19/02/2016 Asia Business Report

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

Betting to be, Ken Agriculture save Australia's economy? -- betting on

beef? Can agriculture save Australia's economy. Falling diamond

prices. Hello, and welcome to Asia Business Report. I am Sharanjit Leyl

in Singapore. Australia's economy is faced with a double whammy, with the

end of the mining boom and a dependence on China, the country is

facing risks it hasn't seen in more than two decades. The government is

pushing agriculture as a new driver of economic growth but will it work?

Our Asian business correspondent travelled to the farming region of

Toowoomba in Queensland to find out. Carving out a fresh start. This

isn't just any old job. It is a lifeline for Scott. He spent 14

years of his life here before leaving this job for an oil rig.

When oil prices were high his salary doubled in just before Christmas he

lost that job, because oil prices crashed and now he is back. I wanted

more money, basically. In the oil and gas industry I was promised the

chance of moving up and progressing in the company further, and then

that went bust so I came back here. The way the company is going here

now, I can see it is going to be going very well in the future. So I

am happy to have a job. As Asia's middle classes get richer, more of

them want what Australia has to sell. Australian beef exports to

China hit a record of $655 million last year and showed no signs of

slowing. There are more than 50,000 head of cattle in this feedlot

alone. And almost half of the meat produced here ends up on plates

across Asia. These cows for example are destined for supermarkets in

Korea and Taiwan. But it is China, farmers here tell me, where they

have seen the biggest demand of increase in orders and enquiries

over the last couple of years. But it is not all blue skies and sunny

days just yet. Australia's beef sales are only worth about a third

of the value of what coal and iron ore into the economy. The government

says betting on beef is a long-term strategy. 3 billion people in the

coming decades will be in the Asian middle class. You also have rapid

rates of urbanisation and continued population growth. And that is going

to lead to a greater demand for services like education services,

tourism services, health services. So it is going to lead to a greater

demand for high-quality agriculture products which Australia is very

well known for, as well as high calorie agriculture products like

beef. Australia is hitching its fortunes to Asia yet again. First

coal and iron, now let us and beef. At Asia is slowing down, and that

could hurt farms and feedlot see it -- lettuce and beef. And you can

watch more reports on talking business this weekend at these times

on BBC World News. In other news, the low commodity and oil prices

that we just heard about affecting Australia's economy are actually

good news for airlines. Franco Dutch carrier Air France KLM has posted

its first profit in four years, cheaper oil reducing the annual fuel

bill by almost 7%. US taxi hailing company Uber is losing $1 billion a

year in China. It has to compete with a local rival backed by a

Chinese technology giant, Tencent and Alibaba. In the Organisation for

economic Corporation and development is calling for urgent action to

tackle slowing growth. The OECD cut its economic forecast for 2016 x one

third of a %, down to 3%. It said trade, investment and wage growth

are all too weak and that cutting interest rates and other monetary

policy fixes were not sufficient to boost growth. In those concerns over

global growth certainly are a headache for Asia's major economies.

Confidence that Japanese manufacturers was largely subdued in

February with the week outlook for the next months. That comes on the

heels of falling export data yesterday and disappointing annual

growth figures released earlier in the week. The disappearance of MH370

raised many questions, much more questions in fact than answers. And

one of the many conspiracy theories was the fact that the plan was

so-called cyber jack, or taken over remotely by hackers. But given the

advances in aircraft technology, including efforts they can be

tracked -- efforts to ensure they can be tracked, is it still a

possibility? Cyber security is one of the biggest topics at the airshow

currently taking place in Singapore. The search for MH370, one of

aviation's is mysteries, has gone on for nearly two years. Experts had

dismissed the possibility that the plain's systems were hacked and

remotely controlled but some still ask whether it can be done. If

someone wanted to take over a commercial plane, there are two

major systems they would have to access. The first is a flight

control system which is ultimately handled by the pilot. The second

major computer system is something called avionics, which looks after

the in-flight entertainment such as movies, music and internet

streaming. The computer devices for that are usually stored in the back.

Both of these systems are maintained separately and they would be hard to

access. Multiple people have claimed they have hacked the plan, most

recently an American security researcher said he did it through

the in-flight entertainment system, and became the subject of an FBI

investigation. The industry says it is not possible. You here probably a

few of these stories where people say they have done it. -- you hear.

I think there are some people who maybe have good imagination is out

there. But we don't believe that is possible today for any of these

systems. But as we get more and more sophisticated, there could be

problems. And so we have to take extra special measures to protect

ourselves and our industry to make sure this never happens. And so in

the industry we have been working for several years now on very, very

strict... Think of it as like a super firewall that will be on-board

the aircraft to separate the flight control systems from other passenger

internet service, to make sure that there is no unwanted access from

someone on the ground into one of those flight control systems. So

this is very, very important. I don't believe there is a risk there

today but we want to make sure it stays that way. Cyber security is a

problem now for every industry. For the aviation sector, whether you are

on the ground or in the area, it has become clear that just because it

hasn't happened doesn't mean it won't happen. To all that sparkles

now, and about 90% of the world's natural diamonds are through the

Indian state of Gujarat, where they are cut and polished before being

sold in Dubai. Business is suffering due to a worldwide glut. Our

correspondent reports from the State capital. India doesn't mind

diamonds. But it is estimated nine out of ten diamonds in the world are

processed here in Surat. Over the past year China's slowing growth and

crackdown on corruption has meant demand for the precious gem has

slumped. Prices fell, jobs have been cut and businesses have closed down.

This former factory tells the story of what is going on in Surat's

diamond industry. For 15 years diamonds were cut and polished ear

and it employed upto 35 people. As you can see, the owner has now shut

down the workshop. All the jobs I gone, and it is thought that nearly

300 similar operations across the city have also gone out of

business. Surat face a similar scenario during 2008 during the

global financial crisis but back then it didn't take too long for the

industry to bounce back. Demand revived within a year, followed by

years of big orders which helped businesses like this to flourish.

And one of the biggest players here expects the same trend this time

around. Last year everybody started reducing their manufacturing. Some

of them closed down, the small people. So the whole cycle

continued. Now the demand is stable and by the end of the year it should

come to its peak points. Sales in the United Bates, the world's

largest diamond market, have risen in the last months. There is a risk

of becoming too confident too quickly. People here are keeping a

close eye on the international market, looking for signs the

diamond industry will regain its sparkle. Let's take a look at the

markets. They certainly are not sparkling today. All the Asian

markets that have opened a mainly lower. They have taken their cues

from Wall Street and also due to the fact that oil prices have doubled a

bit of a pullback. That is unsettling equity markets, and of

course we also saw more of this earlier this week, especially in

Australia where the market closed two week just yesterday. That is it

for this edition of Asia Business Report. Thank you for