18/05/2016 Asia Business Report

Is expected growth from Japan. Are things looking up for the land of

the rising sun? And hi-tech attractions. Our traditional

institutions like museums are working to attract new fans. Good

morning Asia, hello world. It is Wednesday. Glad you could join us

for this edition of Asia Business Report. We kicked off with Japan and

the latest growth numbers reveal that the economy expanded in the

three months until March by 1.7%. That is better than what many were

expecting. The boost came from growth in exports and government

spending. Does this mean that the Japanese economy is moving away from

a slump? I spoke to Martin Schultz from the Fujitsu Institute in Tokyo.

What do you make of these numbers? The economy avoided a recession.

Exactly. These numbers are really extremely welcome. Japan is clearly

not in recession, and we are in a slightly positive trend, as we were

hoping for. These numbers are actually much stronger than most

were expecting. The only little problem is that a lot of that didn't

come just from the private economy, from additional export. It came a

lot from additional government spending. A little problem that is

quite a lot in terms of government spending, because Japan has racked

up a fair amount of debt from the government's efforts to prime the

economy. Can this spending continue without a plant sales tax hike from

8% to 10%? It is quite likely -- planned sales tax hike. One of the

lessons from last year is that monetary policy is not as effective

as it was before and it might have reached some limits. What we will

probably see throughout this year is that the bank of Japan will remain

expansionary, buying government bonds, and the government will

probably start to spend even more than they did before to support the

economy. So basically we get now an expansionary fiscal policy as well,

finance to the central bank. How does the interest rate negative

policy of the Bank of Japan play in the world this? It was supposed to

help the economy and weaken the yen, but the yen has strengthened rather

against the US dollar. Exactly, the impact of monetary policy,

particularly when Japan moved to negative nominal interest rates, was

not as positive as hoped for. Actually there was a negative

reaction on many sites. Banks just feel that household savings are

being taxed by the government so the next steps will probably be more

quantitative easing, more buying government bonds, and the government

will use this to spend more on investment, on the demand on

healthcare, on education. Which is quite a bit positive in the current

environment. Keeping fingers crossed that this indeed will help the

Japanese economy from its slump. Martin Schulz from the Fujitsu

Institute, thank you for your insights. In other news: making

headlines, the United States has slapped steelmakers with import

duties on rolled flat steel. The US says the Chinese products were being

sold in their market with unfair subsidies. According to the US

Department, the latest duties will increase the import price fivefold.

Cold rolled steel is pro- merrily used in car body panels, appliances,

shipping containers, and construction -- primarily. The US

has removed most of its sanctions against Myanmar for another year.

Restrictions against some companies have been lifted but several dozen

individuals and companies remain blacklisted. President Barack Obama

said concerns remained over obstacles to fool civilian control

of the government, continuing conflict and human rights abuses

committed by security forces. Apple boss Tim Cook has arrived in India

for his first visit since he took over the technology giant. It is the

fastest-growing smartphone market in the world, and with iPhone sales

dipping in China, Apple hopes India can be its next the market. So far

though it has not made much in road. So why is it struggling? Our

correspondent reports from Mumbai. Look around the phone shop here and

you won't find many of these. 24 million smartphone handsets were

sold in India in the first three months of this year but less than 2%

of them were Apple iPhones and the reason for that are these pricetags.

Most smartphones in India cost between $100 and $200. The latest

iPhone in a shop like this cost close to $1000. So the Indian makers

such as Lava are cleaning up in a market dominated by low-cost phones.

But Apple is not giving up just yet. If you look at the top end of the

market, it is clawing back market share from its big rival, the

Samsung Galaxy. Its plan to open the first Apple Store in India is a nod

to the brand's appeal and a growing number of middle-class Indians can

afford the products. Asia's biggest internet company, the Chinese giant

Tencent, is set to unveil its latest profits which are expected to be

positive. It has been reported the company is planning to raise $4

billion through a bank loan. They will fund further acquisitions. Our

Hong Kong correspondent has more. Tencent is listed right here at the

Hong Kong stock exchange, and on many days of the year it is one of

the most actively traded stocks. And with net income expected to rise as

much as 30% on last year, that interest isn't likely to diminish

any time soon. Now, its most popular, best known offering is

called WeChat, and it is building that out to be a wide-ranging

platform for mobile games, social media as well as even e-commerce and

advertising on WeChat is a new and highly anticipated source of

revenue, adding to continued strength in mobile games which

accounts for about half of its overall business. And such is the

confidence among investors that according to news reports when

Tencent approached banks for a $2 billion loan, there was so much

interest that it decided to raise the amount to $4 billion. Tencent

has declined to give any other detail about that possible loan. But

we do know that along with Alibaba and Baidu, Tencent may well be

benefiting from investors from abroad who are seeking safety from

slow stock markets and a weak economy. It may not be the most

obvious of competitive markets, but art galleries and museums are

constantly trying to find new and imaginative ways to turn a profit.

Today, for international museum day, we have been to one venue here in

Singapore which is trying to grab the imagination of an increasingly

sophisticated hi-tech audience. Welcome to the Crystal Universe, an

art installation that uses more than 170,000 LED lights to give the

illusion of stars moving in space. If you would rather not spend around

1 million US dollars to buy and install it, it is now providing what

this museum says is an interactive experience to challenge the digital

video entertainment market. We were thinking about Future World as an

amazing encapsulation of our artistic mission, but also as a

project which would bring in big numbers, both of tourist said that

local audiences. And the trick when you are a museum that has to have

one foot in the commercial space and another foot clearly in the cultural

spaces is to balance those two perspectives. Created by Japanese

artists and technicians, around 500,000 hi-tech art lovers saw the

exhibition in the less than five months it were shown in Japan. They

are calling it a sensory digital playground. Really cool, because I

like how when they scan it it comes up on the screen. There is not a lot

of museums that I like this, which makes it different from other

museums. And I quite like how it is very interactive and kids can also

play with it and it is not, like, boring. Whether bringing technology

to the art world is just a passing trend or something more substantial,

those involved in installations like this believe it is all part of the

creative journey. Let's have a quick look now at the markets. A mixed day

so far for the regional forces. The Nikkei is currently flat, lower due

to the better than expected GDP numbers. Australia is also in

negative territory by 38 points. Thank you so much for investing your

time with us, I am Rico Hizon. Sport Today is up next.

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