01/08/2014 Asia Business Report

third child are in hospital. Now we will go to single port and

get all the latest business news. `` Singapore.

After a Wall Street suffered its steepest falls in months, Asia's

market stumble. New Jersey shows manufacturing surgeon to its highest

level in more than two yours. `` data.

Thank you for joining us for this edition of Asia Business Report.

Asian stock markets are retreating in mid`morning trade. US equities

had their worst trading days since April. It follows Argentina's

default for a second time. Stocks are down. There is concern that the

Federal reserve could raise the cost of borrowing sooner than expected.

From the New York Stock Exchange. Investor nerves were clearly

frazzled on Thursday. There are a host of reasons. There is the

situation in Ukraine. We heard from companies like BP talking about the

impact it is starting to have on their business. There is that

default in Argentina. Closer to home, there was a report on wage

inflation. This raised the prospect that perhaps America's central bank

would shift its focus from battling the weak labour market to fighting

inflation. That could mean higher interest rates. As Alan Greenspan

noted, the stock market has been rising for some time. Perhaps it was

due for a significant correction. Investors will be wondering if that

has now begun. Some good news for investors. New

data from China reveals manufacturing surging to the highest

level in more than two years. Factory activity quickened to a 27

month high in July. The economy is regaining momentum after a burst of

government stimulus that initiatives. Consumers are also

spending. China's so`called stimulus continues

apace. Banks lending, the government is spending and so far it seems to

be working. An uptick in second`quarter GDP, for example, and

manufacturing data suggesting that they have put the gloom of the year

behind them. The only thing that matters, at least for the

government, is if people feel richer in their pockets. So how does the

man in the street, or in this case the market, feel about things? It is

much easier to make money nowadays, the shopper says. I do not know the

precise figures, but year`on`year, people are spending more, this

splitter agrees. `` butcher. Those comments will be music to the ears

of china's policy planners. They are trying to move away from growth

based on infrastructure spending. The problem is, the current stimulus

fits that category exactly. It is big banking, big, sent the

government. ``, as and big government. The balancing challenge

for China remains as tough as ever. We can now speak to an expert of

consumer goods for the region and asked him what is driving activity

in the region. There is more a personal credit card debt. How big a

worry is that? It is not a big worry. The banks are watching it

carefully. They have been watching personal debt. What other growth

drivers are there for the Chinese economy, apart from the

economy. Manufacturing is very strong. A lot of products are coming

in, being manufactured and exported. For domestic spending, the key point

would be the increasing focus on digital spending. Online traffic.

Consumer goods companies are trying to balance online, physical storage

with online. We are seeing the likes of online websites doing very well.

Exactly. It is interesting. The business model has expanded in terms

of services being provided. But also it will help partners. It is not

just a market for selling. It is also helping offenders. `` vendors.

The World Trade Organisation has failed to reach a breakthrough on a

global costings deal being drawn up in Bali last December. It would have

streamlined global customs procedures and should have been

finalised by Thursday. It was blocked over a number of lifts,

including India's demand for concessions on the stock having a

food. The British drinks maker of spirits concluding Johnnie Walker

and Smirnoff said sales tapered off. Wickes Potts concluded China

and South East Asia. Volume fell by more than 20%.

Tesla is to team up with Panasonic to build a large`scale battery

manufacturing facility in the United States. It will create 6500 jobs and

will produce components for electric cars. It is expected to help reduce

the battery costs by 30%. Indonesia's economy has been one of

the fastest`growing in Asia. The country is expected to have one of

the region's is the increases in billionaires over the next decade.

That has led to industries serving the new megarich.

Spinning to the beat of a luxurious tune. This is a charity gala,

organised by some of Indonesia's richest wives and girlfriends. It is

a ladies club where the megarich socialise, spend money and show

off. To enter one of these clubs, there is a monthly fee. It can be

extravagant. Starting from $1 million every month. `` 1 million.

Going to 1 million every month. $10,000? Yes. The business depends

on the indulgences of the set. I can meet new people and they can

introduce me to their friends. This is her studio, where she buys, sells

and the Reds luxury handbags to wealthy Indonesian women. They can

spend $20,000 `50,000 US dollars. `` $50,000. For many in Indonesia, life

runs on a different track. I am in one of hundreds of slums peppered

across Jakarta. This woman lives here with her seven children and her

husband. They read this tiny shack out for about $45 per month and

every day it is a struggle to make ends meet. This shack is home to her

entire family. Just one luxury handbag could pay a rental two

years. She has seen the fancy cars and houses just a few hundred metres

away. They might as well be on a different planet. Reality is filled

with feeding seven mouths. TRANSLATION: Sometimes my husband

cannot find work. We have to eat every day. When he does not bring

him any money, it is very tough. Her story is not unique. 66% of

Indonesia's population lives on $2 per day. The ranks of Indonesia's

billionaires may be growing, but so is the gap between the rich and the

poor. You can find out more on our online

special report. Before we go, a quick look at the markets. Wall

Street had their worst trading day since April. There has been concern

that the Federal reserve could raise interest rates sooner rather than

later. Thank you for investing your time with us. Goodbye for now.

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