05/04/2016 Asia Business Report


05/04/2016

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He has said he has had encouraging talks with the UK government, but

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there is still a lot to do. Now on BBC News, all the latest

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business news live from Singapore. Interest rates are going up in the

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US. Asia exceeds its fortune in lower rate. And trying to cool

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china's redhot property market, but outside big cities it is a different

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three. -- story. Welcome to Asia Business Report. America's central

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bank has been in the spotlight lately, and investors wait for its

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next rate hike. We will also get monetary policy decisions from

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several central banks in Asia. We expect a hike from the Federal

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Reserve in the US, we are seeing a wave of cuts in this region. In

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Japan, the official cost of borrowing has been lowered to below

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0%. We are expecting a cut in the near future if not today from both

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Australia and India. We will hear from our correspondent in Delhi

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shortly, but first Shane Oliver expends why he believes is tell you

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is unlikely to cut today. It is a wait-and-see issue. For some time,

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bankers have said there is low inflation in a stroller providing

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scope to cut interest rates again if needed. We also have relatively

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restrained growth in Australia and unemployment is around 6%. The

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Australian dollar has gone up by about 12%. That rise in the dollar

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partly owes to the Federal Reserve. They have taken a pause in raising

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interest rates which has pushed down the value of the US dollar and

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pushed up the value of the Australian dollar, which is a drag

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on the Australian economy at a time when we need a contribution from

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exports for growth. You say Australia needs this growth in net

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exports, and it is facing several headwinds not those from China,

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which is slowing. It is its largest trading partner. How much of this

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can be fixed by policy measures? I guess the big dynamic in Australia

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is the end of the mining boom. That has dubbed about 1%, and I will

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continue next year as mining investment continues to unwind.

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Against that, houses helped more recently. The low Australian dollar

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helped areas like tourism, and higher education as foreign students

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came back to Australia, and more recently, manufacturing. The low

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Australian dollar has helped growth keep going at a time when the China

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related boom has come to an end. That was Shane Oliver on interest

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rates. But another central bank making a rates decision today is

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none other than India, which I mentioned earlier. Many are

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expecting a cut. When India's central bank meets today to decide

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on interest rates, focus will be on inflation. It has come down for the

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first time in six months. The last rate cut was in 2015 when the

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governor cut interest rates by 50 basis points down to 6.75%. And if

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another cut takes place later today, it is expected to be passed onto

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consumers more quickly than before, echoes of a new policy by the

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central bank. Many argued this is the best chance for the bank to

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lower rates this year -- because of a new policy. If there is lack of

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rain in the upcoming monsoon season, it could spike in inflation again,

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and the country faces its first back-to-back droughts in three

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decades, nicking life difficult for more than two thirds of the nation.

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For once, the debating India is not will there be any interest rate cut

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but by how much? Will the government go for a quarter percentage point

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cut, already about 0.5% cut? India's finance minister has already

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warned that high interest rates could make the Indian economy

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sluggish. It seems the government is hoping India's central bank will

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further cut policy rates to maintain growth momentum in the economy.

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Call has been king, but recently the sector has been struggling and seems

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to be in some sort of decline -- coal. Global prices fell by a lot

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sliced e.g. To a global oversupply, unlike other commodities, coal

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prices have been suffering from china's slowdown -- thanks to a

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global oversupply. There are also plans to cut its own consumption of

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the black stuff by 1%, or 43 million tons. Other coal producing countries

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are also being affected. One of North America's biggest coal

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companies filed for bankruptcy, and exporters in Australia and Indonesia

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have also been hit. Where does the future light for coal? We can speak

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to the chief executive of one company who gives us his view. It is

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important to make a distinction between two types of coal. There is

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coal that is fed into steel, fundamentally no substitute existing

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flat. And the level of demand we safer that is a direct result of the

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health of the global steel industry -- no substitute for that. The coal

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that is focused on by environmental activists, if we see five or ten

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years ago, it developed market concern in investing in coal, I

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think we have seen a continuation of that turnout. Big US, British

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Private Equity, public pension funds are pulling back from investments in

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coal. There are emerging China market is dependent on it for power

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generation. We are seeing a further export of pollution at the moment to

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an ever tighter handful of developing market economies that are

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still willing to rely on coal for their power. I think the hangover

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for coal at the moment is the sustained pressure in considerable

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part environmental capital led continues to put an overhang on the

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demand side. Even as that supply-side comes in to check,

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reduces itself and reduces itself further, it is consistently seeking

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to catch up with the weakening demand side, and hence that

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sustained overhang. In other businesses, the International

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Monetary Fund has said china's slowdown and rising volatility in

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emerging markets are two of the top to the glowing growing economy.

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Global stocks plummeted on the first trading day of the New Year after a

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major sell-off in Chinese markets. It fuelled disappointing data in the

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world's second-largest economy. They could be more spillovers as china's

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financial influence grows. Apple's latest attempt to enter the Indian

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smartphone market is selling used friends has hit some obstacles. The

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iPhone maker wants to become the first phone maker to import and sell

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used friends in Apple but this is its second attempt to gain

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permission to do so -- sell used phones in India. As you keep

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hearing, china's economy is slowing, but the cost of housing continues to

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go up and up. At least in some parts of the country. New figures show the

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price of new homes is still increasing in some big cities like

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Shanghai, and that is on top of the 15% growth we saw last year. But how

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risky is the government's policy? Our correspondent has more.

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Shanghai is still billing to meet demand, but in name middle of a city

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of 25 million people, there is not much space left -- but in the

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middle. That is the kind of place Howard is in a hurry to buy. He has

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been waiting for the right people work in six months. His friend's

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apartment has gone up in price by 60%. I go to buy is secondary

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apartment and a lot of people are looking at that one, so people just

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push up the price. So many people are visiting one single apartment.

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The government has imposed new restrictions to try to cool demand.

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Buyers will need more deposit for starters. But it is a delicate

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balance because at the same time, the world's second-biggest economy

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is slowing. China is a nation of savers. The government is trying to

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change that. It wants people to spend more, Oromo. Buy a house maybe

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and everything that goes with it -- or more. Some buyers are using

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places like this to part finance the homebuying. It is called

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peer-to-peer lending and has grown to be a multibillion-dollar online

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business but it is risky. Many friends have gone under. The problem

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is should this money be going into other sectors? Lots of investors are

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getting barebones this way. Expect their loans. So China has cheap

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money in concerns about bad loans. But outside the major cities, it is

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not a shortage of houses they are worried about. It is empty houses.

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And now out of Shanghai, there is a development nearing completion. It

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might be a safe bet for investors, but that tower is only 40% full. In

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smaller cities across China, it is far from rosy. Massive amounts of

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new housing remain unsold. Nonetheless, the government says the

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property market is in good health. It is not clear what the new

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measures to tackle that grey market in loans will be, china's regulators

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want to make sure these sellers have buyers, wherever they are a

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Christian country. -- across the country.

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A quick look at the markets. We are waiting for the Hang Seng to open.

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And that is it for today's Asia Business Report. Thank you for

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watching.

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