15/03/2017 Asia Business Report


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15/03/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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I will be back with more of the day's news, including the breaking

:00:00.:00:00.

news from America. MSNBC have got hold of Donald Trump's tax returns

:00:00.:00:00.

from the year 2005. Now on BBC News, all the latest

:00:00.:00:08.

business news live from Singapore. China's message for the world. The

:00:09.:00:18.

National People's Congress comes to a close. What have we learnt? And

:00:19.:00:23.

one Southeast Asian city claims the ranks to number one when it comes to

:00:24.:00:35.

having the best quality of living. Hello, and welcome to Asia Business

:00:36.:00:41.

Report, the National People's Congress in Beijing has come to a

:00:42.:00:44.

close. Delegates from across China pledged to implement the use of

:00:45.:00:48.

technology to strengthen the military. Well, the 10-day session

:00:49.:00:55.

had kicked off with Chinese Premier Li Keqiang announcing slower growth

:00:56.:00:58.

this year compared with last year's 6.7% expansion. I spoke with our

:00:59.:01:03.

correspondent in Beijing and asked for some of the highlights from this

:01:04.:01:08.

year's National People's Congress. I think the headline news is the

:01:09.:01:11.

government is targeting lower growth this year than last year. In actual

:01:12.:01:14.

fact, sentiment in Beijing is relatively up heat on the economy at

:01:15.:01:18.

the moment so 6.5% growth for this year as a whole -- upbeat. We are

:01:19.:01:25.

seeing a bit of a recovery in the industrial manufacturing sector

:01:26.:01:28.

here. So the mood and sentiment is relatively upbeat despite the

:01:29.:01:32.

lowering of the headline growth target. You say it is upbeat,

:01:33.:01:36.

nonetheless that lower growth target to 6.5%, it is still the lowest in

:01:37.:01:42.

more than 25 years, so how might that impact a lot of China's

:01:43.:01:47.

neighbours which rely on it as an engine of growth? I think china's

:01:48.:01:51.

neighbours will welcome slower growth, China is going to make

:01:52.:01:55.

progress on structural reform in tackling some of the imbalances in

:01:56.:01:59.

its economy. This is the key to sustainable long-term growth in

:02:00.:02:01.

China and that should be something which its neighbours, with China a

:02:02.:02:06.

significant export market, should welcome. Slower growth doesn't mean

:02:07.:02:10.

necessarily a bad thing for the global economy if it means China

:02:11.:02:14.

will be a more stable footing in the years to come, that will be a

:02:15.:02:18.

positive. We heard from Premier Li Keqiang at the National People's

:02:19.:02:21.

Congress essentially reiterating a lot of pledges we have heard before,

:02:22.:02:25.

the need to tackle large data and enterprises, zombie companies

:02:26.:02:27.

producing too much coal and steel, the need to tackle pollution. As I

:02:28.:02:32.

mentioned, we have heard this before and they have proven hard to fulfil.

:02:33.:02:37.

How effective is the National People's Congress really? I think

:02:38.:02:40.

they are moving a little bit too late on both the issue of tackling

:02:41.:02:43.

zombie companies and tackling air-pollution, but last year they

:02:44.:02:46.

move more aggressively than they have before on both those areas. In

:02:47.:02:50.

terms of implementation, there is still a lot to be desired. We think

:02:51.:02:54.

capacity cuts this year will be difficult, because they haven't

:02:55.:02:57.

really reformed the state-owned sector, which is potentially more

:02:58.:03:03.

difficult than the cuts in the private sector last year. And we are

:03:04.:03:06.

also hearing a lot more protectionist language from the new

:03:07.:03:10.

Trump administration, especially in the US. Were there any clues from

:03:11.:03:13.

the National People's Congress on how China might deal with trade

:03:14.:03:18.

tensions with the US? Well, I think in one sense China sees this as an

:03:19.:03:22.

opportunity for itself to assume some of the global leadership roles

:03:23.:03:26.

in globalisation, although its own record in terms of opening its own

:03:27.:03:33.

economy leaves much to be desired. I think that Trump and Xi Jinping are

:03:34.:03:37.

going to meet next month in the US, which is a positive sign and suggest

:03:38.:03:41.

those trade tensions might not spill over to the extent of having

:03:42.:03:44.

significant implications for both the US, Chinese and global economies

:03:45.:03:49.

in the future. So if they are meeting, it probably suggest there

:03:50.:03:52.

is room for compromise on some of the issues which divided them. That

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is Tom Rafferty speaking to me earlier. It is the news that

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investors have been waiting for. The US Federal Reserve is expected to

:04:02.:04:04.

announce an interest rate increase at the world's largest economy,

:04:05.:04:09.

gaining momentum. It comes as many await more concrete details about

:04:10.:04:13.

Donald Trump's economic policies. So what does a rate hike mean for the

:04:14.:04:18.

average American worker? Our correspondent reports from New York.

:04:19.:04:25.

An increasingly common sight in America today. Machines making

:04:26.:04:29.

everything from factory robots to aircraft landing gear. After a

:04:30.:04:34.

painfully slow recovery, the sights and sounds of economic activity.

:04:35.:04:38.

Nearly everyone who wants a job in the US has one. It has been getting

:04:39.:04:45.

better for us since 2008, 2009. That was the worst I have seen in my

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working life. I have seen more jobs coming back to the United States.

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This shop in Brooklyn they make metal parts, mainly for the aviation

:04:55.:04:59.

industry. Like many factories across the US, there is lots going on in

:05:00.:05:04.

room to grow. Were fortunate we have a steady flow of business. Now and

:05:05.:05:09.

for the foreseeable future, we have a steady flow of business. Activity

:05:10.:05:14.

that hasn't gone unnoticed by this woman. Fed chair Janet Yellen is

:05:15.:05:19.

among those making the case that the world's largest economy is strong

:05:20.:05:23.

enough to withstand higher interest rates, making the prospect of a rate

:05:24.:05:28.

hike in March a near certainty. The economy is clearly ready for another

:05:29.:05:32.

rate hike, inflation is moving towards the Fed's inflation target

:05:33.:05:37.

of 2%. The job market is in very good shape, and financial market

:05:38.:05:41.

conditions have eased. Back at the tool shop, this man sees the

:05:42.:05:46.

prospect of a higher rate as a vote of confidence in the economy.

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Probably is a good time to raise interest rates, although I don't

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want to pay more interest. And a few miles away on what will your Mac

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Wall Street, investors are prepared, even looking ahead, wondering about

:05:58.:06:03.

the pace of future hikes -- on Wall Street. If the Federal Reserve

:06:04.:06:07.

raises interest rates this will be only the third time it has done so

:06:08.:06:11.

since the global financial crisis. Almost a decade later, it would send

:06:12.:06:15.

a signal that the US economy is returning to some kind of normality.

:06:16.:06:23.

In other business news, Toshiba shares are down by more than 7% in

:06:24.:06:27.

Tokyo this morning. The Tokyo stock exchange has placed the shares under

:06:28.:06:32.

supervision for a possible delisting. On Tuesday, Toshiba said

:06:33.:06:36.

it may sell its majority stake in the US nuclear unit Westinghouse.

:06:37.:06:41.

The Japanese firm bought Westinghouse in 2006 but it has been

:06:42.:06:45.

suffering huge cost overruns. Toshiba has been granted permission

:06:46.:06:50.

to delay reporting its earnings second time, until 11 April, and is

:06:51.:06:56.

expected to announce a write-down of about $6 billion for the struggling

:06:57.:07:01.

nuclear business. Now, the list is in the cities with the best quality

:07:02.:07:06.

of living, and the worst. Vienna in Austria ranked number one in the

:07:07.:07:13.

world, according to consultancy farm Mercer, Auckland, Sydney, Wellington

:07:14.:07:17.

and Melbourne remain in the top 20 however in Asia, Singapore ranked

:07:18.:07:22.

the highest, moving up one place, in fact, since last year, for its

:07:23.:07:26.

business opportunities as well as it in the structure. It is followed by

:07:27.:07:30.

several Japanese cities, including Tokyo, Yokohama and Kobe. Hong Kong

:07:31.:07:37.

moved down one spot but it is still the highest of all its neighbouring

:07:38.:07:40.

cities, including Taipei, Shanghai and Beijing. I asked a correspondent

:07:41.:07:49.

from Mercer consulting firm what factors they consider in their

:07:50.:07:52.

ranking system. There are clear focus is on air pollution. There is

:07:53.:07:56.

focus on traffic congestion. There is focus on freedom of speech, there

:07:57.:08:02.

is focus on economic environment, including access to currency

:08:03.:08:06.

exchange rates. And all of those factors relatively have kind of push

:08:07.:08:12.

down the Chinese cities to a lower ranking. You have got the likes of

:08:13.:08:17.

Auckland at number three. It has out ranked Singapore for the

:08:18.:08:20.

Asia-Pacific region, but if you think about multinationals who you

:08:21.:08:23.

are aiming this study at, don't you think that Auckland perhaps might be

:08:24.:08:27.

seen to be too far away to set up a big business, or a regional company?

:08:28.:08:32.

I think you need to differentiate between quality of living bursars,

:08:33.:08:38.

you know, what might make sense for a multinational from a regional hub

:08:39.:08:45.

perspective -- versus. Access to raw materials, access to clients,

:08:46.:08:49.

availability of different kinds of talent, all might have a bearing on

:08:50.:08:55.

where you want to set up. Let's take a look at the cities at the bottom.

:08:56.:09:02.

For this part of the world, Baghdad and Dhaka it near the bottom, what

:09:03.:09:08.

is it about these cities? Safety and security has a clear bearing, and

:09:09.:09:12.

clearly Baghdad, Dhaka, and some of the other cities which are ranked

:09:13.:09:16.

much lower, have clearly been impacted by the safety and security

:09:17.:09:21.

issue, of a safe environment. Plus, there are additional factors. As I

:09:22.:09:25.

said, there are 39 different factors. Air pollution, traffic

:09:26.:09:31.

conditions, economic stability, access to international flights, all

:09:32.:09:34.

of those have kind of played a part in some of those cities being scored

:09:35.:09:39.

lower. All right, but in terms of infrastructure, this is the first

:09:40.:09:43.

year you have put out a list which assesses the best infrastructure,

:09:44.:09:47.

Singapore tops are but we know that there are many other Asian cities

:09:48.:09:50.

with equally good infrastructure. What is it about Singapore

:09:51.:09:55.

specifically? I am very proud to say that Singapore is ranked number one

:09:56.:09:58.

worldwide in city infrastructure rankings we came out with. In the

:09:59.:10:04.

way they are measured are around uninterrupted electricity supply,

:10:05.:10:06.

water availability, integrated public transportation system, and,

:10:07.:10:14.

you know, traffic conditions, access to international airports all

:10:15.:10:17.

flights. Singapore clearly scored a much higher ranking in lots of

:10:18.:10:22.

those. Let's take a quick look at the market before we go, because

:10:23.:10:26.

there is a lot of caution setting and in the markets. That is why they

:10:27.:10:30.

are all lower. A lot of investors sidelined ahead of those meetings,

:10:31.:10:34.

the Fed reserve, the Bank of England and the bank of Japan. That is it

:10:35.:10:37.

for the show, thank you for

:10:38.:10:38.