welcome to "street signs." i'm joumanna bercetche >> i'm willem marx here are your headlines. the trade bounce fades in europe after equities open lower but asian stocks rallied on washington's decision to delay some tariffs on chinese mports german gdp shrinks in the second quarter the ten-year bund yield is at a fresh record low. italy's senate shoots down mateo salvini's push for a swift

no confidence blow delaying the blow for early elections and a calmer day in hong kong the airport reopens after police clashed with riot protests late in the night good morning. one of the big stories this morning, the trump administration overnight has announced a surprise delay to the implementation of new tariffs on chinese impoexports i december 16th. >> but tariffs on meat, watches,

flat screen tvs will go ahead on the 1st of september robert lighthizer says his office will exempt other unspecified products that relate to health, safety and national security concerns. on the back of that, we saw a big bounce in wall street. that continued into the asian session. the mood in europe is not so pretty with most majors trading in negative territory. overnight, in addition to the news about the tariffs being postponed until december, we had weak data coming out of china. that is affecting some sentiment in europe, even before we got that second quarter gdp printout of germany all eyes on the german index the xetra dax is down 0.3% second quarter gdp came in at negative 0.1%. on the back of that, autos, basic resources are coming under selling pressure this morning

which explains why there is red on the board the ftse mib is down 0.66%. it looks like the no confidence vote will go on september 16th let's turn and talk about the price action in asia here you have two stories playing out. you have the relatively good news, that the tariffs on some parts of chinese exports will be delayed until december that was a positive boost for wall street and some particular sectors in china we also had weak macro data overnight. industrial production came in at a 17-year low. fixed asset investment weaker than expectations. retail sales also weaker so we're seeing a muted recovery in chinese stocks. shanghai up 0.4% shenzhen up about 0.7%

bear in mind, in addition to everything we're talking about in the macro space, we get a bunch of tech company earnings coming out of shenzhen we had jd.com earnings, also looking out for tencent earnings today. hang seng also recovering a bit. it's been a tumultuous couple of days for the hong kong index >> you mentioned the bounce in wall street. let's talk about that in more detail after two down days, all three indices opened and closed higher in terms of what happened in specific sectors really interesting to talk about tech when we have seen these massive beats, this is one of the best days in two months for the doi when you talk about some numbers here, apple stock up 4.23% it's best performance since early may in terms of the sector, semiconductors helping to boost it. you can see why this had such a big impact because of the weighting on the overall sectors. eunice yoon has more details about those tariff delays.

>> the trump administration has decided to exempt or delay 10% tariffs that were supposed to hit 3$300 billion worth of good on september 1st the u.s. commerce department said that products to be exempt would be in health, safety and national security. tariffs would be delayed until december 15th on cell phones video game consoles and certain toys if that sounds like christmas wish list, there's a reason. president trump today this to reporters. >> the only thing is we've collected $60 billion from china, but just in case they might have an impact on people, what we've done is delayed it so that they won't be relevant to the christmas shopping season. >> the top trade nergotiators ha a phone conversation yesterday and are expected to have another chat in two weeks ahead of a planned face-to-face meeting in september in the u.s to beijing the signal was that

the delay would only reinforce their approach to wait for a more favorable situation data out today missed, factory output for july was the slowsest since 2002 retail sales sank. fixed asset investment, a gauge forever construction activity fell the economy faces increasing downward pressure, but believes policy measures will show effect and that the impact of the trade war is controllable. we're joined by louise dudley, a global equities portfolio manager. thank you very much for being with us. president trump has repeatedly said the u.s. treasury is making billions of dollars from china thanks to these tariffs. this delay, it is not just a blatanted admission that u.s. consumers have been feeling the heat and will feel the heat from

these tariffs? >> i think for the first time he has admitted that as a statement. the fact that he pulled back tariffs on some items and not others appears he's softening a bit, but aligned to his usual stance of going in hard and putting things back and trying to weigh on what sentiment is back home in the u.s., given next year's election coming up >> this all leads to volatility for the indefinite future? >> volatility, uncertainty for businesses we're already seeing pulling back in terms of the fixed asset investment because of that businesses if they don't know what they're doing or changing on a day-to-day basis, they say let's look at the probabilities, let's pull back on some of those decisions, let's wait and see what will happen >> i will challenge willem on that you say it will create more uncertainty. the timing has been pushed back, but also doesn't this, to your point, say that president

trump's pain threshold is lower than the market had thought it would be in the sense that he understands now that consumers will be paying a price we have an election coming up next year, and the likelihood of another round of tariffs being applied in december also has gone down. that removes some uncertainty about the forward looking path that we could get to and how bad this trade war could get between the u.s. and china >> when we have the 10% tariffs, a lot of people along the chain were saying we can talk about those relationships. we can try and take on some of those tariffs, and therefore the consumer doesn't get impacted. actually at the 25% level that's not really possible. so therefore they're starting to strain those business relationships across the chain and people will be suffering, and those companies are starting to feel the heat on that >> yet again, taking it back to the u.s. economy, the big fear is that this would get to

another round of escalation between the two sides, another round of tariffs which would take a hit to the u.s. economy, even some analysts were out there saying if we do go ahead and see another 3$300 billion worth of tariffs on chinese imports that could send the u.s. into recession now that threat is less imminent, isn't that good news for the u.s. economy and therefore also good news for companies? one reason why we saw the stock market bounce yesterday? >> that's true one thing people are talking about is will this bring china back to the table and will there be -- we had calls from industry bodies that that will bring people back to the negotiating table and they need to have a more stable pathway of how they'll resolve this issue >> are there specific company yourself looking at and thinking i don't like the way the balance sheet has developed over the last, let's say, 12 months since this trade war kicked off, and that you're now thinking we need

to stay away from? >> certainly one of the metrics we look at is balance sheet strength we look for those companies that do have that quality bias to a certain extent as we see the ability of companies to not sustain themselves in the next two years, if this is a more protracted discussion on trade wars, those that are not going to be able to ride that out won't benefit. certainly we're seeing that with some companies where people are moving more into larger cap names, smaller cap and starting to get worried and maybe some m&a opportunities for bigger names >> we'll leave it there. i want to take you to the latest developments in hong sonkong the hong kong affairs office has condemned the near terrorism actions of pro democracy

demonstrators who clashed with police at hong kong airports flights s s have resumed from t airport. chery kang is live in hong kong with the latest details. it appears as though things have calmed down somewhat this afternoon. can you give us more color on the developments over the last 24 hours >> so 24 hours ago and 48 hours ago we certainly saw protesters really building up on their presence here at the hong kong international airport. that is monday and tuesday but this wednesday things are certainly looking different. perhaps it's really yesterday's clash that we've been talking about. the violent footage of clashes between hong kong protesters and riot police. this is the first time i think that riot police have been deployed to the airport since the protests began since protesters, you know,

started their sit-in since last friday and there was this -- also this injunction that airport authority has secured this morning. so it's really about airport authorities wanting to take a ramped up response to make sure their airport operations are not disrupted anymore. and of course the airport is pick up pieces, catching up on some lost business we see some cancellations. perhaps there's a knock-on effect of two straight days of major disruptions. but things are mostly back on track. in terms of the presence that we're seeing of protesters, we still see dozens of anti-government protesters, really staying out here, you know, greeting international travelers at the arrival hall with their messages about hong kong police and their behavior, that protesters feel, you know,

is using excessive force in the meantime, as you were talking about there, beijing's response is certainly a critical point that we need to be watching and certainly we see that chinese authorities as well as state-run media in the country ramping up their coverage and their reaction to what's been happening here interesting, guys, that we see businesses responding to this and sort of having to choose a side as well one good example would be swiar pacific saying they support the government's central vision of china. back to you. >> chery kang, thank you. coming up, europe's largest economy shrinks as the german export engine stutters stay with us

take prilosec otc and take control of heartburn. so you don't have to stash antacids here... here... or, here. kick your antacid habit with prilosec otc. one pill a day, 24 hours, zero heartburn.

italy's senate delayed a no confidence vote in the coalition government and frustrated mateo salvini's efforts to call for quick and early elections. critics say vsalvini demanded te vote to capitalize on his

party's surging popularity in the polls. on august 20th giuseppe conte will address parliament. claudia is in milan. political shenanigans in italy are nothing new. why does this latest incident matter for the economy and business environment >> let's start from the fact there's a timing issue it hasn't happened since 1919 that italy goes to the elections in the fall. there's the budget issue, so of course this is an important time of the year for italy if elections were to be held then and if a changing government were to be responsible for making the budget, that would clearly put the responsibility of what discussions will be held with the eu with the new government would have been probably not even ready to go and actually do the budget so it's just a critical time of

the year to be doing this. what would this mean first of all, as you were saying, the reason that salvini wants to go to these elections is because he can capitalize on the strong support he has now. the other part of this governing coalition, the five-star movement is scrambling to try to find a way to stay in power. what this could come by is with some sort of a deal with the pd, the opposing party the pd has its own issues. it is facing its own identify crisis the leader has sort of has half of the pd, while the other half is more under renzi, the prime minister who stepped down in 2016 so it's not clear who or which part of the pd the five-star movement could actually align with but all of this is really just hypotheses because until the 20th of august we won't know if this will happen

between now and then other issues may come up conte on the 20th is expected to go for the no confidence vote. sergio mattarella could ask conte to try to form another coalition, that would mean this coalition would be putting out the budget but the concern lastly is from an economic standpoint, as far as markets are concerned, the spread could be a big issue. that could mean our debt could cost more and more to finance. though for now, for the time being, the spread is at levels higher than last week but not at concerning levels. really it will depend on how the market perceives how this goes forward. whether this becomes an actual crisis that affects markets or not. definitely we're in for, as you were saying, shenanigans that are always complex and we need to be cautious and take it sort of day by day. back to you. >> thanks for that as you mentioned, ftse mib is

down 0.23 today in trading i want to take you to germany where the economy shrank in the second quarter preliminary data has shown flash gdp fell 0.1% from the first quarter as weaker foreign demand weighed on the country's exports. the annual growth rate slowed to 0.4% in the second quarter but still beat expectations. annet annette weisbach joins us from germany. is germany on the cusp after recession here >> yes that's what most economists are saying if you look at the other data, industrial production was weak interestingly, even though investors were asked if you correlated against gdp growth, it has a forward indication of,

like, three quarters, and then it also eventually hits the hard data so essentially it does not underestimate when it comes to predicting the german economy growth activity in the future. many economists are saying -- this is quite clear -- that the second half year will be weak. the reasons why german economy is so weak especially trade and the uncertainty looming from brexit they are most likely not going away easily. if they're going away like trade, they have done a lot of damage which we are currently already witnessing when you look at the earnings of the corporates in germany. trade is a super issue for the german economic activity going forward. let's look at what the statistical office is saying there are also stabilizing factors. consumer demand is holding up and is stabilizing and consumption from the government is a stabilizing factor already

in the second quarter. many people, especially from outside germany are calling for more fiscal spending in germany. as of now, chancellor americaal is saying there's no need to do so looking at the healthy lane market but that could change also the labor market is showing signs of weaknesses. recent data suggesting there is not a lot of job creation anymore in germany back to you. >> louise dudley from hermes investment management is with us you are a global equities manager. looking at the data that has come out of germany today, the powerhouse of the eurozone is faltering. how does that change your perception of where you want to put your money in the next six months or so >> we had an overweight to the u.s. in -- for the last 18

months or so that kind of short-term positioning has not changed. the interesting thing is whether this will lead to a genuine contraction or are businesses currently renegotiating europe/china relationships given that china/u.s. relations are faltering. will we see greater trade coming through the euro/china area and the rest of asia which is benefitting from china/u.s. not happening so much. they're spending more time having relations with india, with malaysia in terms of trying to offsocieet system of those u.s./china weaknesses. >> germany exposed to trade tensions given the german government predicting 1.5% growth next year still, today's numbers make that almost impossible. even if you have this huge increase in trade between europe and china. >> potentially i think, you know, certainly the

ecb has -- we still have that decision to come wheth whether they'll be supportive, merkel says there will be support if required. maybe that can hold up >> are you optimistic we'll get some physical spending support out of germany >> it's hard to know the consumer spending numbers are still strong though that is a lagged indicator, the point there is still some job growth and good consumer spending, that will support businesses to try and ride out some of these shorter-term uncertainties >> let's leave germany aside how gloomy outside of germany and across europe are people and are they right to be gloomy? >> there's still pockets that are looking quite attractive you know, valuation is always key. maybe taking that slightly longer-term horizon as well.

saying at some point there will be some resolution to these issues companies themselves, where they are continuing to support the economy more broadly, they will -- certainly from our perspective, finding good opportunities across europe, also looking to wider eastern europe, those supporting areas as well. >> we've got a very big september ecb meeting coming up. clearly there's more pressure on the central bank to do something in addition to government is, and the ecb to do something. they're hugely missing on the inflation mandate here are you confident that what the ecb will deliver in september will be sufficient to give markets a short-term boost >> i think certainly there will be reassurance that happens. that's what we tend to see looking back to u.s. and what's happened there, you know, people are saying was 25 basis points enough should they have done more there's always that deliberation but i think within the ecb we tend to get greater agreement

and certainly there is not maybe the political headwinds that we face in the u.s. in terms of that decisionmaking >> the sectors you like now in europe, any specific sectors you're focused on? >> we're quite diversified across sectors certainly we are looking at more defensive sectors, so healthcare also thinking about the currency exposures as well. looking at currencies outside of the euro whether that's the swiss franc or also within the nordic region as well. >> those safe haven currencies have done well the last couple of weeks we'll leave it there louise dudley from hermes investment management. coming up, tencent looks for a revenue boost when it reveals second quarter results today what to expect from earnings is coming up next

♪ ♪ applebee's handcrafted burgers now starting at $7.99. now that's eatin' good in the neighborhood now starting at $7.99. stop struggling to clean tough messes with sprays. try new clean freak! it has three times the cleaning power to dissolve kitchen grease on contact. it works great on bathtubs. and even stainless steel. try new clean freak from mr. clean.

it's how we care for our patients- like job. his team at ctca treated his cancer and side effects. so job can stay strong for his family. cancer treatment centers of america. appointments available now.

cancer treatment centers of america. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you, prewashing and removing stuck-on foods, the first time. wow, that's clean! cascade platinum. welcome back to "street signs. i'm willem marx. >> i'm joumanna bercetche. these are your headlines the trade bounce fades in europe after equities open lower

and asian stocks rally o washington's decision to delay some tariffs on chinese imports. german gdp shrinks in the second quarter as weak exports weigh on europe's largest economy and lead the ten-year bund yield to a new fresh record low. italy's senate shoots down mateo salvini's push for a swift no confidence blow delaying the blow for early elections and a calmer day in hong kong the airport reopens after police clashed with protesters late into the night and the political problems in the autonomous territory rages on just want to bring you some of the latest uk inflation data out here it has unexpectedly overshot the bank of england's target in july we've got core cpi x energy food, energy and tobacco, up for the month, up 1.9% year-on-year.

july is 0.9% month on month. core producer output prices, they're up 0.4% month on month, 2% year-on-year. that's higher than the poll. july producer output prices up 0.3% month on month, 1.8% year-on-year that core reading seen as a better gauge of demand trader also be wondering whether he did demand has dipped doesn't look like it has yesterday we had wage growth stronger, today the cpi numbers are higher than expectations similar to what we had out of the u.s.

the only index trading in the green is the ftse 100. still political murmureri er in the background the big question is what happenings on november 1st all the focus in europe has been on germany the xetra dax is down 0.2% we had the german gdp number come in at negative 0.1% for the quarter. contractionary territory that is the number one story driving this index today on the back of that we're seeing autos and basic resources trade negative cac 40 is also negative as well. ftse mib is down 0.2%. we have confirmation that the no confidence vote in the government will take place on august 20th. again, political developments to watch out for there as well. let's switch and talk about currency markets yesterday avenues that washington were delaying the tariffs until early december was a positive signal to u.s. equity

markets, and positive for the dollar as well so we saw a bid for the greenback overnight. today that is softening. euro trading firmer versus dollar to the tune of about 0.10%. still stable dollar/yen, we're seeing a bid for the yen currency to the tune of about a third of a percentage point. interesting even though we had a better session for asian equities overnight cable is hanging around 1.2060 today the theme is of slight dollar weakness in the early hours of european trading. let's talk about u.s. futures. we had that stronger session for all three majors yesterday with them all ending up north of 1.5% today we have s&p 500, sodow, nasdaq slightly pointing in the red. keep your eye out on the developments between the u.s.

and china. that sent a positive catalyst to the u.s. markets yesterday afternoon. let's talk about asia's recent past. stocks in tokyo rebounded today after the u.s. delayed the imposition of tariffs on some chinese products makiko utsuda joins us from tokyo with more. can you walk us through what you have seen today? >> yes the index fell 1% higher on the back of the announcement by the u.s. that new tariffs on certain items from china including cell phones and laptops will be delayed to december. and the news gave a boost to gamemaker nintendo which rose over 4%. electronic components and semiconductor related makers gained with manufacturing finishing 4% higher. economic sensitive shares such as softbank and retailing were also up. the announcement led to the yen weakening against the dollar and the euro which prompted investors to snap up exporter shares and japan machinery orders seeing a record increase in june

was another welcomed factor for the market orders were up nearly 14% from the previous months. though the sharp increase followed a 7.8% fall in may, the rise was seen as a sign of capital spending picking up. though tensions seem to be easing, investors are wary of the itself china trade negotiations and overall trading volume was limited that's all from the nikkei back to you. >> we want to go to earnings out of china tencent is set to report results later today. the tech giant is expected to post a sizable pick up on year on year revenues thanks to the chinese government's decision earlier this year to lift its freeze on new game approvals tencent's numbers come amid a slew of other tech earnings. on tuesday, jd.com posted a surprise profit and jump in

year-on-year revenue sending shares as much as 8% higher. so while we're talking a lot about the trade war between the u.s. and china, it is worth bearing in mind we had a bunch of corporates reporting as well. arjun joins us now. >> i'll give you a breakdown of what the markets are expecting here in terms of revenue growth. they're looking at a number of 27% growth in terms of net income low 20% growth some sizable growth to come for tencent. but there's a sense that the worst is behind the company. what happened last year was the chinese government completely stopped approving games in china. for any game to be released here in china, it needs to be approved by the government a ndd for it to be monetized it needs to be approved that was the issue for tencent the games couldn't get through and the gaming business accounts

for 20% of the proceeds. so are seeing the positive impacted from that in this q2 earnings and you going the thrg through to the rest of the year. tencent is looking to diversify the business they are look at fintech and cloud and advertising as well. fintech and cloud, one segment they recently begun breaking out numbers for accounts for 25% of revenue. and we're expecting a sizable increase in revenues from that quarter. that relates to the wii chat pay business wii chat is tencent's messaging service in china it has over 1 billion users. it's one of the two big payment apps in china alongside alibaba's alipay

that has been gaining users and traction in terms of the advertising revenue, tencent has been trying to put ads in wii chat, too, in the social media function known as moments adding ads there slowly. there are a few macro head dwin, one of those is a slowdown in chi china, and you have seen the stock act as a proxy for the broader chinese tech sector and be caught up in selling. overall the market is expecting a positive number here, a return back to growth for the gaming division and some promising future businesses, too >> despite all the odds some would say. thank you. to explore tencent and it's possible earnings, karol severin

joins us on the phone. the video games business and advertising are the two main businesses for tencent this company seems somewhat immune to the developments going on in the trade war. is that a right and a fair representation of tencent? >> so the -- good morning. go to speak with you again the question is how much investors, you know, will really need and want tencent to keep diversifying its revenue mix if you look at other tech giants -- i know we're talking about adding ads and cloud revenue, other tech giants look at their corporate flagship revenue much more than tencent, which had games accounting for 33% of revenue if you look at google, apple, facebook, amazon, alibaba, they have significantly higher dependency on the core revenue business model you could argue that tencent is quite well diversified

with regard to their dependenc s on gaming, gaming is a significant part of the business but should no longer be viewed in isolation the overarching narrative should be about how successfully tencent is managing the dynamics of the economy we are in an area where they have allocated the vast majority of entertainment time, so instead of competing for consumers free time, they have to capture allocated time. it's no longer about competing against other games, but competing for consumers allocated time against activities such as video viewing, social media sessions and the wider entertainment and media consumption landscape. tencent is still depending on its games revenues, but the games revenue itself is and will be increasingly dependent on other aspects. >> so you raised some interesting topics here. one other angle is regulation. one reason why tencent got hit

last year was because of the video game freeze within china they now relaxed some of those restrictions is this well and truly out of the way? is there further risk of regulatory hurdles in the future for tencent? >> there are always risks of further regulatory hurdles i would argue as threatening as the implications of this approval freeze seemed to be, we have seen obviously an easing on that already, i will argue that however that blip may have affected short-term sales in the past, it actually helps the likes of tencent in the long-term it very much strengthens the narrative of if you want your games to be approved, your best chance is to partner with one of these companies. this then further decreases the competitive threat of large western publishers and media companies trying to penetrate the chinese market on their own. this gives the likes of tencent a firm defense mechanism in their domestic market.

this is also why it is so important for tencent going forward, looking at new games releases, it's so important for them to make sure that they are prioritizing ongoing engagement with titles that are already out there to essentially defend against any new freezes that may come into place. if they can keep monetizing and keep consumers engaged on their already released titles, that can help defend against that in the future >> let's talk about some of those newly released titles. you play these games, you talk to people who play these games, will these big blockbusters bring in the big bucks when we get the earnings numbers >> the most important thing to watch forever m me around the nw games releases is how much they engage the consumers the true measure is time spent per user

the dalie i daily active user ns are only partially helpful, they don't tell us how much of the digital life is being captured this is something companies are unlikely to disclose in detail because these kpis are likely under pressure these days. so to zoom in on this directionally i will be looking at any information around how ten havencent subscription likel are, like the rebranded ubg season pass, how these are performing and how much they help the overall engagement within the ecosystem tencent is the largest games company in the world today not just because it sells a lot of games content, but also because it has managed to build an all-encompassing entertainment ecosystem. when a gamer decides to end to session and switch to video, tencent has to ensure the consumer does not leave its ecosystem in doing so.

the final important point on the releases would be how do the new releases and content partners p partnerships or any acquisitions, how do they affect the wider engagement strategy across the entertainment formations and the one that i would like to mention is the nba partnership in china they have games, live sport, broadcast and on-demand video content. we have 97.5% nba 2k players listening to music one hour a week, 92% watch videos and 50% watch live sports. all of these compared to the consumer average naturally but they also overindex to the

gaming partner >> karol, thank you very much. one quick corporate story, rwe posted a 20% jump in first half core profit a stronger than expected performance at the power producer training unit boosted results. i'll speak to the cfo, markuk krebber at 11:30 cet coming up you say tomato, i say tomato rethinking the future of farming and using new thmeods to boost tomato production. that's next.

. welcome back we asked dan murphy to look at how one startup is growing tomatoes in an in a different climate. >> this food startup could be the difference in food >> we're in the center aabu

dhabi that is looking to grow fresh produce here >> pure harvest was started in 2016 now the high-tech tomatoes are transforming how and where we grow food. outside temperatures often spike beyond 40 degrees celsius. in here it's like summer in the mediterranean. the greenhouse uses sensors and software to adjust sunlight, temperature and humidity there's no soil or pesticides, just an army of bumble bees and head grower, jans prins. >> the more sun slight, the more sugar in the tomatoes. >> these high quality tomatoes are the first of their kind in the middle east. most importantly they can be produced all year round. and that's opening up a big market opportunity >> 80% of food here is imported because of a lack of farmable

land and extreme temperatures. pure harvest says this sector is ripe for the picking >> how do you get it from the vine to consumers? >> we harvest every single day almost it goes into a back house, we put it into a package. >> reporter: pure harvest says the greenhouse has 10 to 14 times yield per meter of a conventional farm but uses a fraction of the water. now it's ready to test investor appetite, seeking over $20 million in equity to scale the concept to countries like saudi arabia what we have in terms of yield per square meter can be replicated on a larger scale and then we can produce more and do that cost effectively. >> we are mimicking a mediterranean climate in the heart of the abu dhabi desert that hits 53 degrees celsius

the reason i mention that is in that climate corridor we can grow just about anything tomatoes cucumber, strawberries, just about anything. >> reporter: controlled environment agriculture is showing great promise, creating jobs, diversifying economies and helping the region to grow more with less. dan murphy, cnbc, in the abu dhabi desert >> so dan was there visiting just one example of what ubs has dubbed the new agriculture revolution that is transforming how we produce and consume food. the bank insists agriculture is ripe for investment with food innovation set to become a 7$700 million industry by 2030 james purcell joins us now live from zurich. if you had to try to weigh out the challenges facing food producers which would be your greatest concern right now would it be the overpopulation,

changing weather patterns, or would it be changing consumer tastes >> i think the biggest challenge has to be simply the demand. and the demand really comes back down to demographics, the population question. we have about 8 billion people in the world today in the next three decades, that will be 10 million the standards of living means food demand will accelerate far quicker than population growth we expect food demand to increase 60% over the same period that's the biggest challenge >> james, looking at your numbers, you're saying food production accounts for 40% of land use, 30% of greenhouse emissions and 70% of fresh water consumption. bottom line, how can we fix it >> to fix it we need to come at it from multiple angles. innovation can mean how you produce the food, we heard about

controlled production, vertical farming is an extension of that, but you need to get to the heart of the science behind food production the food sector in general has been reluctant to embrace technology if you look at digital penetration and agriculture, it ranks last when we look at it from a sector perspective. less than 1% of all food production can be digitalized. compare that to retail up at 12%. that's a vast gap that is an opportunity to fill in we need to have a technological revolution alongside a food revolution >> who needs to drive these changes? is it much more in the purview of government to do that or is this all about private innovation >> i think most of it comes from the private sector it's all about changing the consumer habits. whether that's to do with health and wellness or sustainability in general and we're seeing it take hold in a number of sub sectors, from that it becomes more and more

mainstream if we take online food delivery, it is understandably and unsurprisingly the younger generation driving that shift on how we con seem food over the last mile. that trend is one that will be replicated through the whole food production channel in terms of how we produce and purchase >> that number of 1% digitalization of agriculture is interesting. i want to listen to your perspective on how blockchain can revolutionize food as well there's a segment in your report that is focused on blockchain and the enhancements that can bring to the world of agriculture. can you give us more color on that >> blockchain has many potentials as consumers get more and more picky over where they want to source food from and how it's produced you need reliable systems in place to be able to trace all the way from farm to

fork blockchain is one of those technologies that has the potential to be the infrastructure that allows to us have that visibility you earn trust and through trust it turns into market demand and driving the sector forward >> all right james, we'll leave it there. thank you very much for taking the time to chat to us interesting discussion there about the food industry and what needs to be done from an innovation perspective make sure you join us at 11:30 cet this morning when we speak to rwe cfo markus krebber. >> our u.s. colleagues will be speaking to wilbur ross later today. no doubt china will be a topic that interview at 14:00 central european time. >> we did see that big bounce in wall street indices after the news of the tariff delay came

out. this morning all three makers are opening slightly in the red. much of the focus is on the respective narrative between the two sides. that is it for our show today. i'm joumanna bercetche >> i'm willem marx "worldwide exchange" will be up in a few moments time. stay with us here at cnbc.

it is 5:00 p.m. at hong kong international airport and 5:00 a.m. at cnbc global headquarters here is your five at five. calm washing over hong kong's main travel hub today after violent clashes between demonstrators and police and travelers. a live update from that region coming up. violence in hong kong. a cooling of u.s./china trade tensions sending wall street on a wild ride. the dow coming off its best two-day stretch in two months. and it could a