17/09/2014 Asia Business Report

China's president heads to India, could his visit change ties between

the two Asian giants? And we take a look at the business tycoon behind

China's Alibaba. Thank you for joining us for this edition of Asia

Business Report on BBC World News. I am Rico Hizon. India is preparing to

welcome China's president Xi Jinping today, the symbolic three`day trip

is seen as a chance for India to push for improved economic relations

with the mainland. 2`way trade between the Asian giant is already

worth tens of billions of dollars, but the relationship is compensated

by politics and far from equal. Our correspondent has more. When it

comes to the economy, India longs to be like China. But it is years

behind when it comes to investing in roads, it airports, and railway

lines. Now its rival is set to step in and help. During a three`day

visit, the Chinese Premier is expected to promise money for

specific infrastructure projects like new industrial parks and all

trains, and pry Minister Narendra Modi recently returning from Tokyo

with pledges of $35 billion of direct investment over the next five

years, many expect Beijing to better that figure. China is already one of

India's biggest trading partners. 2`way trade stands close to $70

billion. But this is not an equal relationship. For every dollar of

Indian goods sold to China, India imports more than $3 worth. To start

rectifying the imbalance, India needs to make more things that China

wants to buy, but there needs to be some willing as well. IT services,

an Indian success story, have had a tough time entering the Chinese

market. China has also blocked market access for Indian goods like

pharmaceuticals and meet. On the flipside, India remains suspicious

of Chinese telecom companies. And Delhi has been restrict him access

to Chinese Labour especially on big projects like roads and airports.

Eliminating some of these obstructions is bound to be a

talking point over the next few days, but you can guarantee that any

concessions will have to mean both political and economic needs of two

of the world's most populous nations. `` have to meet. For more

from India and China forging closer relations, I spoke to a professor

from Singapore. The Indian government, under Narendra Modi, the

new Prime Minister, has not overcome the historical baggage that the

previous government had. For instance the Indian government led

by Narendra Modi and his party the BJP had nothing to do with India's

defeat in the 1962 war with China. To that extent Narendra Modi is in a

position to refashion or reconfigure the relations both clinical,

strategic, and economic, with China. So how do refashion and reconfigure

the relations? Yes, in the services sector certainly. Chinese president

Xi Jinping has indicated there will be receptive relations when they met

in the summit a few weeks ago. Also from the Chinese side, the Chinese

president has also indicated to Narendra Modi in Brazil that China

would be willing to invest more in India, in ever so many sectors. So

Narendra Modi himself is very keen to have a greater flow of Chinese

investment in economic and strategic sectors. And the legislators could

match and exceed the $35 billion that Narendra Modi it received from

Japan. Well, that is something we will have to wait and see what the

two leaders will announce as a possible figure. In other business

is making headlines, Chinese footwear makers say their chief

executive and chief operating officer have disappeared, along with

most of the company's cash. The firm is based in Germany and said that

both its bosses were untraceable. At the same time Ultrasonic said its

cash reserves in China and Hong Kong had been transferred out of its

reach. Shares in the company fell 79% on the news. The Organisation

for economic co`operation and development, also known as the OECD,

is set to tackle corporate tax avoidance on a global scale. It

plans to target multinational dummies that shrink their tax bills

by shifting their profits from one country to another. Companies

including Starbucks, Amazon, and Google have been accused of pursuing

such strategies but they have all said they operate within the law. He

is known for making bold claims and dressing like a rock star, he is the

charismatic executive chairman of the e`commerce behemoth Alibaba,

which is due to sell shares to the public in New York later this week.

He is a household name in China, but barely known outside. Our

correspondent takes a closer look at the man behind what is expected to

be the world's biggest ever stock market listing. This is the Hong

Kong neighbourhood of an area famous for high`end shopping. In the

building behind me stands one of the main offices of Internet giant

Alibaba. A company that in just 15 years has grown from a barebones

start up to a name synonymous with Internet retail in China. It was

founded by English teacher Jack Martin, on the left, who picked up

the language as a teenager on the banks of the Westlake in eastern

China, by giving free tours to visitors. After university, he

taught. All the while dreaming of his own business. Following several.

, he gathered about a dozen friends in 1999, in his flat, to found

Alibaba. `` Jack Ma. Alibaba focused on connecting

factory owners in China with wholesale buyers abroad. One of the

early Hires was a young American who first met Jack Ma at a sales event.

He was a little bit distracted because the lights were in his eyes,

and it was a little bit of an unpolished performance, but for me

it was like seeing sort of a rock star in the early days, in the first

bid, that was trying to build a revolution. `` first gig. The

Revolution came in 2003. Sensing competition from eBay, WACA three

decided to enter the world of online retail shopping. The company did so

well that three years later eBay decided to close its China business.

Now the confident technology tycoon, every inch, he heads a

company that sells more merchandise than eBay and Amazon combined. He

may have trained as an English teacher but he could run a

masterclass in online shopping. And according to its latest numbers,

Alibaba has 279 million users, 50% more than a giddy earlier. But the

so`called e`commerce lifestyle in China is very different. I spoke

earlier to a consultant to find out why. `` 50% more than at year

earlier. It is different in many respects. Firstly it is a

significant part of everyone's lights. One can control the lives

Alibaba control every side of things. They control capturing the

entrepreneurial spirit of the Chinese, where they like to sell

from their own companies and sell their own products. From that point

of view it is very different. One company controls a large part of the

market, and is very different because it is an integral part of

1's life. And Alibaba is an integral part of everyone's lifestyle. If you

take a look at the West, online consumers adapting to new

technologies, is at the same with Chinese consumers? Actually, I would

argue that consumers to adopt technology faster. What you see is

the actual movement of things in China, much much faster than

anything else in the world. For example, if you look at instant

messaging, not one of the strength of Alibaba, that instant messaging

programme has launched itself very quickly. That thing has exploded

over China, and not only is it simple instant messaging, but it has

moved into commerce. From that point of view it is innovating, doing

things you don't see anywhere else in the world. I would argue that

China is properly ahead of many other markets. With this attitude of

adapting to new technologies quickly, this has basically helped

Alibaba's rapid growth. Alibaba has grown significantly over the last

few years. The e`commerce market in China is 280 billion US dollars,

which is an enormous number. They control the vast majority, 80%, of

that particular market. They build a brand very early and are clearly

somebody who is trusted. It is that they get so many people visiting

their site. Because so many visit the site, it is very difficult for

other competitors to action and move into that particular realm. So

therefore they essentially have created a very, very strong rand

that people can capture. What is the downside to Alibaba's bit business

model? The downside as they are so big question is how easy it is for

someone to manage a company with such an enormous proportion, I think

that is one of the challenges going forward. The challenge is the

regular tree environment. The regular treat environment in China

changes every now and then. Question is whether they can remain within

the right regular treat framework for them `` regular Tory framework.

Thank you for investing your time with us. `` regulatory. The top

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