02/05/2016 Asia Business Report

landing? We have a bull and bear battle it out. We find out how he is

getting it his swing back into the economy by making golf more

affordable. Welcome to Asia Business Report. New numbers from China show

activity in the manufacturing sector grew full a second month in a row

but only just. The official purchasing manager index came in at

50 points and that is down from 50 .2. How you view the slowdown may

depend on whether you are an optimist or a pessimist. One

well-known pessimist is Gordon Chang who is the author of the book, the

coming collapse of China and I caught up with him recently in China

as well as this gentleman. He's an optimist or a ball. I asked some way

China was headed. I think it is going from a natural transition from

an an economy that was overreliant on manufacturing, overreliant on an

investment driven economy and one that is extra consumer driven,

service orientated economy. So naturally you going to expect a

slowdown. And you can't teach you to grow at 10%. This is exactly what

the IMF and others have been telling them to do. We are seeing a

slowdown. But that is going to be something that we expect them to get

through over the coming years and come out the other side within an

economy that is more resilient. And actually you don't agree with

anything that he says. I don't think they can make this transition

because there are significant opposition in Beijing. At the same

time you have but showing dollars of net capital outflow, and when you

look at all the debt, and you also have this infighting between the

president. And that makes for a very difficult policy to implement. They

are not going to make this transition that everybody wants them

to. And although technically nothing is inevitable, a crash of some sort

looks virtually certain. And you say a crash and you saw something like

that with the stock markets and of course the policy response to that

crash, so Mark, being the ball, are you optimistic that they can get

past some of these problems? I am optimistic and you mention the stock

market but it went up quite significantly before the. So yes it

is comedown there is volatility and they are learning how to manage a

market-driven economy. Is ultimately happens overnight. There is still a

huge savings ratio in China and people save an enormous amount.

There's a huge amount of reserves but the central bank and the state

has. We think is enough firepower for them to manage this transition

out the other side into three to five years from now. Gordon you have

been predicting doom and gloom to China for years and so far you're

been proven wrong so how can you be so sure what you are predicting is

going to happen? This is not about me but when you look at this they

don't have the reserves they have. And some of those reserves they have

are illiquid. Most savings have been put into unproductive investment

across-the-board BC con me is not as good as they say it is. Eventually

they can of course postpone the laws of economics that they cannot avoid

them altogether because they can't repeal them. Perhaps we'll go to

mark, when you add his way China to start picking up again in which we

stop worrying? I think between the next three to five years. I think

they can come out of this then I think they will manage something

that no one else has really done. No one has been able to do it because

it is impossible. I think that is really the problem, especially when

you look at the economy is and also the politics. They're going to kill

it at the end of the day. And assess leave every year or 18 months and

when you look at the amount of reserves in decline and the money

coming out of China, no economic and not unwise because China can sustain

outflows of that sort. That was Gordon Chang and Mark Austin.

Austro's third-largest lender has reported a rise in profits. That is

less than forecast with higher bad loans to blame. The bank says it

institutional lending business was hit by significantly higher in pen

and charges involving four major customers. Bed of the international

agency says that oil prices may have bottomed out in February. It fell to

a 12 year low of less than 30 dollars a barrel but prices have

been rallying to being a high at $48 on Friday. The chief believes that

the only direction from here is up but he stressed that it all hinges

on the health of the global economy. And this week we will see

the first party meeting in over 35 years in the most powerful

institution in North Korea. The ruling workers party in North Korea

controls the government and the military and whether citizens can

trade in the growing private sector. He explains what we can expect. It

is expected that the government will announce a major government

restructuring, promoting middle rank of offices and declare a new

economic development plan. Something very similar to what happened many

years ago in the form of five-year multiyear plan. And finally, it can

be expected that the government may announce a very bold leadership for

the peaceful coexistence and released a moratorium of nuclear and

missile issues in exchange for the world excepting North Korea's

proposal for discussing potential signing of the peace treaty to put

an end to the Korean war since 1953. Now, golf, is a sport that

many would describe as elitist and certainly expensive. But now South

Korea the government is trying to make it a lot more affordable and

the aim is not to create a generation of new champions, rather

by encouraging more people to play the game the government is hoping to

boost spending in a sluggish economy is built on. Golf holds a special

place in South Korea's sporting landscape. The country has produced

six of the world's current female golf players. But sport is by toad

and the government is hoping to encourage more people onto the

fairway with the economy in the doldrums, a partially golf led

economy is the ultimate aim. TRANSLATION: Golf has an elitist and

extravagant image and it is very expensive. We feel it is right that

we develop golf is a public sport. To ease some of the consumer 's

burden, expand the sports -based and heightened the golf industry is

international competitiveness. Right now, joining a private club costs

180,000 US dollars. Even for a public cause it cost around $200 for

a group of four. Plus fees for the caddie. The government is pushing

the lower membership fees and was to relax the rules that requires

players to use golf carts and carries. As well is in courage in

private clubs to turn public with low interest loans. But not

everybody is happy with the latest plans. The ebbing popularity of golf

has left many private courses in financial straits. TRANSLATION: The

government pushes policy to make golf a public sport, meanwhile,

private clubs and lower taxes. Simply, private golf courses of

focusing on how to make money. They on the opposite side of the

governments policy. The these reasons there are a lot of

complaints from private clubs. And the government 's initiative faces

another challenge. The high cost to send many golf lovers off the greens

and in front of screens. The artificial experience is booming and

from less than 1000 screen golf lounges years ago there are now

7000. And it only cost $26 to play. It may not prove easy to get the

swing back into South Korean golf. Let us take a look at those markets

because Japan's nick a has opened to huge losses. It takes an impact on

exporters but we also have Japan's Golden week holidays heading into it

this week on the market is a fairly quiet. That is it for the addition

of Asia Business Report. Thank you for