22/05/2014 Asia Business Report


22/05/2014

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never been broadcast before. Now on BBC News, all the latest business

:00:00.:00:13.

news live from Singapore. China signs a $400 billion gas deal with

:00:14.:00:19.

Russia, after a decade of talks. Singapore is ranked the world's best

:00:20.:00:22.

place to do business for its sixth year. Thank you for joining us. I'm

:00:23.:00:38.

Rico Hizon. The Russian President Vladimir Putin was in Shanghai to

:00:39.:00:41.

witness a landmark deal that will see Russia supply China with natural

:00:42.:00:44.

gas for 30 years. It marks a political triumph for Vladimir

:00:45.:00:46.

Putin, who faces economic isolation in the West because of his actions

:00:47.:00:51.

in Ukraine. But what exactly brought about this last`minute deal? Earlier

:00:52.:00:54.

I posed that question to an energy expert from the University of

:00:55.:01:03.

Singapore. For one thing, Russia has gas to sell, and it needs those

:01:04.:01:06.

dollars. China needs gas. Both sides have won overall. But until we know

:01:07.:01:13.

the price and how much China has to pay upfront, we cannot say who was

:01:14.:01:16.

the winner. As of yesterday, when you were on the programme, there was

:01:17.:01:20.

no certainty as to whether a deal would be sealed, and it was only

:01:21.:01:22.

signed and delivered early evening Asia time. So could the deal have

:01:23.:01:33.

been, let's sign now, discuss the price later? It looks that way,

:01:34.:01:36.

pricing is not something you can finalise in two or three hours. So

:01:37.:01:46.

either they just did agree a price at the last minute, regardless of

:01:47.:01:49.

President stood in and said, we have President stood in and said, we have

:01:50.:01:53.

a deal, sort out the details later. And certainly at the moment, no`one

:01:54.:01:59.

knows. What does this agreement mean for the Chinese? Well it gives the

:02:00.:02:06.

Chinese in five years' time an additional supply of gas which, at

:02:07.:02:09.

that time, will account for maybe 20% of their total consumption. So

:02:10.:02:17.

this is good for them, and helps their energy consumption and will

:02:18.:02:19.

tackle the serious pollution problem. For the Russians? For the

:02:20.:02:24.

Russians, it gives them the money to develop the far`eastern gas fields,

:02:25.:02:26.

which will support local developments, and means they have

:02:27.:02:29.

new customers for their gas which, if Europe starts to turn away from

:02:30.:02:36.

Russia, works. So with these closer relations between the Chinese and

:02:37.:02:39.

the Russians, what does it mean for the geopolitical system going on in

:02:40.:02:43.

Asia now? I would not read too much into that. There has been an oil

:02:44.:02:47.

pipeline for nearly ten years running between both countries. So I

:02:48.:02:56.

think it is still a fairly pragmatic relationship, although they do share

:02:57.:03:05.

certain strategic concerns. Phillip Andrew speed from the National

:03:06.:03:12.

University of Singapore. Bright foods has bought a stake in a rival.

:03:13.:03:20.

It has signed a preliminary agreement to buy 56% of the company.

:03:21.:03:25.

The price was not disclosed but Israel media reports value the

:03:26.:03:35.

company highly. China's factory sector posting its best performance

:03:36.:03:39.

in five month according to a private survey. The PMI rose to 49.7 in May

:03:40.:03:47.

from 48 .1 in April. However, that figure indicates that manufacturing

:03:48.:03:53.

shrank overall as china's economic slowdown dampened demand. The US

:03:54.:03:58.

central bank has started discussing ways to exit the massive stimulus

:03:59.:04:05.

policy, to save it from a record low. According to the April meeting

:04:06.:04:08.

minutes, they are exploring tools they could use to return the policy

:04:09.:04:11.

to normal by next year. The Fed has spent more than $4 billion on

:04:12.:04:14.

purchases over the last five years to support the economy. `` $4

:04:15.:04:24.

trillion. EBay is asking its users to change its passwords after the

:04:25.:04:27.

company was hit by a cyber`attack. The e`commerce giant said that the

:04:28.:04:29.

database containing personal information was compromised. It says

:04:30.:04:32.

no credit card information or financial information was stolen.

:04:33.:04:55.

The Chinese eat, so `` The Chinese e`commerce site JD.com has raised

:04:56.:04:58.

billions of dollars. The demand exceeded expectations, with shares

:04:59.:05:01.

being priced at $19 per share at its debut on the technology`heavy index.

:05:02.:05:04.

Shares have risen after the firm posted a 29% jump in profits.

:05:05.:05:08.

Singapore is the best place in the world to do business, that's

:05:09.:05:11.

according to the latest survey by the Economic Intelligence Unit. It

:05:12.:05:13.

sees the city retain its number one spot as an investor`friendly

:05:14.:05:16.

location. It looks at a number of indicators, including political

:05:17.:05:18.

stability and corporate tax rates. The cost of living and practical

:05:19.:05:21.

costs make Singapore attractive as a place for foreign companies to

:05:22.:05:24.

invest. However, it is not only about costs. When you think of the

:05:25.:05:34.

business environment, it is also about how easy it is to do business,

:05:35.:05:38.

and what the quality of the business environment is. When we measure

:05:39.:05:42.

this, we look at ten different aspects of the business environment,

:05:43.:05:44.

ranging from political stability, through commercial laws and

:05:45.:05:47.

competition policy, all the way to the labour market and infrastructure

:05:48.:05:51.

and taxation. With Singapore, the cost is a constraint, but in other

:05:52.:06:02.

areas, it performs. It has excellent infrastructure, and also labour

:06:03.:06:09.

policies, which in the last decade has seen the number of foreign

:06:10.:06:14.

workers here as well. There are challenges as well. The same

:06:15.:06:18.

organisation that ranks it as the top pace to do business also says it

:06:19.:06:23.

is the world's most expensive city. Singapore's high cost of living,

:06:24.:06:26.

strong currency, the soaring price of utilities as well is the cost of

:06:27.:06:35.

running a car, meant it topped 131 other cities in the survey. If that

:06:36.:06:40.

doesn't put you off wanting to live here, there are other challenges.

:06:41.:06:43.

Such as limits to public expression and personal freedom. Some

:06:44.:06:46.

restrictions on the local gas, which critics say help foster a more

:06:47.:06:50.

business friendly environment. One of its many dealers, its open

:06:51.:06:54.

immigration policy, has actually up set many local residents, who feel

:06:55.:06:59.

as if they are discriminated against in their own country. But Singapore

:07:00.:07:02.

will keep topping these global lists, much to the chagrin of other

:07:03.:07:05.

Asian financial centres such as Hong Kong. Here in Hong Kong, the city

:07:06.:07:11.

prides itself on a long history of being opened to entrepreneurs and

:07:12.:07:16.

investors. On a number of different indicators, from the quality of its

:07:17.:07:21.

workforce to government policy, to infrastructure, Hong Kong and

:07:22.:07:25.

Singapore fair and equally well. But where Hong Kong lags is in so`called

:07:26.:07:29.

future market opportunities. You see, this city does not set its own

:07:30.:07:37.

monetary policy. Instead, Hong Kong follows a American monetary policy.

:07:38.:07:40.

It has done so for 13 years. Investors and officials have liked

:07:41.:07:45.

the stability which it brings. But US interest rates are expected to

:07:46.:07:51.

rise sharply in the next few years, that means the cost of money in Hong

:07:52.:07:57.

Kong is likely to jump as well. That may result in a fall in property

:07:58.:08:00.

prices as well as in consumer spending. That makes this a less

:08:01.:08:09.

welcoming environment for investors. Just over six months after

:08:10.:08:11.

experiencing one of the world's worst`ever typhoons, the Philippines

:08:12.:08:14.

continues to expand at a fast pace. Growth rates in 2012 and 2013 are

:08:15.:08:17.

the quickest since the 1950s, how can that be after it was struck by

:08:18.:08:21.

such a devastating natural disasters so recently? Our correspondent

:08:22.:08:27.

explains. Six months ago, the Philippines was struck by one of the

:08:28.:08:30.

worst national disasters to hit land. Typhoon Haiyan caused a

:08:31.:08:40.

massive loss of life, and had a huge impact on the economy. It is

:08:41.:08:43.

estimated to cut the economic growth of the entire country by a huge one

:08:44.:08:48.

percentage point. But, the Philippines is still forecast to

:08:49.:08:51.

grow at 6.5%, which would be the fastest in Asia except for China.

:08:52.:08:58.

How can that be? This outcome is due to reconstruction, rebuilding homes,

:08:59.:09:01.

and could add 3.5% GDP, that is only from what the government spends. The

:09:02.:09:11.

damage from the typhoon will be felt, especially towards the front

:09:12.:09:20.

of the year. But, with the offset from the government driving

:09:21.:09:23.

reconstruction, the economy as a whole is expected to recover by the

:09:24.:09:26.

end of the year. Headline GDP figures will reassure businesses

:09:27.:09:35.

that the economy will be all right. But for those who have lost their

:09:36.:09:38.

homes and their livelihoods, rebuilding will not be easy, when

:09:39.:09:41.

they do not have private insurance. For them, it does not matter what

:09:42.:09:45.

the big headline figures are, but rather how quickly the growth can

:09:46.:09:48.

translate into means with which they can reconstruct their lives. For

:09:49.:10:03.

more stories from the Philippines, make sure you log on to the BBC

:10:04.:10:07.

website, where we have a page dedicated to its people, and

:10:08.:10:17.

culture. Before we go, the is a quick look at the Asian markets.

:10:18.:10:21.

They are all in positive territory after US equities bounced back

:10:22.:10:26.

overnight after the previous day's fell off. That is after the meeting

:10:27.:10:32.

which suggested that the US will keep reducing its stimulus plan.

:10:33.:10:35.

Thank you for investing your time with us. I'm Mike Embley. The

:10:36.:10:40.

headlines:

:10:41.:10:41.

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