06/06/2016 Asia Business Report

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

The world was in a two biggest economies need for an economic

dialogue and tensions are high are the trade practices. -- world's. And

drones are so popular they now have our own festival. We have a report

from San Francisco. Good morning Asia. Hello, world. And welcome to

Asia Business Report. Thank you for investing your time with us. It is

considered one of the most senior bilateral talks between the US and

China. John Kerry is in Beijing along with the secretary in China

for a dialogue between the two biggest countries in the world. This

is their last meeting under the Barack Obama administrations. They

have previously covered trade and currencies and other topics. I spoke

with a German of exports. -- chairman. He used to take part in

these in the Bush Administration. You have a fair amount of

continuity. There are a huge amount of concerns in China and the US

about overcapacity. Production issues. Steel and other heavy

industries with global impacts. The Chinese know they have to dial down

that production to help reform in their country. We have the currency

as well. For many years it has been a concern. This time, China has not

been labelled a currency manipulator. The issue is still

there. It is probably not as front and centre as other issues on the

economic side. The political season means it will get more news coverage

in the US than otherwise. What is interesting is tensions over the

South China Sea. There are many sources that they want to get a hold

of so be -- resources. I heard someone tell me that China would not

abide by an international court ruling. That was brought in the

Philippines against it. They have been adamantly resistant in falling

into line in the South China Sea. China has no appetite to compromise

or work out these disputed territory issues with its neighbours. It is in

a moment of resolve and will continue to build on that. My view

is they will be downward pressure on the relationship. Governing this is

what both parties want to keep, they want a positive relationship. But

there will be downward pressure in the discussions in the next three

days. It is Obama's last, but it will be the first for whoever is the

new president next year. How will relationships change. Hillary

Clinton will focus on geopolitical issues. She is also... She has

personal experience with China and working on those issues. Donald

Trump will see less tension on the South China Sea but more issues on

the currency issues and overproduction. Speaking to me

earlier. Swiss voters have rejected a proposal to introduce a guaranteed

basic income for all. Final results show that nearly 77% opposed it with

only 23 backing it. They were calling for adults to be paid a

monthly income regardless of whether they were working or not. It would

be about 2500 US dollars per adult. It is the first country to hold such

a vote. The soft bars of a drone flying overhead is becoming a more

common sound across the world as the technology becomes cheaper and more

affordable. -- buzz. And more amateurs are becoming enthusiastic

about experimenting with these drone. But not everyone welcomes

these. They are waiting nervously for new regulations that could have

a big impact on the technology's future. We have more from San

Francisco. It must surely be the most beautiful spot in the most

beautiful city. The San Francisco Palace of Fine Arts was built in

1915. It was a chance to show the latest of innovations. It was at

this event that a phone call was made and Alexander Graham bell made

a call from here to here is assistant in New York. -- Bell. --

to New York. It is an industry which is growing massively. In 2013, sales

of drones were worth over $250 million worldwide, but they had

risen in 2015 to $1.6 billion. What could happen in 2016? All eyes are

on the US government. They will announce regulations later this

month and could open up new and legal ways to use them, especially

in business cases. At the end of this month we will see a commercial

roll-out which will allow free use of US technology for commercial

purposes. There will be limits, but it is a first step in turning this

incredible technology into a viable tool the industry. You can see the

lights here signalling it is on. One company watching the US market

closely will be a Chinese tech giant. Last month, this man went on

Facebook to announce their own drone. The specifications are very

high like most of his projects. The pricetag is considerably lower than

its Western equivalents. There are further opportunities to be had in

building software that makes use of drones. This is a Google street view

in the sky. It maps out what is beneath it to provide better

navigational data to drone pilots. It will take too long and that will

slow the growth of the industry if we use old technology. What they are

making smart decisions and are being methodical. It is just a matter of

demonstrating to regulators and society as a whole that they are

safe and they don't invade privacy. They are doing their best to shake

off suspect safety. Sometimes, irresponsible flying. They want to

move forward in what could be a multi- billion-dollar industry. San

Francisco, BBC News. If you are looking to set up shop anywhere in

the world, where do you think is the best place for your business to

grow? According to a report, four out of the top five countries of

retail investment are right here in Asia. My next guest is at the top of

the list. We have more on the retail findings. We are joined from

Shanghai. It is China. We looked at the top 30 countries and looked as

economic factors and retail specific findings. With Asia we have four of

the top five within Asia. It is about developing the middle-class

and the continuing growth in China. Despite economic headwinds, it is

growth of more than 8% in retail, larger than the GDP in all

countries, just in China. China is topping the list despite the

economic slowdown. India came in second. Despite the limits we saw

placed on many foreign retailers to invest there in the past, and very

surprisingly, Malaysia was third. Were these surprises? Were there

others? Look at that. Malaysia and Indonesia coming in at fifth with

Sri Lanka at 10th. Look at these. The development of the countries is

a lot around the middle-class continuing to develop. Asia ranks

very high. The government factors the support and the move towards

e-commerce. Many factors are continuing to drive the retail

sector. Malaysia, one of the questions that comes up is why

Malaysia? It isn't a large population. But what it has is a

very strong business readiness and friendliness components to it that

makes it easy to come in, especially with the Proxima D2 Indonesia. --

component. It is a good place to build your brand in the region. --

proximity. We also have convenience stores and hypermarkets looking to

roll-out from Indonesia to China. What are these trends you are

picking up on? What are some others? The interesting trend is around the

convenience stores. In China, look at the hypermarkets that have come

in. Across the region you have seen them come in from Taiwan and from

the US and Europe. But want to get past that initial footprint, Asia

still operates in major components. As they move up into that

middle-class spectrum, timing becomes more important, along with

efficiency. People are looking to shop in a friendly way. The other

factor coming into play across Asia and is typically in China is

e-commerce. The e-commerce penetration rate in China is double

what it is in North America. Over $1 billion in sales last year. If you

are a retailer coming into Asia you better understand the e-commerce

market. Let's look at the markets before we go. We had a dismal US

jobs report. US stocks down. And the Nikkei is tanking at well over 1%.

That is due to seeing the yen strengthened. That jobs report

leading to expectations the Fed will not raise interest rates any time

soon. And that is it for this issue of Asia Business Report. Thank you

for in the thing your time with us. -- investing. Welcome back. You are

watching BBC News. Let's bring you up-to-date with the headlines.