act between its trade relationship with china and political ties with of course cobra. welcome to the program. china has cut one of its key lending rates in an effort to spur the recovery of the world's 2nd largest economy. china's economy is still growing, but at a slower rate then was previously expected. that's due to worsening. their worsening property slumped, a weak consumer spending and tumbling credit for the country. central bank has now cut one rate while leaving some others on touch. surprising at experts read expected further routine measures george magnus and associate at the china center at oxford university, a welcome to w. what impact is this interest rate current going to have as well? i don't think it's really going to have very much affect the tool really. i mean be the one year rate which was reduced by 15 basis points. it's really sort of a,

an interest started but really entrances the, the rates of which companies bar of the 5 year, right, which they left unchanged would be a rates that affects mortgage. right? so that's $1.00 possibly cuts the additional household demand for mortgage. it isn't for breakfast a potentially, but they decided not to touch that drum drum, that'd be the reason that's being given really what that's being floating around is that the of the people's bank of china was trying to balance. you know, some measures to affect, be able to positively affect the economy with also not wanting to purchase the margins of the banking system which being shrinking. in other words, bank property policy has been declining and they didn't want to caught mortgages. it strikes even further. but i mean, this is really a band aid solution. this is not really going to solve the problem or the problems in china's real estate market. so but, but the,

the idea to try and trying it on it on a monetary way, is that the right way to do it to well, i don't think the problem in the real estate market is because interest rates are too high and people can't afford to borrow, i mean there are other reasons that people, customer or clients and citizens don't really want to borrow money to buy houses at the moment. um, i mean the interest rate reduction will help um, uh, the lee goods, financial situation in some of the big developers like country dogs and some of the other companies that are in trouble. but again, i just want to stress that i think that this is not something, but monetary policy is likely to do anything a general to correct. but then there may be some measures coming on the budgetary side, on the fiscal side, which will help, but we'll have to see what happens. where is the china heading, co,

china. i'd be heading for a liquidity trap here when consumers and investors are holding cash rather than spending as well. yes. kind of, i'm just kind of what's going on. i mean, um, in a way, um, companies have not really part of the company side is i've not really been hiring a lot of people, not spending a lot of money on the investment. mean, the numbers for private investments have been distorted level back to influenced by what's been going on in real estate, which is, is really bad. and sort of outside of real estate. private companies are still investing a bit, but the numbers are pretty weak. households and not really borrowing, and there's been quite a lot of anecdotal stories about households paying off the mortgage is not taking out you mortgages. so confidence is really shots. nobody really wants to kind of step redneck. you're over the power or perhaps i think this is the dangerous,

i mean yes, the people just hold cash sit on cash. don't want to spend, don't want to borrow. this is a situation, but a lot of developed countries have seen, you know, like 10 years ago over lemons and so on, so forth. so, um, well we have to watch this very carefully. georgia magnus from oxford university. thank you for your thoughts. among the numerous countries which have received loans from china and recent years is montenegro. the small country and the south east of europe use the cash to have a highway built and is now facing more than just credit and stones. 41 kilometers in 30 minutes. after 7 years of construction and it 1000000000 the euro spend this road to the mountains of montenegro is ready to be used. it was built by

a chinese company with workers flown in from china. and it was finance for the loan . also from china, close to the highway as great just great from collection to put the lights for the collection is a popular destination for hiker since summer for sky tours and winter ever since the road has been completed. tourism is booming. revenues of 3 folded catalina little ice cream shack. we are connected with other sounds. we have many stories. now. we come here in the shores of time, and i think it's good. motorists have to pay a total of $3.00 euros and $0.50 to use the new highway. but it's hard to imagine that the $1000000000.00 investment will be recouped. that way. natasha collection, which works for a non governmental organization and has been criticizing the project for a while. as she says,

the 41 kilometers stretch is an immense burden. on the country's budget. we have income from the highway, which is a 9000000 of euro's annually. and we have a loan rate, which is for the half of the year, and it's about $14000000.00 euro, so it's obvious that we can cover the loan with what we have. and it's we have to put this remaining money from the budget. another problem, the highway leads to the top i river valley. the river is the unesco world heritage side. it's known for its crystal clear water and green banks. except the highway has destroyed all life and the lower parts of the river. there are no more plants here. the banks have been washed out entirely. tons of excavation material have been deposited here. what's left on the once beautiful environment. rock central left over construction, steel. all the trash as truant, the water, muddy. basically these grey motors coming from different excavations,

but also coming from this, the dump sides which have this flushing of segments. and this is actually went through the spring, the bed, but also by diversity. just, you know, with the covering it over a month to nicholas capital, city of put, go eat so no one seems to be in charge. no one's answering questions. and then the 41 kilometer highway comes to a southern end. china has offered to extend another loan to keep building, but the government found that too risky. they know if they only missed one payment badging has the right to confiscate state property. the leaders of the so called bricks, nations, brazil, russia, india, and china are gathering in south africa. this week the meeting could see an expansion of the block and move favored by china and russia, and their attempt to give the group a bigger global clout. meanwhile, whole south africa needs to manage a delicate balancing act,

maintaining its trade relationship with china. without alienating europe and the united states. the 15th annual bricks meeting will not have rushes vladimir putin in attendance, photographer seed. lucy, sou costa regret said he will not get him in front of his lens. he would have welcomed him with open arms, looking at the great media and as opposed to his decision of not coming to the bridge, suddenly takes it up like that. and i think is best for me to also support that which is a great, a lot of. so the, in africa as a whole, while putting may be popular in a some, the russia connection, rooted in the governing african national congress has historical relationship with the ussr during the struggle against apartheid is causing some serious diplomatic headaches. russian trade is now seen as being prioritized over other bigger partners. we large team explore to russian manganese

and that's about a $150000000.00 us dollars worth of trade. and we import from the mostly central hole in wheat. but on balance, we seem to be trading with equal amounts, but on, in terms of the size of the overall trade boss, good. russia contributes a bunch, 0.254 for overall uh, export boss. good. africa's most developed economy relies heavily on the us and china. it's 2 biggest trading partners and they're ongoing support for russia threaten south africa's post cove at economic recovery. the balancing act for salt i forgot the moment is to maintain and deepen is trades relationship with china as a 2nd, all just trading partner, the 2nd largest global economy at the same time, not alienate america and europeans who have been our historic trading

partners over what is now the russian fact. small and medium sized south african businesses rely on free and open trade. one of them is solar supplier i g e n. so in the next few coming from china, anything that could threaten trade has many here worried how these are all that way . speaking we look at the assembly youth, i'm beatrice. and because we do not have the strongest got and see if this is dr. frontage to have with china, in terms of the basic sales that didn't post edited. lucas with this allows us to create more jobs to grow our skills and to improve i couldn't in the country marred by any quality, growth and job creation are a priority on everyone's mind. as the brick stomach kicks off in johannesburg. and finally, as tensions grow across the strait of taiwan, the latest sign of fruits diplomacy, china is suspended. the import of taiwanese mangles. china says they found really

bug pests and the food itself full. taiwan believes it was because of worsening political ties. following the re send us stop overs by typing these vice president volume lights, the band follow similar orders by raising over the past 2 years against imports of ty, when is pineapple pineapples lacks office citrus fruits and some c. and he has a reminder of our business top story at this hour. china has cut one of his key lending rates and then efforts for the recovery of his worlds 2nd largest economy. that's on the back of a slow down through during the worsening property slumped re consumer spending and tumbling credit. that's our show for more check out our website at www. dot. com slash business. i'm just coburn berlin for me and the entire team. thanks for watching. a very successful the

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