specific and ambitious plans.

200%.rease of the proposal was first made in may. relocation would apply to those with a clear and urgent need for protection. that applies to syrians, iraqis, and eritreans. take into consideration the country, it's unemployment level, and how many asylum applications it is had in the last watch her years. in the details, that would mean that germany would take the most. an extra 31,000 refugees. malta would take the least. woulding member states get 6000 euros for every refugee they take. germany, hungary, and italy are its looted from those plans. xcluded from those plans. for those of opposing the quote is like the czech republic, a penalty will be in force.

more now on this story as we go through the program. stay with countdown. plenty more on the data out of china as well as what that is doing to equity markets in asia. ♪

welcome back. you're watching countdown. 6:30 a.m. in london. here are the stories you need to know. data output from china this weekend at it to confront the economic slowdown is deepening and raises the prospect of additional angeles industrial output missed expectations. the government also announced some details on how it plans to reform state owned enterprises. germany has reinstated control on its border with austria for the first time in 20 years as they try to cope with the in let's of tens of thousands of asylum-seekers. it is testing the schengen

agreement. a system that allows people to travel through the 26 european countries without quarter checks. there is a meeting later on today in brussels. elected labor party leader jeremy corbyn has finalize the details of his team. john mcdonnell will be the shadow chancellor. angela eagle is the shadow business secretary. defeated leadership candidate, andy barr number is that shadow ministry. let's get more on the markets now. caroline hyde is standing by. the turmoil that continues in china. once again, this selloff continues. have a look. this is the shanghai composite. coming off of its lows. we are still down by almost 2%. chinese stocks continuing to think. it's tech companies and financial companies. volumes are not as high as we have seen.

they are at half of what we have seen. the amount of shares trading. 45% off of the average. this is equivalent to more than 100 million dollars being wiped from the market valuation this morning. , nine straightks weeks of outflows now. hong kong, chinese stock market has now seen nine straight weeks of outflows. the pain continues when it comes to the stock market. some of the data has not been particularly pretty this weekend. lackluster. when you look at industrial output. it grew at 6.1%. that missed analysts estimates. the slowest pace since 2000. this is adding to the concern that chinese slowdown is upon us. in retail sales, they have been better than expected. an chinese weight is having effect on the commodities market. industrial metals

across-the-board are sinking this morning over concern of the amount of demand that will be lost from the market as china continues to slow. let's have a look at the u.s. as china's woes continue, will the fed raise, is it likely? come september the 17th. it seems that the bets are continuing to fall. theeuro spiking versus dollar. dollar continuing to weaken which signals that many feel that the rate rise is not upon us for september. if you are looking at the fed in the futurist, that is a good way of seeing the probability of what the market thinks regarding the rate hike. 28% seems to be the view that we will see a rate hike come september. most think it crescendos for the end of the year. 50%. let's have a look at sentiment across upon as to where we will see futures open. currently, they are trading higher.

a selloff in china. it looks like we will see a little more risk appetite in the united states. we will see how european futures trade and about half hour. peter is still with us in the studio. let's talk about the commodity seen, the china story. it is all interlinked. data out of china, industrial output coming in weaker than estimates. the latest in a raft of data that has been disappointing from china. i think the first point to mention is that it is absolutely inevitable that the chinese economy was going to slow. it will continue to slow. the reason for that is that it is frontloaded, and the enormous amount of fixed assets

investment over the last couple of decades. embarked on a program to try to build stuff. whether that was infrastructure, roads, ports, gas stations, airports, or residential property, commercial property -- whatever it was, it was about building stuff. it is hard to get an appreciation of the extent to embarking on a one-dimensional program of growth. one indication of that is the consumption of cement. in china. the consumption of cement in per person00 tons per year. to put that into context, the higher that the u.s. ever got to was 400 tons per person. that is four times higher. the second country, korea, the debt 1300.

at 1600. another great statistic is that from 2011 until 2013, china consumed more cement than the u.s. did in the entire 20th century. anna: i have a turn here of the chinese composite over five years and it shows very clearly the spike and then the subsequent selling. if we are looking at cement consumption -- >> you would now see cement consumption falling. you would see steel consumption falling. commodities that are very interlinked with building stuff. gore is still a long way to in that whole cycle. you are going to continue to see a lot of these economic indicators showing weakness, probably for a number of months or even years. anna: and with that commodity cycle, are we looking for signs

that china wants to can -- wants to consume more or that producers will cut production to give us some stability? last week, we were talking about finding a bottom to the copper price. do you see any merit in that type of conversation? are we bottoming out in any commodity? >> i suspect the answer is no. before, there has been so much investment in china that it will take a long time to get back to what you might consider to be a normal level of consumption. try to with china is to get some idea of whether they are going to be able to change their whole economic model away from this desire to build stuff. -- towards in which one that is more related to services, consumption. --a: optus point to the optimists point to the service

sector in china. see a lot of the manager indicators with services are still well above 50. that is a good sign. the state owned enterprise reform is all part of that system and trying to move away , trying tod model build a new model. is final point to mention that you would've thought that if any country is going to be able to succeed in changing the it would be a, command economy like china where they can really just tell people what to do. they can tell companies what to do. they can almost tell people what to do. anna: a real test of that command. peter, thank you for joining us. getting an update into the investigation of the world they

just football governing body. the probe focuses on the awarding of the 2018 and 2022 world cup tournaments. the allocation of media, marketing, and sponsorship rights for tournaments in the u.s. and latin america. we will be at the press conference since york -- zurich later today. a complicated day ahead. >> complicated and cloudy day here. knowrospects for what we or what will come this afternoon are a little cloudy. the swiss press was speculating over the weekend about surely the fact that the u.s. attorney general loretta lynch would not come to town and make a public show at the press conference unless she had something meaningful to announce possibly further arrests. on the other hand, what we are hearing is in the washington

circles, she may have nothing and this may be a show of strength, a public demonstration that she and the swiss attorney general are working well together. and that they are pushing ahead to change fee for -- fifa. anna: how many probes are under way in who are leading them? ofthere are two that we know but they get broken down into sub probes. one is led by the u.s. attorney general into corruption in the sport in general, particularly focused on the shenanigans that have gone on in latin america, the caribbean. and the swiss are leading a separate probe into the awarding of the 2018 and the 2022 world cup. they used the term persons unknown. this with say they are targeting individuals with criminal proceedings but they have not

named anyone at this point. the attorney general over the weekend did an interview and they said that they do have a wide body of people they are looking at but for now, per swiss style, they have not named any of them. anna: thank you very much for joining us. 6:41 a.m. in london. the ceo of pearson which has agreed to sell the financial times has told bloomberg he intends to hold onto the company's final media asset, and when random house until 2017. he had the option to sell his 47% stake in the publisher as early as next month under an agreement with germany's -- which owns the rest. it is unlikely they will pull the are just yet. >> random house is performing exceptionally well. we own 47% of the business, our

joint venture there is bertelsen. we do have an established process and the shareholder agreement whereby we can add shares. >> they said they are interested. thet the moment, we are at point where we have plenty of capital to deploy. penguin random house is performing well. ofare still in the process combining the two operations, particularly in areas like andhousing, distributing, the technology systems worldwide. we are probably a year away from achieving the peak synergies. while it is something that we look at and i would not ruled out in the future, i do not think you should think it is an immediate process. certainly not 2015 and probably not 2016. >> what will it take for you to decide to sell? we are very happy with the

performance of the business. it is doing well. the decision we would make will year of the future earnings against realizing the capital and redeploying our education business. what is likely to deliver the highest return to our shareholders and grow the business sustainable -- sustainably. anna: coming up on the program, a new dawn for labor. anti-austerity jeremy corbyn was elected the party's leader in a landslide victory. how well will his economic ask our work, we will next guest after the break. ♪

anna: welcome back. you're watching countdown. 646 a.m. in london. you're the stories you need to know. data out of china this week and added to concerns that the economic slowdown is deepening. and raised prospects for additional stimulus.

industrial output missed economist forecasts while investment in the first eight months increased at the slowest pace since 2000. the government also announced some details the plans to reform state owned enterprises. reinstated controls on its border with austria for the first time in 20 years as it tries to cope with the in what's up tens of thousands of asylum-seekers. the moon -- the move risks testing the schengen agreement. without border checks or visas. european ministers meet in brussels later today to discuss eu proposal for resettling refugees. the newly elected you key -- party, jeremy corbyn is finalizing his team. mcdonnell has been appointed chancellor, angela eagle is the shadow business secretary. in his victory speech, dear maid

corbin underscored his campaign promises of more equality for the ok. -- for the u.k.. changed and has grown enormously because of the hopes of so many ordinary people for a different written. a better britain. a more equal britain. they are fed up with the inequality and the injustice the unnecessary poverty. all of those issues have brought people in in a spirit of hope and optimism. i say to the new members of the party, all -- or those that have joined as registered supporters, welcome. welcome to our party. welcome to our movement. has: his economic policy won the backing of some media economist. one of them joins us now. he is from the university of london's school of african and oriental studies are thank you very much for joining us professor. many otherwith

economists put your names to a letter that appeared in the press here in london a few weeks ago in support of his economic plan. what is it about his economic agenda that appeals deal? -- that appeals deal? the main thing is active fiscal policy. underometimes summarized anti-austerity but it is more than that. the key idea is that the fiscal should be used as an instrument to balance the economy and facilitate growth. what broughthat is us together. as opposed to the current governments view in which fiscal policy is directed at closing the deficit. we are not against closing the deficit but we do not see that as a driving force of fiscal policy. fiscal policy should be used to counter the economic cycle.

anna: does that mean more investment in infrastructure? keynes was a great economist. --t is called keynesianism it covers a lot of ground. issue of public investment, yes, all of the people that signed that letter for public investment. our view is this. the purpose of public investment is to raise the economies growth potential. and use current investment as a balancing item to keep us near full capacity. so yes, we are for public investment. question of how it is funded, that is probably one of the more controversial aspects of his policy. quantitative easing for the people is slightly

unfortunate -- politicians must use terms that are understandable to people. rather than economic jargon. would say that what that means investments funding by borrowing from the bank of england as opposed to selling bonds on the bond markets. anna: why not let the private sector get involved in investment? we talked with investors in the insurance industry. they say they want to invest more in the u.k. infrastructure. think the days of public and private partnership investments in infrastructure are over? or do think that is what jeremy corbyn what want for them to be over? not an expert but that will not stop me from commenting. i think they have not been designed very well. i have a number of colleagues that have done studies on these

and i think that they have not been valued for money. is someone could work out a way in which they could be reformed, i for one not be opposed to them but under present circumstances, it would appear that the public out of of anue infrastructure program which is organized through the public sector. anna: use the risks to his economic policy as an economist? to the u.k. economy? the conservative party is talking a lot about the risks that jeremy corbyn poses especially on the economic side. we are i think is that in a very unsettled part of the world economy. there will be a lot of risks. as i am sure you are reporting later today on the chinese economy -- it is slowing down. the european economy remains in stagnation basically. how do you deal with those risks? focus on what is

essentially allegation that spending in and of itself is a dangerous thing -- i think that is very primitive economics. what you spend it on, with a whether you match it with taxation, there are a range of things to be managed. if you manage them well, you can minimize government's contribution to risk but you cannot get rid of risk because there are so many things beyond our control. there should be limits on borrowing. at the moment, it is not something that we need to be terribly concerned about. as you probably know, the rate of inflation is almost zero and someyou can enter that price changes are embodied in quality changes, then what is

actually negative, and therefore, i would say at this moment, one need not be anderned about borrowing contributing to inflation. that is the reason of course why the european central bank is embarking on this huge quantitative easing project which would be far beyond anything that jeremy corbyn or any other british prime minister would have in mind. anna: we'll party scene qe in the ok. qe inhave already seen the u.k.. a good time to talk about your on the u.k.hts economy. we have seen the changes of the weekend in the labour party leadership. where do you see the u.k. economy going at the moment? ways that. is in many

there are comparisons with the u.s. in terms of the extent to which there has been a recovery .n the last five or six years if you look at unemployment in the u.k., unemployment is always a critical measure of the health of any economy, unemployment has tracked with the u.s.. closely. basis, that is why we all know the two central banks that are considering interest-rate hikes at the moment are the fed and the u.k.. anna: on that subject, let's guest to talker about some of these other stories that are of interest. seen rising early in

2016. despite the gyrations in the global economy, it seems that what we have learned from the minutes of the mp meeting last week is that the mpc is shrugging it off. >> we do a monthly service -- a survey on what their outlook is and clearly the outlook is that we will get higher rates in the u.k. sooner rather than later. i think the survey is saying the first quarter of next year, the market is pricing in sometime in the second quarter and not the first. that is the outlook. the mpc has most recently had just one dissenter. from twomments coming of the members seem to be moving toward higher rates as well. --a: can they with sand withstand higher rates? >> there are similarities with

the u.s. in that the u.s. and the u.k. are extremely leveraged economies. there are a lot of mortgaged that's in the u.k. hold that thought. we will return to that in a minute. ♪ .

anna: the shanghai stock climbing the most in three weeks. suspended. germany reintroduces controls along the border with austria as your meets for an emergency summit on migration. corbyn, newly elected member, joins a left-winger. ♪ anna: welcome to "countdown." i am anna edwards. 7:00 in london. let's talk about what has happened in chinese data. over the weekend, we got industrial output data worse

than expected. the rate of growth back to levels since 2000. just remind ourselves. session, we are seeing weakness at the early start of the trading day. whether weak data may mean more stimulus from the chinese government. sign interpreted as a weak of the story coming out of china. context and in around the whole of the asian trading day. zeb eckert is standing by. what do you have for us? news. wish i had better a down day in the asia-pacific index. we will start with shanghai. the start drop earlier in shares. a bit of a rebound in the afternoon. shares are down. down about 3.7%. extending their earlier

decline,. is on the back of these numbers you referenced -- it is on the back of these numbers you reference. investment numbers basically key investment figures and key monthly output figure coming in not as strong as expected, underscoring the weakness in the economy. today, most markets in the weion started higher on bets will see more stimulus from china to counter the slow down which is becoming more complicated by the month. they have to keep in mind of the market and the currency and structural reforms and of course the economy. the latest numbers underscore their challenge. shanghai composite is down. the hang seng, it was the leader in terms of the region, it is down. the key movers. insurers are doing well. ai. some of the casino shares, macau

and utilities are falling. another big story is the japan nikkei 225. some investors, see it as a buying opportunity. we see shares of the mobile companies falling today. all falling as the japanese prime minister said easing the burden imposed by mobile fees on japanese consumers is an important issue. that basically means these companies can see their profitability eroded if customers are charge less for their mobile services. this is what we see a cross of the asia-pacific. austria posting a gain in the currency door well. we will get the latest rba minutes tomorrow. the bank of japan beginning its meeting. will be outoda

there and of course we look ahead to the fed. a busy way. anna: thank you. zeb eckert joining us. as he was suggesting, data out of china reveals the economy is still growing or could be slowing slower than the target of 7%. that is raising prospects for more stimulus from chinese authorities as they try to cushion the slow down and the world's second-biggest largest economy. by.is standing what does the latest data out of china over the weekend, what does it tell us about the likelihood of more stimulus? reporter: it certainly does to deploysure on them is some form of stimulus. the discouraging thing is if you look at the numbers, they are bad but if you drill down, they are worse. the output data is skewed because last year's print was

quite poor. inflation numbers over last week that looked encouraging effort were largely skewed by large pork investable prices. it looks like the data is even worse than expected and analyst are consistently overestimating the strength of the data. all of the numbers from the weekend were below estimates. it paints a brighter picture that does up the ante for government officials to put the pressure to bring out the bigger guns with more stimulus. anna: we have details about some of the reforms of state owned enterprises that china wants to bring about. how significant are these changes? nick wadhams: well, the premier has seen -- said numerous times they will present ahead with reforms despite the slow down and that would include overhauling the soe's. strong, inefficient,

enterprises with a huge amount of waste that overlap. targeting them is seen as a key avenue. it is emblematic of the broader problems china faces. how do you like the market play a greater role while the communist party tries to maintain its hand? that is a question the government has not been able to resolve. anna: nick wadhams, bloomberg bureau chief in beijing. we are getting breaking news. caroline hyde is standing by with more details of the political situation in australia. caroline: a headline, mike terrible -- malcolm turnbull tonyhe would challenge abbott for leadership. this is seven months after we saw the prime minister having to send off a struggle back in february. concern about his leadership of the government in general and the economy and previous report

earlier today that two cabinet ministers, one malcolm turnbull and judy bishop, had gone to the prime minister, tony abbott, to say he should step aside. we are getting confirmation welcome terrible will run against -- malcolm turnbull will run against tony abbott. this was given seven months ago. the chest to redeem himself to turn around the performance of the government but it seems he is not that popular. is three timesl more popular than tony abbott. interesting whether this old investment banker could indeed be the leader of the liberal party and perhaps oust the current prime minister. the aussie dollar is awful by 0.1%. nothing too dramatic of the reaction of the current headline. you. thank

the refugee crisis in europe. austria said it expects about 20,000 refugees to arrive. meanwhile, germany has restored controls along the border to austria effectively suspending europe's agreement. it should allow free movement euween participating nations. the interior minister spoke on sunday. germany ismoment, introducing border checks again at the internal frontiers. the focus in the first instance will be at the border with austria. the aim of this measure is to limit the current influx to germany and a compact to order proceedings. this is nor -- necessary for safety. our international correspondent, hans nichols. is eu management of the refugee crisis, is a failing?

the view ins germany for many people and coalition government and putting pressure on merkel to change her position. the we have this morning is border, there are controls between austria and germany. they said this morning that have resumed services, all passenger service from germany or austria to germany. is slowing line down. they have disruptions because of refugees, migrants walking on the track. i took a lot of trained last week, disruptions all across germany because they self the loudspeaker people are walking on the tracks. crisis proportions and the numbers themselves do not quite make sense. austria said they expect another 20,000, the estimate was 10,000 today. if these were micro/refugees, if their goal is to go to germany, that will create a humanitarian

situation. a little bit away from munich. numbers for 12,000 arriving in munich on saturday. all across germany, they are putting up makeshift housing and to convert sports hall into temporary housing for refugees. they are getting some support. the announcement by thomas de maiziere. it premiere of hungry said was a move in the right direction. here's what the austrian prime minister said yesterday. he said we will continue to court with a closely with germany to achieve an orderly situation. the refugees should not be the one suffering from the measures. they should not lead to chaos for in some ways, mr. thomas de maiziere and mrs. merkel to shut down the border with austria at least to impose controls was about trying to gain control of the situation in germany. euwas a signal to the ministers who will be meeting in

brussels today, the status quo cannot last and it is broken and something urgently needs to be done. eu interior ministers are meeting later today to finalize resettlement plans. what do we expect the outcome to be? hans: best case scenario to figure out an agreement. and come up with a redistribution plan for another 120,000. 160,000 and they are focusing on those in greece and italy and in hungary. fore numbers are inadequate the new numbers we see flowing into germany. it will not suffice. the debate is shifting because of the facts on the ground are shifting. anna: thank you. they register someillegal immigrants on

day. this is developing very fastbreak hans nichols in berlin. 11 minutes past 7:00. our conversation with peter. cruelly ask you to answer question on the eu economy and did not give you enough time to answer. let's rejoin. i have here on the choice eu inflation rate in the last five or six years. a clear picture downwards. not all because of what happened here but global commodity markets. the question is whether the u.k. can handle a higher interest peter: yes,flation? i suppose what we are talking about is a very small increase in the interest rate which i suppose on the face of it is going to make a huge difference. the question is what happens with the increase after that and the one after that? the first is the

first of a number of increases. we are sitting here six years into interest rates having been at zero thinking that is an awfully long time. edentlly, there is a prec here in the u.s. in the 1930's and 1940's and 1950's, interest rates were practically at the 04 30 years. 30 years. for following the great crash in 1929 and the depression, central-bank, this said -- fed in part on a bond buying scheme and expanded its balance sheet anonymously. it is to the point where, time for an interest rate rise. in 1936, they increase interest rates and tacked on fiscal

policy. the result of that was the 3%nomy contracted in 1937 by and the stock market halved. precedent which is useful in terms of what is going on currently in the u.k. and u.s. we do not have anything else to nt.lly use as preceded a difficult question to answer. anna: not a hurry to normalized? absolutely, we of already had a big tightening monetary policy as a result of central banks stopping balance sheet purchases sprint -- purchases. let's give it time. anna: thank you, peter elston. hisng up --corbyn names cabinet. he assembles his team.

the more controversial appointments after the break. ♪

welcome back to "countdown." anna:welcome back to "countdown." -- anna: welcome back to "countdown." here are the stories you need to know. weekend of china this added to concerns the economic slowdown is deepening their rays prospects for additional stimulus. investment in the first eight months increased at the slowest pace since 2000. the government announced new details of changes state owned enterprises. germany has retaken control of is border with austria for the first time in 20 years as it tries to deal with the influx of migrants. agreement that enabled people to change through 20's is european countries without border checks or visas for european ministers meet today to discuss the proposal. the newly elected labour party

the leader jonathan corbyn has finalize the details of his front team. john mcdonald has been appointed shadow chancellor and angela is the shadow business secretary will defeat a leadership andy berman is shadow home secretary. ukraine's infrastructure minister had the brussels to skies. the countrys open ryan chilcote joins me as we are who is thendre, ukrainian minister for infrastructure. here's joining us from brussels. thank you very much for talking to was pretty you are in brussels talking about open skies but trying to present a case for infrastructure in ukraine. isn't that a hard sell right now would you consider the violence taking place? guest: good morning. yes, one of the reasons why i am

here is to discuss the open sky agreement with the european liberalize thel air market in the country and provide new safety regulations for the country but also to reformsthe substantial we are pushing through in the country. we have launched a massive reform of the sector of the industry and deregulation and the seaport area. been athe country has country of great potential for manyyears and this is the time to realize the potential to become a success story. ryan: we are selling investments and infrastructure in ukraine, what country offers the closest comparison to ukraine out there? why would i want to invest in

ukraine over in that country? well, itvovarskyi: should be a composition of countries. we are talking about the baltic states and poland. a mix of the baltic states and poland. transittry is a great story and could be a great transit story and has the infrastructure, railway infrastructure and very convenient to the eu and the seaports. and unique inland. there is a lot of potential and again, a combination of the baltic states. and given what has happened in the country, the economic hardship, i would say it is the time to jump in and buy assets. market.n the

market, takebuyers us to your top shelf. if there was one investment that you would make in ukraine in infrastructure, you think it is what? andrii pyvovarskyi: seaports. the seaports. --ter bring do you plan ryan: do you plan to sell the ports themselves? : we areyvovarskyi planning to sell the seaport operators. privatization of seaport operators and i hope by the end, it will. anna: what about the real infrastructure? you are restructuring the debt of the rails. how is the process going and when will a deal be announced? andrii pyvovarskyi: the date railroad -- the state railroad is not up to privatization. we plan to liberalize the rail market. the corporatization process of

the entity. we have developed with the european commission a new law was a railway system that will liberalize the market and allow and operators. however, the infrastructure will not be subject to privatization at all. is liberalization will help us significantly improve the technical state of the existing stock and will provide additional -- the railway system. aside, give us the names of some investors that you have been talking to recently. we might not know about that would encourage other investors to browse stomach of the risk. it clearself, make from the outside it looks like a bold investment.

to encourage investors to tiptoe into the ukraine. andrii pyvovarskyi: we are alking about the cargo, adm, number of private equity funds. and a foundation. and one has been in the country for many years. signed anwe understanding with them willing to invest in the port facility in the country that is an additional investment. names thates, global are not afraid of coming to the market because they understand this is the time for anna: thank you for joining us. andrii pyvovarskyi, ukraine's minister of infrastructure. 7:24 a.m. in london. the labour party chose is new leader on saturday. a landslide victory for germany who got- jeremy corbyn,

almost 60% of the vote. he talked about more equality in the u.k.. during this amazing three months, our party has changed. we have grown enormously because of the hopes of so many ordinary people for a different britain, a better britain, a more equal britain, a more do's and britain. they are fed up with the injustice and unnecessary poverty have brought people in. hope and optimism. i say to the new members of the party or those who have joined and register supporters or affiliated supporters, welcome, welcome to our party. welcome to our movement. analysis is you o'donnell. give us your thoughts on what -- of what happens from here.

how likely is it to stay united? he is calling on the labour party to back in. nja: the first thing to notice is high-profile resignations from the bench within hours of his win. one who noticeable was was quite late to leave who said he disagreed and that tells you there are going to be rumblings and conflicts within the later part of the -- labour party. if you look at the appointments, mcdonald asbut john the chancellor, very controversial figure. hard left. it makes corbyn look moderate. anna: what do we know about his policies? svenja o'donnell: in a nutshell, three years ago talked about moving and nationalizing the bank and the railways.

he is a hard left activists. and this likely to raise eyebrows. anna: svenja o'donnell, thank you. we will take a short break. ♪

anna: welcome back to "countdown." here are the stories you need to know this morning. data out of china this weekend added to concerns the economic slowdown is deepening and raised prospects for additional stimulus. and output missed forecast while investment in the first eight months increase at the slowest pace since 2000. the government announced some details of plants to reform state owned enterprises for germany has reinstated controls on its border with oster up for the first time in 20 years as a trust to cope with the influx of

tens of thousands of asylum-seekers. the move testing the so-called is testing- the move the so-called agreement which allows people to move through 26 countries without borders or visas. eu ministers will meet today. katsumi ass named the new president to secede the late ceo. -- president. he will prepare for the new console, code-named nx. an update on trading. progressing and the asian pacific. zeb eckert is standing by. zeb? zeb: a down day for shares in china. investors take money off of the table and certainly a lot of folks on the federal reserve.

outside of china and within china, the economic numbers, investors not liking them. figures on industrial production, factory output for the month of august, get weaker than expected. look at what it has done to the stock market. down for percent. trading sessions friday and today, the stock market is down about 4%. -- down 4%. 's standing original benchmark down 0.3% in the session. the pbl chief economist -- pboc chief economist commenting today on theseminar in seoul chinese you one saying it will be more market determined and a long run and do not need to aid depreciation. interesting comments after the devaluation. a sense of what the chinese fact is doing.- effect

hong kong is growing. latest economic numbers disappoint investors. fixed asset and output for august. weak across-the-board print board. in australia, sever headlines driving the currency. that's because malcolm turnbull said he will challenge tony abbott for the leadership role of the liberal party. in the a major story sydney market is certainly having an impact on the currency. i look after the aussie dollar. this is what you have. it has been holding up will generally given the fact the data out of china has been very disappointing and major trading partners. look at the chart of the aussie cents, it hasu.s. reversed course. a strong session added the open.

the currency will will want to follow. in japan, telecom shares have been big movers today driving the original benchmark it lower because of the japanese prime minister said he wants to take a closer look at pricing how consumers are built by the -- billed by the big mobile companies. down in the tokyo share market. beging lower as we another trading week. china and everybody's focus today. anna: zeb eckert joining us. the european equity markets open up for the first time this week. what are the futures look like. this where we look to open. a patch of green and that may suggest the european equity market will shrug off weakness

we have seen in the asian friday'snd focus on session in the united states. playing catch-up with the u.s. on that. that is the value across the equity markets. world'sthe doors to the first tomorrow. the debut this year include all lighting fast bentley suv and new rolls-royce. richard wright joins us. richard, is it all about luxury this year? richard: the good stuff we are craving. may i say for those on montague who cannot dish out 300,000 euros for the new convertible or suv that will be a little bit more downscaled and a couple more affordable volume models.

these cars are what gives the copinge glamour, also with an influx of thousands of automotive enthusiast, that the town to make sure they do not miss the premier of the shiny, new models. a bit skewed toward the high-end of automotive driving. there will also be stuff for you and i on display. anna: [laughter] let's talk about more accessible vehicles on display at the show. well compared to those bentleys and , als-royce's, bmw 7 series few years ago top of the line. now it is dwarfed. that's the luxury segment, a very popular car. new one.ee a family buyers will want to check , of course.4

audi has done a terrific job in redesigning their cars on the past 2 decades and the sales numbers show that success. a big part of this. uv to name aar s few of those that will draw attention. anna: richard, thank you. richard weiss joining us. stay with us i had of the friend for to motor show. bloomberg will talk explosively. -- stay with us on the frankfurt motor show. china's economic slowdown and the potential for a fed rate hike is weighing on global markets. a few barrel the brunt of it. goldman sachs said of the commerce have been sinking -- up and comers have been sinking. one of the few strategists who actually predict the losses these economies have been

experiencing. great to see you. thank you for coming in. let's top about these acronyms him. bric's. you're not a big fan of investing around acronyms? the first thing is to put them in context. it was first called around economies. goldman if youto want to be fair to goldman the inc call was well called 2003 and i was running a portfolio and i was bullish. the markets were achieved -- cheap. china was going into its most intensive phase of its growth cycle. and they performed well. the problem then everybody competing with each other to bring out more acronyms and it became used as a marketing device is free any original

intellectual rationale was lost and ways to sell funds to investors and as normally about idea when you get spin replacing substance. anna: let's look at how weak it has been. your been pretty bearish against developed world market. you were not quite bearish enough. that isl smith: indeed, the irony. a five-year relative bear market against the u.s. that it is outperformed by a percent in dollar terms -- 80% in dollar towards his i expect it would be. the bear market where it translated into the clients. what happens in china is negative. so why forecast at the start of this year was a 10% fall in absolute terms and now we are down 15% or 16%. you kind of lose the big picture. the outlooks probably further

weakness. certainly if your medium and long-term investor, contrary to what a lot of people are saying, too early. anna: is there anything that united the bric countries anymore? you seem to be worried about government data governance -- governance? john-paul smith: i am obsessed with the government that bores people. governance at a corporate level. the original rationale was over time you would see gdp per capita converging, economic convergence and governance coverages for corporate governance becoming more like the u.s. and the u.k.. the 1990's, everybody was privatizing and deregulating. since the global financial crisis, that process have gone into reverse very sharply area the best illustration in brazil. you can see how it has

really distorted the market and puts in the economy into a downward spiral. if it does not seem to be any immediate end. when i look to the eventual -- individual emerging markets, it is hard to see were governments is improving. you can point to somewhere like india, it is very messy. the stocks with a good governance are at a massive premiums to the rest of the market. the government is trying to do things with the oil company and try to reduce monopolization. that has had a negative effect on the stock market to print some of the big telco which has monopolization. you want equity markets that have attractive valuations with improving governance. i cannot see any and the emerging markets. maybe a couple in the developed universe.

i told you i will be born before too long. [laughter] anna: i am listening. pretty dreary. the picture you paint. john-paul smith: absolutely. rate hikeprospect of by the federal reserve. john-paul smith: if they do it, this the backdrop of deflation. you can see out of china. is strong.y that spreads and to the u.s. through commodity prices and prices of finished goods and psychology as well. unfortunately, a lot of investors are driven by momentum and we saw that with the paper episode two years ago when some of the market got oversold like india in the short term. increasey, if they rates, it could be a short-term buying opportunity. i do not tend to have strong short-term views.

was emerging markets investor should look at on a long-term view. the hike is not the main concern. if they do it against the international backdrop, probably a policy error and one day may be forced to retract. anna: john-paul smith thank you for joining us. on countdown, we hear from a fund manager that said three key elements are unchanged. we talk that and how a greek snap election may play out. that is after a short break. ♪

anna: welcome back. you are watching "countdown." the stories you need to know. data out of china added to concerns the economic slowdown is deepening air rate prospect for additional stimulus. it missed forecast while investment in the first month after the slowest pace since 2000.

the government announced reforming state owned enterprises. germany has reinstated controls on its border with austria for the first time in 20 years as it tries to cope with the influx of tens of thousands of asylum-seekers. , ans testing the agreement agreement that enables people to travel through 26 european countries without border checks or visas. european ministers meet today to discuss eu proposals for resettling refugees. has finalize the details of his team. left winger is shadow -- just minutes away from the start of the european trading day. caroline hyde is here with some of the companies to watch. caroline: a mixed picture painted by futures. trading sometoward

of the stuff located. glencore are seeing record low trading. expect the glencore shares to be on the downside when you're looking at europe. the woes in china and they'll fall copper going to hit at the miner. and credit suisse. strategic plan today. changes see strategic announced particularly involving around capital increase as soon as october. the market is a buzz with the talk of changes to the u.s. private banking business and it could be sold in fact and the reduction am fixed income businesses sprint credit suisse potentially on the open. anna: caroline, thank you. europe's refugee crisis, plans to resettle thousands are expected to be finalize in a meeting of eu interior minister sprint hans nichols is our international correspondent and

tell us what to watch for. tell us what we expect. hans: that expectations are pretty low for this because a telegram from the eastern countries, they are indicating they do not want to accept this refugee program that adds 160,000. their view is it will not devote or support and print they have not said it did that definitively. get 55% qualified majority in brussels to support this plan without the buy-in from the eastern european states? i do not suspect we will get an agreement today but ministers talking in brussels and whatever the latest between that austrian-germany border. train tracks, reports of a are slow down because of people on the tracks. bridget fonda has restored onrvices but -- deutscheb

has restore service. some people trying to test those area -- those. anna: the check premier made an announcement about deploying more police officers. we will watch for developments. thank you, hans nichols. let's talk to an investor ahead of the start of this week's trading. a fund manager joyce is david, good to have you. a look at the features. -- a fundamental chair joining us, david, good to have you. are we in a holding pattern? david: i expected this week volumes will be relatively low fede wait for the announcement and everybody will watch for what is happening in china. that news is probably going to move toward what happens in the thed later.

banks tryingtral to russell weston make assumptions about where commodity prices goal. a key influence. -- also to bring trying to make assumptions about where commodity prices go. david jane: a degree worst to come. in many ways a long cycle industry and we saw the huge chinese up cycle. a huge, long cycle on the downside. if you look for bottom in this cycle, you will see a lot more dramatic down. companies in at europe. which was do you like? look at the pharmaceuticals and beverage and tobacco companies. those kind of areas. anna: is it the yields you like? you have to be confident it will be sustained. david jane: not having to make a call on the economic outlook.

a lot of uncertainty about the rate cycle and what the impact of china will be. let's sit back and the definitive. anna: are you in the camp that set the west will carry on as it was and will see recovery in the eurozone and u.s.? and despite what is happening in china? david jane: that seems to be the way you lean. let's not make the call yet. we do not know how we china will be or the impact on the exporters in the west especially in japan. we will reduce our exposure to japan to reflect that uncertainty. that willdo you think be when the victims of the china slowdown? david jane: one of our long-term not growing it's fast that world gdp. that is coming through strongly in the numbers. where looking at a much more domestic world. anna: what about the u.s.?

if you get involved in companies that benefit from whatever positive trends around the u.s. consumer benefiting and the median term, would you put your money? david jane: absolutely, a clear ongoing trend. consumers and the west benefit from the bad news around commodities or resources. chinese devaluation. it is all good for us consumers in a way. we have been investing in retail companies and the internet service providers. those companies, more expenditures on the internet then in traditional retailing. we are looking in those kind of areas. really beneficiaries of what is going on. anna: the boost to the u.s. ,onsumer, the week oil prices it took a long time to come through. david jane: it is slightly masked by the nature of consumption. historically, when people have a bit more mining, they went to

the shops. morris venture through amazon and google and all of these kind of areas that are not traditional retailers. you've seen a pickup up in home renovation in these areas as well. anna: thank you for joining us. good to talk to you. david jane. 7:54 a.m. in london. let's check in with the john farrell. j -- jonathan: a week end worth of data. we will break down the china moves and a warning from the bank of international and the quarterly report. a quarter past the hour, fed, .ed, fed, and it will dominate will we get the first rate hike since 2006? we have a stronger euro at the

single currency on a seven-day winning streak. later in the show, we will talk politics. a left wing uprising and the labour party. elevated thank you very much. look out for the political agenda and a macro data. -- anna: thank you very much. shaking of the asian session. data means that the be further stimulus from the chinese authorities and people took an optimistic view. as the day has gone on, the picture has changed a little bit and that session is looking pretty negative from the chinese market. in since of whether we go europe, we could see a little positivity. a mix ahead of the fed. ♪

jonathan: good morning and welcome to "on the move." moments away from the start of another week of european trading. let's get straight to your morning brief. the most inks drop three weeks on sluggish output in investment data as the world's second-largest economy. the bank of international settlements warns they are seeing isolated tremors at the release of pressure accumulated over years. schengen under threat. germany reintroduces control. eu ministers will hold a special summit later today. ahead of the open, we are up by about 14 points.

a huge week as we look ahead to the fed. caroline: happy monday, jonathan. it will be once again a week dominated by concern in china. what does it mean for the u.s. in terms of potential fed rate hike? let's have a look at where we are opening up this morning. basicallyed picture, slacked on the 5100. a little bit of caution -- up a 10th of a percent. it is the overall selloff we are seeing in china that is slumped. we are seeing a 3% drop of the shanghai composite and we will be getting over to asia shortly. that is about $80 billion wiped off the market valuation of the shanghai composite. what does this mean for growth when you see the numbers and industrial output, investment? dax opens 1/10 of percent lower. there will be in effect on the rest of the market.