25/06/2014 Asia Business Report

Now on BBC News, all the latest business news live from Singapore.

A top Chinese official arrives in Taipei, in another sign of warming

ties between the two sides. And, Indonesia is looking to curb smoking

through a new and graphic warning on cigarette packets. Welcome to Asia

Business Report. China's top official for relations with Taiwan

met in Taipei today for a series of meetings. They do not expect to get

major agreement on the trip but will meet with ordinary people to get a

better understanding about how they feel about the China and Taiwan

relationship. With all of this, will the soft approach help counter

political resistance to China? It depends, he comes on the heels of

major protests in Taiwan, from students who occupied Parliament.

There was that controversial trade deal that Taiwan signed with China.

On the looks of it, the trade agreement looks like it will

benefit. It allows greater access to China's services sector. In many

ways, Taiwan is public are suspicious of China's intentions. He

is facing more suspicion then years ago, when the two sides began

warming relations. The tactic this time is not to meet many politicians

or focus on signing agreements, but talk to ordinary people, including

farmers, villagers, and students and professors. And even visited daycare

and community centre. That is to get a sense of how the Taiwanese people

feel about the relationship with China and how to move forward. As

you say, he is meeting with ordinary people this time around, will that

help get rid of these suspicious feeling is meeting with ordinary

people this time around, will that help get rid of these suspicious

feelings that many Taiwanese people have towards the Chinese? It

depends, `` feelings. He is meeting with parents and children, creating

an image of a softer side of China, something that Beijing is trying to

create an impression of. It is not only unification, unifying with the

islander considers its problems. But to find out what the Taiwanese

people think and learn about Taiwan is democracy. It could help people

have a sense of what Beijing wants `` Taiwan's. What is the reaction so

far to this trip? What other newspapers are saying? It is all

over the newspapers. This is the front page of the China Times, the

headline says that he will get a true sense of how the Taiwanese

people feel. A positive response. On the other hand, another newspaper,

known to be more anti` China, they ran an interview with Hillary

Clinton, warning that if Taiwan becomes too economically independent

on China `` dependent on China, it could diminish political

independence. It also warns of China bringing restrictions on reporters

to Taiwan. It points out the many reporters covering the visit will

have to have a variety of press passes to get access to the various

venues. In other business News, China is reported to be setting up a

global financial institution to rival the World Bank and the Asian

development bank, according to the Financial Times, China believes both

lenders are too influenced by the USA and allies. Beijing is set to

raise $100 billion for its own lender which will be known as the

Asian infrastructure investment bank. The Japanese Prime Minister

Shinzo Abe has unveiled an ambitious package of reforms aimed at

revitalising the economy. That is part of his third arrow of

structural changes. Proposals include cutting corporate tax in

Japan, putting more women into the workforce, and restyling the country

is mothballed nuclear reactors. It isn't often that investors paid

attention to revisions of economic statistics, but when it comes to the

United States, the world 's largest economy, everybody sits up and takes

notice. Much of Asia is dependent on trade with the USA, and on

Wednesday, there will be plenty of people waiting to receive the third

and final reading of those third`quarter growth numbers. ``

those quarterly growth numbers. This man designs and manufactures

children's furniture. In this Brooklyn company, the start of the

year was bleak, orders didn't return after the usual drop after the

holidays. Usually, sales pickup in mid`January, but this year, it took

until April. The US economy shrank in the first three months of the

year, hurting businesses like this. It rose fears that the US recovery

was fading. Some say it is misleading to say that America is

close to recession. It was a surprising slowdown, but it reflects

that in the second half of last year, we saw a pickup in growth,

inevitably, it meant that he had some slowdown at the start of the

year. Even if the optimists are right, and America is bouncing back,

economists from the IMF to Wall Street had been forced to lower

their growth forecast for the year. For many Americans, the report will

feel like it has taken one step forward and two steps back. But,

there are signs that the world 's largest economy is making progress.

Not least because of the improvement in the US labour market. Still, it's

a reminder that the path to recovery does not always follow a straight

line. Staying with the Americas, Mexico is

not a country you tend to hear about in this part of the world, but Latin

America's second`largest economy is now Asian investors to help finance

major projects. Earlier, I spoke to the chief executive of Mexico's

biggest infrastructure bank, and I asked if there had been a lot of

interest. In the last three years, we have been coming to China, South

Korea, and also Japan, and this is the first time that we came to

Singapore, because we are about to sign an important memorandum of

understanding with a reliable company in Singapore. We know that

there has been a lot of concern about the Mexican economy in recent

years. We saw their currency dropping and investors pulling money

out. How tough is it to convince Asian investors to go and invest? It

depends on the planning horizon of investors. If you look at the

performance of the Mexican economy in the short term, and the potential

performance of the Mexican economy, we remain optimistic. We returned

business opportunities happening in the infrastructure field. That

infrastructure plan, they planned to invest $380 billion, in energy,

water, security, and in other applications, that have also come

into this part of the world. In Asia, you have frontier markets,

like Burma, Indochina, why should Asian investors go so far out of

their way to Mexico? It is all about risk and return, that profile. The

risk of investing in Mexico is low, and the return is significantly

higher than some other alternatives in the world. If you invest, you

take on the risk of a PPP project in sovereign nature. But, you have a

higher return on average. Any regulation aimed at stamping out

smoking comes to effect in Indonesia this week. Graphic health warnings

have been put on cigarette packets, but it appears the new laws have yet

to have an affect on demand the cigarettes. Our reporter found out

when we spoke to people on the streets of Jakarta. If you are a

smoker in Indonesia, you can light up just about anywhere.

You can smoke on the streets, in parks, and in public places. Even in

some government offices. In Indonesia, more than half the male

population smoke every day. In Indonesian government has tried a

lot to diffuse the number of smokers, but they haven't been

successful `` to reduce. This week, Indonesian cigarette makers had to

start warning smokers of how unhealthy the habit is. `` have.

Cigarette packets need to have graphic warnings that cover at least

40% of the package. There was little evidence of those images at stores

in Jakarta today. The smokers here had no idea about the new rules.

TRANSLATION: I don't make it will make a difference, so long as people

continue to sell single sticks of cigarettes, a majority of Indonesian

smokers are from poor backgrounds and they tend to buy the sticks,

rather than packs. I know a bit about the rule, but I don't think it

will have an impact, I am addicted. I would rather go hungry do not

smoke, if I don't smoke, I cannot think, so it will not make a

difference to me. Cigarettes are very cheap in Indonesia, because

tobacco taxes are so low, compared to other countries in South East

Asia. Activists say that Indonesia has to raise taxes on cigarettes,

but that is challenging, because the tobacco lobby is one of the most

powerful in the country. That is it that this edition of Asia

Business Report, you can follow us on Twitter. Sport Today is coming up

next. The top stories this hour.

The US has begun deploying the first of 300 military advisors to Iraq, to

help the government's fight against Sunni militants. Britain's phone

hacking trial has delivered its first verdicts ` and forced the

prime minister, David Cameron, to apologise.