30/10/2015 World Business Report


30/10/2015

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The Bank of Japan holds off on expanding its massive stimulus

:00:18.:00:22.

as the world's 3rd largest economy skirts another recession.

:00:23.:00:27.

India throws big money at Africa as Prime Minister Narenda Modi says

:00:28.:00:32.

his country and Africa are the "two bright spots of hope in the

:00:33.:00:35.

The Bank of Japan held off on expanding

:00:36.:00:55.

The bet is probably that prices will keep rising once the impact

:00:56.:01:02.

But with its 2% inflation target still distant, a nasty slowdown

:01:03.:01:12.

could yet force the Bank of Japan to take more extreme measures.

:01:13.:01:15.

Let's get more from the man who knows.

:01:16.:01:19.

Rupert Wingfield-Hayes joins me now from Tokyo.

:01:20.:01:25.

Good to see you. We can start with this. There are not many tools left

:01:26.:01:36.

in the box for the central bank to use to stimulate the economy. It is

:01:37.:01:41.

skirting and other recession. What are they waiting for? I am not sure.

:01:42.:01:48.

We will have two C in about half-an-hour. There are already

:01:49.:01:54.

massively pumping money into the economy, to the tune of about $60

:01:55.:02:03.

billion a month. There is a feeling that increasing its father will not

:02:04.:02:08.

do much more good. The marginal utility of further stimulus will not

:02:09.:02:16.

produce much more facts. That is why they have decided to stick at the

:02:17.:02:21.

current level. What we might hear is that he is trying to push back that

:02:22.:02:31.

inflation target to 2017. And a debate about the central bankers at

:02:32.:02:38.

the moment. And the role in apparently trying to fix everything.

:02:39.:02:44.

Will China's slowdown continued to hamper the Japanese economy? I think

:02:45.:02:52.

he will point to China and point to falling oil prices as being the

:02:53.:02:57.

reasons why inflation is not picking up despite the massive amount of

:02:58.:03:02.

money being pumped into the economy. There are more and more dissenting

:03:03.:03:06.

voices about economics and the economic policy being pursued by the

:03:07.:03:14.

government. A lot are saying it is not working. The reason being, the

:03:15.:03:24.

only one that has been implemented is making more money. The difficult

:03:25.:03:30.

stuff, the economic reform needed to get Japan's economy moving and

:03:31.:03:35.

changing just has not been done at all. Great stuff as always. Thank

:03:36.:03:40.

you for that update. Beijing has finally abolished the

:03:41.:03:48.

one child policy. Meanwhile shares

:03:49.:03:53.

of baby products have risen sharply after China announced the end

:03:54.:03:55.

of its one child policy. So much so that products

:03:56.:03:57.

like baby formula sales are expected Rico Hizon is

:03:58.:04:00.

in Singapore to explain more. It is good to see you. Perhaps no

:04:01.:04:10.

surprises. Beijing says, you are allowed to have two children. Baby

:04:11.:04:15.

formula sales expected to double in the next five years. Absolutely.

:04:16.:04:23.

These baby product manufacturers are very excited about this news from

:04:24.:04:30.

China. That is why shares have risen sharply. There is a huge potential.

:04:31.:04:37.

China makes up almost half of the global imports of milk powder with a

:04:38.:04:51.

market of $90 billion. But it will take several months before the new

:04:52.:04:55.

initiative that affects demand. We will not see a significant increase

:04:56.:05:01.

in the numbers until the second quarter of next year. Global prices

:05:02.:05:09.

are already rebounding. The price of milk has slumped in part because of

:05:10.:05:25.

a slowdown in Chinese imports. China will start producing. Thank you very

:05:26.:05:27.

much. This week many African leaders

:05:28.:05:28.

travelled to India for the When it comes to investment

:05:29.:05:31.

and doing business in Africa, India is behind its rival China, but with

:05:32.:05:34.

the world's second-largest economy showing signs of slowing, India

:05:35.:05:44.

thinks it can up its game in Africa. From New Delhi,

:05:45.:05:47.

the BBC's Shilpa Kannon reports. A big, noisy and colourful welcome.

:05:48.:06:01.

This is the biggest diplomatic event in the has ever hosted. There is

:06:02.:06:07.

reason for the fuss. Annual trade between India and Africa has gone up

:06:08.:06:12.

from $3 billion in 2000 to about $70 billion today. But India's Africa

:06:13.:06:25.

ties my -- are far behind China. So they hope to engage Africa even

:06:26.:06:30.

more. It is wooing Africa for the same reasons as its Asian rival. As

:06:31.:06:36.

India's economy takes off, it is financial resources will steadily

:06:37.:06:42.

mount. Many see China's slowing growth as an opportunity for India

:06:43.:06:47.

to narrow the gap. Already India is buying oil from Nigeria, Algeria,

:06:48.:06:53.

Mozambique and Angola. But India's and these will only grow. What India

:06:54.:06:59.

offers to Africa in return our services like education and

:07:00.:07:03.

healthcare. Thousands of Africans go to India every year for medical

:07:04.:07:07.

procedures that cannot be done locally with Indian hospitals quick

:07:08.:07:13.

to tap into the market. New Delhi has already extended billions of

:07:14.:07:15.

dollars of credit to various countries across the continent to

:07:16.:07:20.

help the cause. India is keen to further it ambitions to replace

:07:21.:07:23.

China in the continent. Inflation data for the whole euro

:07:24.:07:27.

zone is due this Friday, with analysts polled by Reuters

:07:28.:07:29.

expecting that it'll show consumer Should we be worried or will more QE

:07:30.:07:32.

from the European Central Bank help Sarah Hewin, the Europe Chief

:07:33.:07:42.

Economist at Standard Chartered. Perhaps no surprises here. This

:07:43.:08:02.

seems to be a bit of a theme. The stuff we all love to buy and need to

:08:03.:08:06.

buy has been doing this for a long time. That is right. But the fact is

:08:07.:08:13.

what is happening to oil prices. We are paying less for our energy than

:08:14.:08:20.

we were. That is a huge impact. If we strip that out, if we strip out

:08:21.:08:24.

the volatile things like energy and food, there is some inflation in the

:08:25.:08:28.

economy, but it is still not very high. Can I ask you this? The

:08:29.:08:36.

European Central bank has been pumping a lot of money into the

:08:37.:08:39.

economy. It has been doing 60 billion euros per month. That money

:08:40.:08:46.

is supposed to get into the broader economy. So people end up with it in

:08:47.:08:53.

their pockets. That should start to lift the prices, inflation. That is

:08:54.:08:59.

not happening. What is going on? Some of it is going into raising

:09:00.:09:04.

asset prices. So we can see the costs of houses, stock markets,

:09:05.:09:10.

picking up since quantitative easing is starting with. House prices are

:09:11.:09:25.

going up. There is a broader impact. If you kickstart the global

:09:26.:09:32.

economy, that will raise incomes and earnings. That will lead to higher

:09:33.:09:43.

prices. That is the aim. Do you think that if we continue seeing

:09:44.:09:49.

this inflation that Mario Gotze well do more? -- Draghi. We think he will

:09:50.:10:00.

do more. More quantitative easing from December. Great stuff as

:10:01.:10:08.

always. A lot going on, follow me on Twitter and you can get me. So the

:10:09.:10:22.

markets up. Hong Kong is slightly down. All eyes will continue to be

:10:23.:10:32.

on America's central bank. And we had rather disappointing growth

:10:33.:10:37.

numbers from the US. 1.5% growth for the last three months. The world's

:10:38.:10:44.

largest economy is having a bit of a hiccup. I will be back to take a

:10:45.:10:50.

look at the newspapers from around the world shortly. Goodbye.

:10:51.:11:01.

The UK's readiness to help thousands of refugees from Syria is being

:11:02.:11:04.

The Home Affairs select committee says the Government's commitment

:11:05.:11:08.

means that around four-thousand Syrians would

:11:09.:11:10.

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