Browse content similar to 08/06/2016. Check below for episodes and series from the same categories and more!
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Now it's time for Asia Business Report. | :00:00. | :00:14. | |
Low word expectations. The World Bank slashes outlook for world trade | :00:15. | :00:22. | |
and investment. And the cost of climate change. This week's storms | :00:23. | :00:29. | |
in Sydney, out they a sign of things to come? -- are they. Good morning, | :00:30. | :00:34. | |
Asia. Hello, world. Welcome to Asia Business Report. Thank you for | :00:35. | :00:38. | |
investing your time with us. The World Bank has downgraded its growth | :00:39. | :00:42. | |
forecast for the global economy to 2.4%. Just six months ago it was | :00:43. | :00:48. | |
expecting to expand by nearly 3%. One of the main reasons for this | :00:49. | :00:53. | |
revision is a slowdown in global trade activity. Earlier, I spoke to | :00:54. | :00:59. | |
The World Bank. One of the lead authors of the report. He told us | :01:00. | :01:02. | |
what led to this downgrade. The downgrades focused on commodity | :01:03. | :01:10. | |
exports economies. Given the low commodity prices we see weakness in | :01:11. | :01:15. | |
exporters. Look around the world. You see weakness in global trade and | :01:16. | :01:21. | |
financial flows. At to this, of course, depressed commodity prices | :01:22. | :01:28. | |
biting growth and you end up with this outcome. And we have seen Japan | :01:29. | :01:34. | |
and the US with massive downward revisions. Japan is the third | :01:35. | :01:38. | |
biggest and the US is the largest economy. What pressure does that put | :01:39. | :01:45. | |
on growth? The US and Japan count for a significant part of global | :01:46. | :01:50. | |
output. When these two economies slow down they have effects on other | :01:51. | :01:56. | |
countries because of the demand for goods produced from other countries | :01:57. | :02:01. | |
declining. With the US, we saw weakness earlier in the year. For | :02:02. | :02:05. | |
the rest of the year the economy will stabilise, we think. Japan, the | :02:06. | :02:10. | |
economy is going through a low growth equilibrium. The recent | :02:11. | :02:18. | |
earthquake did not help. That makes for dire reading. Doom and gloom. | :02:19. | :02:26. | |
What are some bright spots? There are some. Look around the world. We | :02:27. | :02:33. | |
see economy is that import have been resilient. -- economies. They have | :02:34. | :02:39. | |
had benefits from the low import price. We expect them to grow around | :02:40. | :02:49. | |
5.9% this year. This is very close to the long-term growth average. In | :02:50. | :02:55. | |
the context of Asia, especially East Asia, you see countries like the | :02:56. | :02:59. | |
Philippines, Vietnam, Myanmar, putting rather strong growth | :03:00. | :03:04. | |
numbers. So there are some bright spots. The World Bank. Despite what | :03:05. | :03:11. | |
he said about Japan, the country has just revised its growth figures from | :03:12. | :03:13. | |
the first quarter to a slightly better figure. It came in at 1.9%, | :03:14. | :03:21. | |
the GDP, compared to the initial estimate of 1.7%. But it still faces | :03:22. | :03:26. | |
big challenges, especially from the strength of the currency. The | :03:27. | :03:31. | |
managing director of an advisory firm explains what has been driving | :03:32. | :03:35. | |
the yen higher. There was a little bit of damned if you do, damned if | :03:36. | :03:43. | |
you don't. The main point is that the investors, foreign investors, | :03:44. | :03:49. | |
were getting sceptical on Japan's commitment, as well as their ability | :03:50. | :03:55. | |
to achieve the 2%. That is on the Japan side. The second factor is | :03:56. | :03:59. | |
that I think there was money shifting back to Japan. Not just | :04:00. | :04:04. | |
speculative money, but Japanese corporate is with overseas earnings | :04:05. | :04:10. | |
going back to Japan so big -- corporates. They want to buy them at | :04:11. | :04:20. | |
110 yen and it was 100. So they wanted to do that. And the third | :04:21. | :04:26. | |
reason, in our recent research we looked at the past. We fed | :04:27. | :04:31. | |
tightening cycles and how the yen behaved. In all those, what is | :04:32. | :04:41. | |
common is that with exactly the same combination as today, in all three | :04:42. | :04:46. | |
instances, the yen strengthened. In other news, Ralph Laurent is closing | :04:47. | :04:53. | |
stores and slashing jobs to try to reverse its falling fortunes. Best | :04:54. | :05:00. | |
known for its Polo shirts plans to shut more than 50 stores and will | :05:01. | :05:08. | |
cut 8% of its 50,000 workforce. They expect to have savings of up to $220 | :05:09. | :05:12. | |
million a year. That is the first big move from the replacement for | :05:13. | :05:18. | |
the company founder, rather rent, last year the bike -- Ralph Lauren. | :05:19. | :05:26. | |
Recent floods could cost $160 billion in France. That is from the | :05:27. | :05:33. | |
AFA. That is after floods devastated and affected some 150,000 people in | :05:34. | :05:40. | |
France. And Australia has been hit by wild storms which prompted $28 | :05:41. | :05:47. | |
million in insurance claims just this week alone. But if climate | :05:48. | :05:51. | |
change brings more wild weather like this, because in the long-term could | :05:52. | :05:55. | |
be much greater. Coastal erosion could cost Australian home owners 65 | :05:56. | :06:00. | |
billion US dollars over coming decades. Just how big is the threat? | :06:01. | :06:05. | |
Earlier, I spoke to a climate institute in Sydney. Australia is | :06:06. | :06:12. | |
quite exposed to different effects of climate change. So, all of the | :06:13. | :06:18. | |
hazards we are going to see, droughts, extreme temperatures, all | :06:19. | :06:25. | |
that. We are also very coastal. Our society. We live within a few | :06:26. | :06:30. | |
comment as of the coastline. Especially in the east. -- | :06:31. | :06:38. | |
kilometres. Lots of our housing and infrastructure is close to the sea. | :06:39. | :06:46. | |
So, much of our housing is exposed to sea level rises and other perils | :06:47. | :06:51. | |
related to that. You mentioned housing being an integral part of | :06:52. | :06:56. | |
the economy of Australia. It accounts indirectly for one third of | :06:57. | :07:01. | |
Australia's economy and mortgages account for 60% of the big four | :07:02. | :07:06. | |
banks' assets. What can be done in the long-term? Can you defend the | :07:07. | :07:12. | |
housing sector from this? It won't be easy. It will require all three | :07:13. | :07:17. | |
levels of government. The insurance sector, the banking sector as well. | :07:18. | :07:22. | |
And other sectors as well, like construction. We have set out a bit | :07:23. | :07:27. | |
of a map of how it could proceed. There have been many policy reviews | :07:28. | :07:34. | |
into this over the last decade. So far, very little has been done. | :07:35. | :07:38. | |
Australia has had a housing construction boom in the last few | :07:39. | :07:44. | |
years as well. In parts of the country, it is still not terrific | :07:45. | :07:48. | |
levels of planning controls over, for example, how close you can build | :07:49. | :07:53. | |
to the shore and provisions for flooding. Donald Trump and Hillary | :07:54. | :07:59. | |
Clinton are all but certain to clinch the nomination is to be the | :08:00. | :08:02. | |
presidential candidates for their parties. -- nominations. Donald | :08:03. | :08:09. | |
Trump has extensive business interests but has taken intervention | :08:10. | :08:11. | |
against free trade, especially with China. Mrs Clinton also opposes the | :08:12. | :08:17. | |
Trans-Pacific Partnership trade deal. So how are they feeling? We | :08:18. | :08:24. | |
have more from New York. There is a little bit of concern. It is mostly | :08:25. | :08:30. | |
because, at the moment, when it comes to economic policy and Donald | :08:31. | :08:35. | |
Trump, much is not known so far about what he wants to do. There is | :08:36. | :08:42. | |
an understanding in terms of perhaps what he would want to do with | :08:43. | :08:47. | |
corporate tax policy, all with the minimum wage, but more concrete | :08:48. | :08:53. | |
issues are not exactly clear. -- or. That is what is happening now. Now | :08:54. | :08:57. | |
we have seen that both the Democrats and Republicans are starting to | :08:58. | :09:04. | |
coalesce around their candidate we will see more details emerge in | :09:05. | :09:07. | |
terms of concrete ideas with regards to their economic policies. Of | :09:08. | :09:13. | |
course, you were in New York, the capital of America, what does | :09:14. | :09:19. | |
corporate America and businesses there want from the new president? | :09:20. | :09:24. | |
They will want to see less regulation, less corporate taxes, | :09:25. | :09:31. | |
and, you know, those are the things that really concern corporate | :09:32. | :09:33. | |
America. Any being that would really hope to encourage more economic | :09:34. | :09:41. | |
growth in the US. So, in that way, Donald Trump, some of the musings he | :09:42. | :09:47. | |
has made with regards to that, I welcome news. He wants to see the | :09:48. | :09:54. | |
loopholes fall corporate taxes closed. -- are welcome news. He also | :09:55. | :09:57. | |
doesn't want to see a raised in corporate taxes. -- raise. Hillary | :09:58. | :10:04. | |
Clinton also wants to close those loopholes but hasn't made any | :10:05. | :10:14. | |
mentions of lowering the taxes. The Nikkei is flat, that is despite what | :10:15. | :10:23. | |
I told you about the GDP being better. There are still ongoing | :10:24. | :10:27. | |
concerns. Australia has been impacted by the strong dollar. That | :10:28. | :10:35. | |
is it for now. Thank you for watching. | :10:36. | :10:39. |