08/08/2016 Asia Business Report


08/08/2016

Similar Content

Browse content similar to 08/08/2016. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Asia? And how many hops in a top drop. The favoured ingredient in

:00:00.:00:12.

craft beer. Hello and welcome to Asia Business Report. The decision

:00:13.:00:18.

in Thailand to approve a new military backed constitution paves

:00:19.:00:21.

the way for a general election next year. The ruling junta says it is a

:00:22.:00:31.

step towards a fully functioning democracy, while critics say it

:00:32.:00:35.

further in trenches their rule and say it could result in more not less

:00:36.:00:39.

political turmoil. One analyst gave us his take on what it could mean

:00:40.:00:44.

for South East Asia's second largest economy. In the near term it will be

:00:45.:00:50.

positive. The current military government's investment plans will

:00:51.:00:58.

continue. Investors on the domestic front as well, expectations of

:00:59.:01:01.

democratic elections will come through sooner rather than later.

:01:02.:01:07.

That would be deemed good, within a framework of at least intended

:01:08.:01:10.

stability. The initial phase will be good for the economy because we will

:01:11.:01:15.

see public spending continued to support... Given global demand is

:01:16.:01:20.

the weak link right now. You mentioned public spending. That has

:01:21.:01:23.

been pushing the economies to some degree. And you have to risen, which

:01:24.:01:29.

is what Thailand is known for, the land of smiles, but beyond that what

:01:30.:01:34.

else is helping Thailand in terms of economic growth? -- tourism. Net

:01:35.:01:38.

export has been falling behind and the global demand environment hasn't

:01:39.:01:43.

helped, so this is arguably outside Thailand's control. What is within

:01:44.:01:50.

is the public spending and tourism part. As we proceed forward, as it

:01:51.:01:56.

comes to the monarchy and succession issues, the legitimacy of the

:01:57.:02:01.

military being able to elect officials, that becomes more

:02:02.:02:04.

contentious and that is the medium to long-term risk. We have seen

:02:05.:02:08.

private investment is low in Thailand, and foreign investment as

:02:09.:02:12.

well, so what will it take for these people to come and put their money

:02:13.:02:18.

into this economy? Two things, one is of course difficult for Thailand

:02:19.:02:22.

to determine, that is the global capital expenditure cycle, which has

:02:23.:02:27.

continued to be weak. So the manufacturing sector has also been

:02:28.:02:32.

as a corollary quite weak. Investment is lagging. For more

:02:33.:02:36.

investors to come in, Thailand has great potential, so it is about the

:02:37.:02:39.

stability of government rather than devolving governments. The stability

:02:40.:02:45.

policies, especially investment policies, and no street protests,

:02:46.:02:49.

because they don't bode well, even though we claim they are on separate

:02:50.:02:53.

tracks, but it is a converging track. In other news, China has

:02:54.:03:00.

launched its first mobile telecommunications satellite, the

:03:01.:03:08.

Tian Tong One, serving China, the Middle East and Africa, operated on

:03:09.:03:13.

the ground by a state-owned China Telecom, and it is capable of

:03:14.:03:17.

securely sending and receiving data that cannot be copied, stolen or

:03:18.:03:22.

spied on. Now, the Hong Kong-based digital currency exchange which lost

:03:23.:03:28.

$65 million to hackers last week, is going to spread losses across users.

:03:29.:03:34.

Even though those directly impacted will be losing 40%. Bitcoin has

:03:35.:03:43.

rebounded following that slightly. India's goods and service tax is

:03:44.:03:47.

expected to give a major boost to the economy. And once the that

:03:48.:03:54.

stands to benefit is Indian conglomerate, the Godridge Group.

:03:55.:03:59.

Our correspondent caught up with the chairman and started with asking how

:04:00.:04:03.

the GST will help the Indian economy. I think it will help India

:04:04.:04:12.

tremendously, it will add one and a half to two percentage points to

:04:13.:04:19.

Indian GDP growth rate -- Godrej. The tax rate will be considerably

:04:20.:04:22.

lower on most goods than it is today. On services, it will be

:04:23.:04:35.

higher. It will lead to almost elimination of evasion of indirect

:04:36.:04:40.

taxes, because under the new law evading indirect taxes will be very

:04:41.:04:44.

difficult. If evasion of indirect taxes goes away, it is likely to cut

:04:45.:04:50.

down evasion of direct taxes too because a lot of evasion of direct

:04:51.:04:58.

taxes is to hide indirect taxes. Government collections can go up a

:04:59.:05:03.

lot as the rates will be lower. Prices will be lower, consumption

:05:04.:05:08.

will go up, production will go up. Tell us how it is going to help your

:05:09.:05:15.

company. Tax rates will be lower, we can cut prices, leading to more

:05:16.:05:19.

consumption of the product, leading to more production and investment.

:05:20.:05:23.

Logistics costs will come down a lot. Currently we don't get a set

:05:24.:05:31.

off from all the taxes that go through our input logistics system

:05:32.:05:34.

when we export. Now we will get everything back. All in all it will

:05:35.:05:39.

be extremely beneficial. Historically, if you look at the

:05:40.:05:44.

countries that have implemented GST in the past, the economy has slowed

:05:45.:05:47.

down before they have seen the positive impact of GST. Will we see

:05:48.:05:52.

a similar trend in India? Not at all, I don't expect that at all. You

:05:53.:06:00.

are referring to countries which went from either low or no indirect

:06:01.:06:04.

taxes to a GST or VAT. Here we have a very high indirect tax regime,

:06:05.:06:11.

very complicated, to a simplified, better regime. So I don't think

:06:12.:06:17.

there will be any such case. In fact, I expect from the very first

:06:18.:06:23.

month of implementation, from April 2017 GDP growth will accelerate. One

:06:24.:06:31.

of the biggest trends in alcohol consumption is the explosion in the

:06:32.:06:36.

popularity of craft via globally, and nowhere more so than in

:06:37.:06:41.

Australia. Over the last five years of the industry's revenues in

:06:42.:06:45.

Australia have grown at an estimated annual rate of nearly 10%. And the

:06:46.:06:51.

number of craft or is is up almost 50% in just the last two years

:06:52.:06:56.

alone. -- craft breweries. That has led to the increase in the demand

:06:57.:07:01.

for hops. Let's have a look. Plants grow six metres in the air. We go

:07:02.:07:08.

through and we string overhead trellis work at every single plant.

:07:09.:07:12.

Microbrewery has been a huge growth for us and for the industry and we

:07:13.:07:16.

can say, yes, we know this is how this plant was developed, this is

:07:17.:07:21.

where it was growing, this is the garden it was groaning, so we can

:07:22.:07:25.

follow its whole life basically from its inception all the way to the

:07:26.:07:28.

beer. And that's what the industry wants. -- grown in. The industry is

:07:29.:07:35.

taking notice of what's happening in Australia. We now supply hops

:07:36.:07:41.

domestically, internationally, just selling it to the USA, the UK,

:07:42.:07:46.

Germany, up into Asia, throughout the islands, brewers becoming more

:07:47.:07:52.

passionate about hot varieties that they are then introducing to their

:07:53.:07:55.

beers -- hop. We wouldn't have craft beer without hops, and,

:07:56.:08:01.

specifically, the amazing flavour and aroma of hops that are coming

:08:02.:08:06.

out now. Hops are a precious commodity, so we use them sparingly

:08:07.:08:12.

but compared to the old days of when hops were really just use for making

:08:13.:08:16.

it better, we use huge amounts of hops. The pioneers of craft brewing

:08:17.:08:20.

came from the US on the West Coast and they started using hops more and

:08:21.:08:24.

more to deliver these amazing aromas and flavours. And that is what

:08:25.:08:28.

shocked people into realising that beer didn't need to be bland and not

:08:29.:08:36.

hoppy. So we use hops from all over the world but we just love the

:08:37.:08:40.

flavours that Australian hops in particular are really delivering. We

:08:41.:08:49.

get our beer delivered on Thursday, it comes straight from the brewery

:08:50.:08:52.

and there are a lot of local breweries around here. We cram it

:08:53.:08:55.

into this seller in the basement. There is hardly any room to move

:08:56.:09:01.

because it is, like, stacked. Every square centimetre space is taken.

:09:02.:09:05.

There has been an excursion in craft beer at it continues to gather and

:09:06.:09:09.

momentum. These days I would say it would be very hard to find someone

:09:10.:09:13.

who hasn't been exposed to craft beer somewhere along the line. There

:09:14.:09:17.

is no question that the demand is growing. It is probably, hopefully,

:09:18.:09:21.

continuing to outpace supply. There is a lot of new supply coming on the

:09:22.:09:24.

market but the demand is still growing very quickly. You are seeing

:09:25.:09:31.

demand for hops as you are seeing demand for Asian stocks this morning

:09:32.:09:34.

and let's see how they are trading because the Nikkei is up 1.5%, 1.6,

:09:35.:09:40.

it is rising, as it takes its cue from the US close on Friday with the

:09:41.:09:46.

NASDAQ at a record high and the S 500 at a record high. And you have

:09:47.:09:50.

seen the all ordinaries in Australia also gaining, and that is because we

:09:51.:09:58.

saw some very positive jobs date on Friday, lifting these markets -- All

:09:59.:10:04.

Ordinaries. And that is it for this edition of Asia Business Report.

:10:05.:10:05.

Thanks for watching. The government's being accused

:10:06.:10:09.

of trying to bribe people into accepting fracking for shale

:10:10.:10:11.

gas by proposing payments

:10:12.:10:15.

Download Subtitles

SRT

ASS