15/01/2014 Asia Business Report


15/01/2014

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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character, Ken Barlow. Now on BBC News, all the latest

:00:00.3:59:59

business news live from Singapore. Grounded. Japan Airlines suffers a

:00:00.:00:21.

new battery problem on one of its Boeing 787 aircraft. The Detroit

:00:22.:00:27.

auto show is under way. But one group is not attending.

:00:28.:00:33.

Welcome. As you may have heard from our previous bulletin, Japan

:00:34.:00:45.

Airlines has grounded one of its early 787 Dreamliner aircraft, after

:00:46.:00:48.

it detected white smoke outside the plane, caused by a battery issue.

:00:49.:00:51.

The incident comes nearly one year after Japan Airlines and Nippon

:00:52.:00:54.

Airways grounded their fleets after two batteries overheated on two

:00:55.:01:06.

planes. Global regulators issued a worldwide grounding of the 787

:01:07.:01:10.

fleets, which went on for three months. Our correspondent brought us

:01:11.:01:22.

up to date. Yesterday afternoon in Japan, when

:01:23.:01:24.

an inspection of a Japan Airlines 787 was taking place before a flight

:01:25.:01:27.

to Thailand. During the inspection, the engineers noticed smoke coming

:01:28.:01:30.

from somewhere. They went to investigate. Alarms went off in the

:01:31.:01:36.

cockpit, showing the source was the battery. They found that one of the

:01:37.:01:39.

eight lithium ion batteries appear to have overheated and melted. It

:01:40.:01:49.

does look like it was very similar to the problems that caused the

:01:50.:01:59.

grounding last year. But, at the same time, the company Boeing is

:02:00.:02:02.

saying that the updated design, the containment system, works and that

:02:03.:02:06.

the problem didn't spread. Nevertheless, new safety concerns.

:02:07.:02:18.

Is this going to highlight issues? What it really points to is that

:02:19.:02:22.

Boeing has still not got to the root of this battery problem. We are a

:02:23.:02:25.

year on from the first incident and the investigation still hasn't

:02:26.:02:30.

reported back. Although there has been a successful testing of the

:02:31.:02:33.

design problem, these batteries still have a fundamental design

:02:34.:02:44.

problem. That will be a worry for customers and it has affected the

:02:45.:02:46.

share price. It could affect decisions about purchasing other

:02:47.:02:56.

aircraft instead. This might, for example, help Airbus.

:02:57.:03:02.

And of course, a word about the people booking flights on the

:03:03.:03:05.

carriers. What happens to this particular flight?

:03:06.:03:13.

The passengers weren't on the plane. They were immediately transferred to

:03:14.:03:21.

another 787 and went to Bangkok. So, it didn't affect the operations

:03:22.:03:24.

greatly. It's an issue of maintenance and cost. And, again, it

:03:25.:03:31.

will raise concerns as to whether this plane is completely safe.

:03:32.:03:37.

To the car industry. Detroit's famous motor show kicked off this

:03:38.:03:44.

week. The focus this year has been on the big three US carmakers. But

:03:45.:03:50.

the country with the biggest car maker and market is noticeably

:03:51.:03:54.

absent. Walking around the Detroit Auto

:03:55.:03:57.

Show, you'll see brands from all over the world. But one country is

:03:58.:04:00.

not here. For the first time since 2006, there are no Chinese

:04:01.:04:08.

carmakers. A sign of how hard it is to break the American market. That

:04:09.:04:11.

doesn't mean that Asian carmakers are underrepresented. Toyota has

:04:12.:04:15.

been generating a lot of buyers. -- buzz. This is a concept car that

:04:16.:04:20.

hasn't moved to production, but enthusiasts have been excited by

:04:21.:04:29.

what they are seeing. American carmakers have been reviving brands

:04:30.:04:31.

like the Mustang and the Corvette. This is Toyota's offering. I'm

:04:32.:04:34.

joined by the man responsible for what we see. This is the Toyota

:04:35.:04:49.

FT-1. Our intent is to create a spiritual car that sets the pace. We

:04:50.:04:56.

wanted to create an exciting, heart-tugging design that draws

:04:57.:04:59.

people in and allows people to feel what the car looks like, rather than

:05:00.:05:03.

think about it. What do you have to include in a car like this to get

:05:04.:05:06.

people excited? People have to see beautiful surfaces, beautiful

:05:07.:05:10.

proportions and excitement. Judging by the reaction so far, there has

:05:11.:05:14.

been a lot of excitement, for a company that hasn't traditionally

:05:15.:05:24.

been associated with that. But it's a push to try and win over the

:05:25.:05:31.

American car buyer. India will release its latest

:05:32.:05:33.

inflation figures in a few hours. Forecasters say the nation could see

:05:34.:05:39.

the data edged down from a four-month high. Consumers have seen

:05:40.:05:45.

persistently high inflation. The key question is whether it is whether

:05:46.:05:50.

it's a long-term change. More from Mumbai.

:05:51.:05:58.

I've just bought some tomatoes and the price I paid is about one

:05:59.:06:02.

quarter of what it cost in November. The price of most vegetables here

:06:03.:06:07.

are soaring. Many have become cheaper. The reason? The winter

:06:08.:06:12.

harvest has been good, the reason why the supply of vegetables has

:06:13.:06:17.

gone up. This has reflected retail inflation figures, which touched a

:06:18.:06:21.

three-month low over December. This is great news for Indian consumers,

:06:22.:06:24.

who have been battling for high food prices. Some people, did you leave

:06:25.:06:29.

those from low income families, say they almost stopped buying

:06:30.:06:36.

vegetables. -- particular goes. Inflation number is also expected to

:06:37.:06:40.

have gone down generally. They say it will probably come down to about

:06:41.:06:47.

7%, after 17.5% in November. But even at 7%, it's still quite high.

:06:48.:06:52.

The central bank has been focusing on inflation. It has increased

:06:53.:06:57.

interest rates twice as its -- since September. But during the last

:06:58.:07:03.

review, rates have been unchanged because they believed inflation

:07:04.:07:05.

would go on a downward trend and that's what we are seeing at the

:07:06.:07:09.

moment. But the central bank is unlikely to announce any cuts off

:07:10.:07:13.

interest rates, unless we see it go substantially lower. Stay with us.

:07:14.:07:17.

We will bring you those figures as soon as we get them from Mumbai.

:07:18.:07:29.

The World Bank has raised its growth forecast for the first time in three

:07:30.:07:32.

years. In its latest estimate, the institution sees global gross

:07:33.:07:35.

domestic product expanding by 3.2% from 2.4% last year. The bank said

:07:36.:07:38.

the world economy has reached a turning point, as policy uncertainty

:07:39.:07:41.

no longer weighs heavily on most of the major countries. It's expecting

:07:42.:07:52.

strong growth in America compared to that of last year.

:07:53.:07:54.

What makes a global property a hotspot? Our chief business

:07:55.:07:57.

correspondent is looking at what is driving property prices. Today, she

:07:58.:08:00.

reports from London on my some properties that are becoming more

:08:01.:08:04.

attractive. Potential homebuyers know all too

:08:05.:08:07.

well that, in cities like London, house prices are skyrocketing,

:08:08.:08:13.

despite the tepid economic recovery. And it's not just London. You see

:08:14.:08:20.

this across global property hotspots. Here, prices have more

:08:21.:08:30.

than doubled since 2005. In Asia, Singapore had seen house prices

:08:31.:08:33.

increased by more than 230%. In Hong Kong, they now have the most

:08:34.:08:39.

expensive homes in the world. In New York, despite the housing crash,

:08:40.:08:42.

prices are up nearly 50%. Why are house prices rising so rapidly? Out

:08:43.:08:55.

of the reach of most people, high end flats like this one are a sign

:08:56.:08:59.

of how much demand there is for housing in places like London.

:09:00.:09:02.

Record low interest rates and even government schemes to help

:09:03.:09:04.

homebuyers are some of the reasons why house prices of rising. -- are

:09:05.:09:09.

rising. And London is an attractive place to own property because

:09:10.:09:12.

there's no annual tax based on the value of the property. If you own

:09:13.:09:17.

one of these $50 million homes, you would pay an annual tax of $60,000.

:09:18.:09:27.

-- $16,000. That includes the local property tax. But such a property

:09:28.:09:34.

tax based on value of the property does exist in other global cities.

:09:35.:09:39.

Peter, who is buying in London? Brits or foreigners? Everyone is

:09:40.:09:43.

buying in London. But the British are probably 40% of our business.

:09:44.:09:56.

Next on the line is Russia and a few other states. We have got 15% from

:09:57.:09:59.

the Middle East and Europe and then Asia. Different cities are becoming

:10:00.:10:01.

concerned about foreigners coming into purchase property. In Asia,

:10:02.:10:05.

there are new taxes foreigners buying and selling homes. In London,

:10:06.:10:08.

a similar measure comes into effect from 2015. For all those worried

:10:09.:10:14.

about and prices, we will be following those markets closely.

:10:15.:10:24.

You can see more on that report this weekend. This is Asia Business

:10:25.:10:27.

Report. Thanks for watching. The main stories: Anti-government

:10:28.:10:46.

protestors are still paralysing parts of Bangkok. The Prime Minister

:10:47.:10:51.

insists she won't do is -- resigned. Israel has

:10:52.:10:52.

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